[R4R]BEP3: HTLC and Atomic Peg #30

abelliumnt · 2019-07-09T10:46:02Z

This BEP is about introducing Hash Timer Locked Contract functions and further mechanism to handle inter-blockchain token peg.

HTLC has been used for Atomic Swap and cross payment channel for a few years on Bitcoin and its variant blockchains, and also Ethereum. This BEP defines native transactions to support HTLC on Binance Chain, and also proposes the standard infrastructure and procedure to use HTLC for inter-chain atomic swap to easily create and use pegged token, which is called Atomic Peg.

Related BEP: #3

abelliumnt · 2019-07-09T11:05:31Z

@caffeinum Could you help to review this BEP?

BEP3.md

drunken005 · 2019-07-12T05:19:34Z

When will this feature come online

chainwhisper · 2019-07-12T08:54:55Z

BEP3.md

+#### Preparation Stage
+
+1. Owner should issue proper number of tokens on Binance Chain as the Pegged 
+2. Owner should create one address on Binance Chain (as OB in the below diagram), and transfer in enough number of tokens for swap


where is the diagram?

chainwhisper · 2019-07-12T10:56:34Z

BEP3.md

+#### Client Swap Tokens from Ethereum to Binance Chain
+
+1. Client calls APS contract, with the hash of a secret, X tokens and a time span T parameters, to express his/her interest to swap X tokens. If the parameters are good (e.g. T>MinLockTime, enough tokens to swap), the call transaction is recorded on the blockchain.
+2. Deputy process monitors the events of the APS contract on Ethereum. If it detects the client’s call and verify good, it will sign and broadcast the HTLT transaction on Binance Chain. This will lock X (or more as bonus) number of pegged tokens on Binance Chain. Please note the time span used in this HTLT transaction should be smaller enough than T in Client’s APS call.


we need to check if the contract has enough deposit

There is no need to check. The contract will ensure there has been enough deposit on the contract address.

wjmelements · 2019-07-16T20:56:22Z

Will it be possible to lock the operator's balance so they can only send using HTLC?

wjmelements · 2019-07-17T05:51:47Z

BEP3.md

+
+### Claim Hash Timer Locked 
+
+Claim Hash Timer Locked (CHTL) is to claim the locked asset by showing the Random Number value that matches the hash. Each HTLT locked asset is guaranteed to be release once.


Should this be CHLT? This is the only place it is called CHTL.

CHTL is right.

caffeinum · 2019-07-17T09:54:30Z

BEP3.md

+
+## Atomic Peg Swap
+
+The primary purpose of HTLC in Binance Chain is to support Atomic Peg Swap (APS). APS is proposed here as the standard way for asset/token issuers to peg or migrate part of the asset/token onto Binance Chain, so that users of the tokens can enjoy the fast transactions and pleasant trading experience.


I believe Atomic Swap and Peg should be a totally separate concerns. Atomic Swap is an option, and cannot be enforced without intermediary and complicated mechanisms like DAI (which isn't safe, too).

It's easy to implement an Atomic Swap using HTLC first, so I think we should focus on that and move Peg discussion to separate BEP.

Related:

https://blog.bitmex.com/atomic-swaps-and-distributed-exchanges-the-inadvertent-call-option/

Dominator008 · 2019-07-19T04:25:25Z

BEP3.md

+#### Preparation Stage
+
+1. Owner should issue proper number of tokens on Binance Chain as the Pegged 
+2. Owner should create one address on Binance Chain (as OB in the below diagram), and transfer in enough number of tokens for swap


Is "OB" an ordinary address controlled by the owner's private key? If so, isn't the owner free to move tokens from this address?

Yes. It is an ordinary address. But once HTLT transaction is sent, a certain number of coins will be transferred to a temporary address. There is no risk for swap.

Understood the swap process works. My question is geared more towards ensuring the total supply of tokens is still fixed. It's unclear to me how the current proposal guarantees at any given time, circulatingSupply(BEP-2) + circulatingSupply(ERC-20) == originalCirculatingSupply(ERC-20)?

Taking ERC20 token for instance, the total supply of token A is 10000. If 5000 the BEP2 token is minted, then 5000 ERC20 token should be burned. Currently, there are 5000 BEP2 token and 5000 ERC20 token. Then the swap service provider use 1000 BEP2 token and 1000 ERC20 token for atomic swap service. Then total supply is still 10000.

But there's no prevention against the token owner minting more BEP-2, besides community monitoring?

You are right. The community monitor is the main insurance for the unexpected minting on Binance Chain.

@HaoyangLiu I believe it cannot be called a peg then.

I will state again that I think it's needed to separate Atomic swap BEP and Peg BEP.

abelliumnt · 2019-07-22T03:54:19Z

Changes on Binance Chain implementation:

Add swap in amount and swap out amount.
Add refund msg type on Binance Chain
Once a CHTL transaction or a refund transaction are sent, the corresponding hash lock record will be deleted.
Change Coins to Coin
secetHashLock = hash(secretKey+timestamp), The gap between timestamp and block time should be less than one day.

Changes on swap contract interface:

Add swap amount in and swap amount out.
_timelock should be block height instead of timestamp.
Add swap query interface to get all opened swap

I have add the above changes. Please review it again.
@darren-liu @notatestuser @rickyyangz @yutianwu @guagualvcha @ackratos

caffeinum

I think pegging mechanism needs much improvement, while Atomic swap is OK.

It's great we're having progress here, but I am for the separation.

abelliumnt · 2019-07-22T10:36:40Z

@caffeinum
Could you clarify how to improve pegging mechanism?

Dominator008 · 2019-07-22T11:26:59Z

Without loss of generality, let's design a pegging scheme between ERC-20 and BEP-2. IMO a proper mechanism should be something as follows:

Create pegged BEP-20 tokens (convert a part of the supply from ERC-20 to BEP-2):

On Ethereum, the token owner sends a certain amount of ERC-20 tokens to a bridge contract where the tokens are locked until unpegged.
On Binance Chain, the token owner broadcasts a peg transaction with the requested pegging amount.
Binance Chain validators check on Ethereum that the locked amount is enough for the pegging and approves the peg transaction. Note that they will need to wait for a certain number of Ethereum blocks to establish finality.
Token owner is now free to transfer the newly minted pegged tokens on Binance Chain.

Destroy pegged BEP-20 tokens (convert a part of they supply from BEP-2 to ERC-20):

On Binance Chain, token owner broadcasts a regular burn transaction on the Binance chain, which burns certain number of pegged tokens.
On Binance Chain, token owner broadcasts a requestProofOfBurn transaction, for which the validators sign-off the burnt amount and a nonce with secp256k1.
On Ethereum, token owner sends the proof of burn to the bridge contract. The contract checks the signatures of the validators and unlocks the signed-off amount of tokens. The nonce is recorded as used to prevent replay attacks.

Note that this requires an extension to the semantics of mintable on Binance chain -- pegged assets should only be mintable with the special peg transaction.

This mechanism guarantees that the total supply of the token remains constant.

Dominator008 · 2019-07-26T08:28:34Z

https://github.com/swishlabsco/cosmos-ethereum-bridge is an example of a unidirectional pegging implementation.

karzak · 2019-07-26T21:41:47Z

https://github.com/swishlabsco/cosmos-ethereum-bridge is an example of a unidirectional pegging implementation.

FYI The latest version of the ETH bridge code is https://github.com/musnit/peggy/tree/unidirectional-complete

darren-liu · 2019-07-30T08:46:21Z

Without loss of generality, let's design a pegging scheme between ERC-20 and BEP-2. IMO a proper mechanism should be something as follows:

Create pegged BEP-20 tokens (convert a part of the supply from ERC-20 to BEP-2):

On Ethereum, the token owner sends a certain amount of ERC-20 tokens to a bridge contract where the tokens are locked until unpegged.

On Binance Chain, the token owner broadcasts a peg transaction with the requested pegging amount.

Binance Chain validators check on Ethereum that the locked amount is enough for the pegging and approves the peg transaction. Note that they will need to wait for a certain number of Ethereum blocks to establish finality.

Token owner is now free to transfer the newly minted pegged tokens on Binance Chain.

Destroy pegged BEP-20 tokens (convert a part of they supply from BEP-2 to ERC-20):

On Binance Chain, token owner broadcasts a regular burn transaction on the Binance chain, which burns certain number of pegged tokens.

On Binance Chain, token owner broadcasts a requestProofOfBurn transaction, for which the validators sign-off the burnt amount and a nonce with secp256k1.

On Ethereum, token owner sends the proof of burn to the bridge contract. The contract checks the signatures of the validators and unlocks the signed-off amount of tokens. The nonce is recorded as used to prevent replay attacks.

Note that this requires an extension to the semantics of mintable on Binance chain -- pegged assets should only be mintable with the special peg transaction.

This mechanism guarantees that the total supply of the token remains constant.

It is nice to have it trustless, but it is heavy-weight-lifting and I don't think it is realistically achievable to implement this feature for multiple chains.

I agree it is not a perfect solution for Peg here. The progress is to make at least a better way than current situation of how peg is performed on Binance Chain.

Dominator008 · 2019-07-30T08:56:33Z

Without loss of generality, let's design a pegging scheme between ERC-20 and BEP-2. IMO a proper mechanism should be something as follows:
Create pegged BEP-20 tokens (convert a part of the supply from ERC-20 to BEP-2):

On Ethereum, the token owner sends a certain amount of ERC-20 tokens to a bridge contract where the tokens are locked until unpegged.

On Binance Chain, the token owner broadcasts a peg transaction with the requested pegging amount.

Binance Chain validators check on Ethereum that the locked amount is enough for the pegging and approves the peg transaction. Note that they will need to wait for a certain number of Ethereum blocks to establish finality.

Token owner is now free to transfer the newly minted pegged tokens on Binance Chain.

Destroy pegged BEP-20 tokens (convert a part of they supply from BEP-2 to ERC-20):

On Binance Chain, token owner broadcasts a regular burn transaction on the Binance chain, which burns certain number of pegged tokens.

On Binance Chain, token owner broadcasts a requestProofOfBurn transaction, for which the validators sign-off the burnt amount and a nonce with secp256k1.

On Ethereum, token owner sends the proof of burn to the bridge contract. The contract checks the signatures of the validators and unlocks the signed-off amount of tokens. The nonce is recorded as used to prevent replay attacks.

Note that this requires an extension to the semantics of mintable on Binance chain -- pegged assets should only be mintable with the special peg transaction.
This mechanism guarantees that the total supply of the token remains constant.

It is nice to have it trustless, but it is heavy-weight-lifting and I don't think it is realistically achievable to implement this feature for multiple chains.

I agree it is not a perfect solution for Peg here. The progress is to make at least a better way than current situation of how peg is performed on Binance Chain.

Understood. We can revisit once projects like ThorChain have made more progress with generic peg zone implementations.

abelliumnt force-pushed the atomic-swap branch 3 times, most recently from 8e8305b to 3f09938 Compare July 9, 2019 10:53

Add BEP for atomic swap

468882d

abelliumnt force-pushed the atomic-swap branch from 3f09938 to 468882d Compare July 9, 2019 10:56

abelliumnt changed the title ~~[WIP]BEP3: Atomic swap~~ [R4R]BEP3: Atomic swap Jul 9, 2019

abelliumnt requested review from ackratos, darren-liu, unclezoro, notatestuser, rickyyangz and yutianwu July 9, 2019 10:59

abelliumnt changed the title ~~[R4R]BEP3: Atomic swap~~ [R4R]BEP3: Atomic swap HTLC Jul 9, 2019

abelliumnt changed the title ~~[R4R]BEP3: Atomic swap HTLC~~ [R4R]BEP3: HTLC and Atomic Peg Jul 9, 2019

yutianwu reviewed Jul 9, 2019

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chainwhisper mentioned this pull request Jul 12, 2019

Is there a solution for implementing hash lock bnb-chain/node-binary#75

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abelliumnt force-pushed the atomic-swap branch 2 times, most recently from 22389ff to feca1f0 Compare July 19, 2019 09:36

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Refactor interface design

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This was referenced Jul 29, 2019

R4R: Ethereum atomicswap contract bnb-chain/bep3-smartcontracts#2

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R4R: Atomic swap bnb-chain/node#634

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[R4R]BEP3: HTLC and Atomic Peg #30

[R4R]BEP3: HTLC and Atomic Peg #30

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Dominator008 commented Jul 30, 2019


		### Claim Hash Timer Locked

		Claim Hash Timer Locked (CHTL) is to claim the locked asset by showing the Random Number value that matches the hash. Each HTLT locked asset is guaranteed to be release once.


		## Atomic Peg Swap

		The primary purpose of HTLC in Binance Chain is to support Atomic Peg Swap (APS). APS is proposed here as the standard way for asset/token issuers to peg or migrate part of the asset/token onto Binance Chain, so that users of the tokens can enjoy the fast transactions and pleasant trading experience.

[R4R]BEP3: HTLC and Atomic Peg #30

[R4R]BEP3: HTLC and Atomic Peg #30

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