⛓️Bitcoin on-chain -> Solana

Requirements

• amount of BTC to receive must be known upfront

Parties

• payee - recipient of the solana/spl token, using intermediary to do the swap

• LP node - handling the swap, sends solana or spl token and receives bitcoin on-chain payment

• payer - the one paying bitcoin on-chain

• watchtower - claiming the tokens to claimer's account, on claimer's behalf and earning a small fee for their service

Process

1. Payee queries the LP node off-chain, with an amount he wishes the receive and locktime T he wishes to use, LP node returns his swap fee needed for a swap along with a specific message Mi (initialize) signed by LP node allowing payee to create a PTLC on Solana with funds pulled from LP node's vault. LP node is also charging a non-refundable fee based on locktime T to disincetivize spamming.

2. Payee reviews the returned fee and sends a transaction creating PTLC on Solana using message Mi (initialize) signed by LP node to pull funds from his vault:

   • paying the funds to payee if he can prove that a pre-agreed amount was sent to LP node's address in a bitcoin transaction that has >=6 confirmations

   • refunding the LP node, but only after locktime T

   NOTE: Here the replay protection needs to be handled by the LP node who needs to make sure to generate a new address for every swap (if he doesn't, he is the one losing money), as we cannot possibly influence fields such as nSequence and locktime in bitcoin transaction sent by payer because his wallet implementation is outside our influence.

Successful payment

1. Transaction confirms on bitcoin chain (has >=6 confirmations) payee/watchtower proves this via bitcoin relay and claims the funds from the PTLC to payee's account

Failed payment

1. No payment arrived in LP node's wallet address until the locktime T, therefore LP node can refund his funds back from the PTLC, keeping the non-refundable fee

Diagram

Bitcoin on-chain -> Solana swap process (Intermediary = LP Node, Smart chain = Solana)