● Eltoo sample implementation and discussion: on the Lightning-Dev mailing list, Richard Myers posted a link to a sample implementation of an eltoo payment flow between nodes on a custom signet. Eltoo is a proposal to replace LN’s current LN-penalty enforcement layer with a new layer named LN-eltoo. LN-penalty prevents counterparty theft by giving nodes the ability to financially penalize a counterparty that attempts to publish an old channel state onchain. LN-eltoo accomplishes the same goal by giving the later states the ability to spend funds from earlier states within a certain period of time—eliminating the need for a penalty, simplifying many aspects of the protocol, and reducing the complexity of many proposed protocol enhancements. Myers’s sample implementation works by using the Bitcoin Core functional test framework to simulate payments in an eltoo payment channel.

This led to a discussion (1, 2) of whether using miniscript would help make LN “more future-proof and extensible than directly using Bitcoin Script.”

It also led to eltoo co-author Christian Decker writing a summary of why he thinks eltoo is especially valuable in providing a clean separation of protocol layers. For example, by making state changes in eltoo similar to state changes in Bitcoin, this would allow tools and contract protocols built for regular Bitcoin transactions (state changes) to be easily reused within payment channels.