Boltz Swap Mechanism
TL;DR
Boltz is a trustless swap provider that enables seamless exchanges between Bitcoin layers (e.g., Liquid to Lightning) using the atomicity of HTLCs.
🛠️ The Swap Flow (Send Payment)
When a user pays a Lightning invoice using the Liquid SDK:
- Lockup: The user’s wallet locks L-BTC into a special script (HTLC) on the Liquid chain. Only Boltz can claim this if they provide proof of paying the Lightning invoice.
- Payment: Boltz pays the Lightning invoice across the Lightning network and receives a “Preimage” (the proof of payment).
- Claim: Boltz uses the Preimage to claim the locked-up L-BTC on the sidechain.
🛡️ Security: The Refund Flow
What if Boltz takes the L-BTC but never pays the invoice?
- Time-locks: The lockup script includes a timeout (e.g., 4 hours).
- Refund: If Boltz doesn’t provide the preimage before the timeout, the user can use the SDK’s
refundmethod to take their L-BTC back. - Non-Custodial: At no point does Boltz have full control over the user’s funds without providing proof of service.
📊 Trust Assumptions
While the process is cryptographic, there are minor trade-offs:
- Availability: If Boltz is offline, you cannot start a new swap.
- Liquidity: You rely on Boltz having enough Lightning liquidity to facilitate your transaction.
- Cost: Boltz charges a fee (usually a small percentage) for the service.
💡 Why Boltz?
By using Boltz, Breeze removes the need for Outbound Liquidity Management, channel rebalancing, and maintaining a 24/7 online node presence. It makes Bitcoin payments “Just Work.”
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