BOLD #4: Swap Protocol

Overview

Once an order match is found in the taker’s order book, the swap protocol should be initiated. The current swap protocol assumes that the taker and maker are connected via a payment channel network (e.g. Lightning or Connext) with sufficient balance available for the swap. The following is the swap protocol's "happy" flow:

  1. Taker finds a match, e.g. buying 1 BTC for 10k DAI

  2. Taker creates the private r_preimage and the public r_hash for the atomic swap

  3. Taker sends the SwapRequest message to the maker, which includes r_hash

  4. Maker confirms full or partial quantity in the SwapAccepted message

  5. Taker starts the swap by dispatching the first-leg HTLCs on the DAI payment channel to the maker end, using r_hash

  6. Maker listens for an incoming HTLC on the DAI payment channel. Once it arrives he verifies price and quantity and then dispatches the second-leg HTLCs on the BTC payment channel to the taker end.

  7. Taker listens for an incoming HTLC on the BTC payment channel. Once it arrives he releases r_preimage. This allows both the taker and the maker payments to finalize.

  8. Both nodes locally mark the swap as completed once the respective HTLC is resolved and the payment is finalized.

Possible misbehaviors and their outcome:

Misbehavior

Outcome

Effect on payment channels

Maker doesn't respond to the SwapRequest message

Taker should timeout the swap and penalize the maker

None

Taker doesn't start the swap after receiving the SwapAccepted message

Maker should timeout the swap and penalize the taker

None

Maker receives the first-leg HTLC with insufficient amount or incorrect CLTV delta

Maker should send the taker a SwapError message

Taker funds are locked until HTLC expiration

Maker doesn't continue the swap after receiving the first-leg HTLC

Taker should timeout the swap and penalize the maker

Taker funds are locked until HTLC expiration

Taker receives the second-leg HTLC with insufficient amount or incorrect CLTV delta

Taker should sends the maker a SwapError message

Both Taker and Maker funds are locked until HTLC expiration

Taker doesn't release r_preimage after receiving the second-leg HTLC

Maker should timeout the swap and penalize the taker

Both Taker and Maker funds are locked until HTLC expiration

Swap Protocol

SwapRequest Message (0x0c)

`string id = 1`
The message's globally unique identifier, generated by the sender
`uint64 proposed_quantity = 2`
The proposed quantity
`string pair_id = 3`
The trading pair for the swap
`string order_id = 4`
The unique identifier of the maker order
`string r_hash = 5`
The taker preimage hash (in hex)
`uint32 taker_cltv_delta = 6`
The CLTV delta from the current height that should be used to set the timelock for the final hop when sending to the taker

The SwapRequest message is sent by the taker to the maker to start the swap negotiation.

SwapAccepted Message (0x0d)

`string id = 1`
The message's globally unique identifier, generated by the sender
`uint64 req_id = 2`
The id from the received SwapRequest message
`string r_hash = 3`
The taker’s preimage hash (in hex) from the received SwapRequest message
`string quantity = 4`
The accepted quantity (which may be less than the proposed quantity)
`uint32 maker_cltv_delta = 5`
The CLTV delta from the current height that should be used to set the timelock for the final hop when sending to the maker

The SwapAccepted message is sent by the maker to the taker to accept the swap request.

SwapFailed Message (0x0f)

`string id = 1`
The message's globally unique identifier, generated by the sender
`uint64 req_id = 2`
An optional id from the received SwapRequest message. Otherwise, this field is empty
`string r_hash = 3`
The taker’s preimage hash (in hex)
`string error_message = 4`
Additional information regarding the failure reason
`uint32 failure_reason = 5`
The failure reason

The SwapFailed message can be sent by either side of the swap protocol, at any time, to announce the swap termination.

failure_reason is an optional parameter for specifying the failure reason:

Failure Reason

Meaning

Description

0x00

Order Not Found

Could not find the order specified by a swap request

0x01

Order On Hold

The order specified by a swap request is on hold for a different ongoing swap

0x02

Invalid Swap Request

The swap request contained invalid data

0x03

Swap Client Not Setup

We are not connected to both swap clients, or we are missing public key identifiers for the peer's nodes

0x04

No Route Found

Could not find a route to complete the swap

0x05

Unexpected Client Error

A swap client call failed for an unexpected reason

0x06

Invalid Swap Message Received

Received a swap message with invalid data

0x07

Send Payment Failure

The call to send payment failed

0x08

Invalid Resolve Request

The swap resolver request was invalid

0x09

Payment Hash Reuse

The swap request attempts to reuse a payment hash

0x0a

Swap Timed Out

The swap timed out while we were waiting for it to complete execution

0x0b

Deal Timed Out

The deal timed out while we were waiting for the peer to respond to our swap request

0x0c

Unknown Error

The swap failed due to an unrecognized error