Architecture
How It Works at a High Level
The system leverages a Bitcoin Light Client for pegging in and a Threshold Signature Scheme (TSS) witness model for pegging out. Below is a high-level description of the design and its key components.
Key Components
Relayer
The relayer facilitates trustless communication between the Bitcoin network and the Side Chain by relaying Bitcoin blocks and bridge-related transactions. Its key responsibilities include:
Syncing Bitcoin block headers to the Side Chain to update the Bitcoin Light Client.
Relaying transactions to mint synthetic assets on the Side Chain.
Broadcasting peg-out transactions signed by TSS signers to the Bitcoin network and syncing these transactions back to the Side Chain to unlock the locked UTXOs.
Bitcoin Fee Provider
The fee provider supplies the latest Bitcoin on-chain fee rates required for withdrawal requests during the peg-out process.
Periodically submits the up-to-date Bitcoin fee rate to the Side Chain.
Operates under on-chain governance authorization.
TSS Signers
TSS signers are the core participants in the cross-chain bridge.
The TSS network consists of 21 selected Side Chain validators and employs a threshold signature scheme, ensuring reliable functionality as long as at least 15 validators remain active. The operators of the TSS network are carefully chosen from reputable entities within the validator space, with proven track records of managing billions of dollars in stakes across other networks..
These signers co-sign withdrawal transactions in a distributed, trust-minimized manner.
Design
Bitcoin Light Client
Initialization: The Bitcoin Light Client is initialized using a publicly known and trusted Bitcoin block header at genesis.
Update: Relayers consistently submit block headers, which are validated on the Side Chain.
Reorganization (Reorg): A reorg occurs when a new block header does not match the current best block header on the Side Chain. For security, the reorg depth is restricted within an acceptable scope (i.e., the safe confirmation number).
Asset Vaults Generation
Once the Side Chain is operational, an on-chain DKG proposal will be initiated to generate the necessary vaults for asset escrow.
The DKG procedure is conducted by the TSS network.
Asset Peg-in
Users transfer BTC to vault addresses generated by the TSS network.
Once the transaction reaches the required confirmation threshold, relayers submit it to the Side Chain.
The mint operation is executed upon successful verification of the transaction. A small protocol fee is collected at the same time.
After minting, the related Bitcoin UTXOs are stored for building peg-out transactions.
Asset Peg-out
Users initiate withdrawal requests on the Side Chain by burning the corresponding assets. A protocol fee is collected.
Withdrawal requests are grouped into signing requests every N blocks. The signing request is an unsigned PSBT built from on-chain UTXOs.
The TSS network fetches and signs the pending signing requests.
The signed Bitcoin transactions are broadcast to the Bitcoin network by relayers and submitted to the Side Chain to update the status of the corresponding signing requests to broadcast.
The peg-out transactions are relayed back to the Side Chain to unlock UTXOs for later use.
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