[SOB]: Swap HTLC via Taproot+Musig2

[rajarshimaitra]

Swap HTLC via Taproot+Musig2

Description

The current coinswap protocol operates by constructing Hash Time Locked Contracts (HTLCs) between Takers and Makers. These HTLCs are expressed as WSH scripts. The contract Redeemscript is defined here.

Further optimization of HTLC contracts can be achieved by leveraging Taproot and Musig2. In this optimization, the individual hashlock and timelock scripts are represented as two leaves of Taproot at a depth of 1. The internal public key becomes the aggregated Musig2 key, combining the public keys of the Sender and Receiver.

This optimization allows for the consolidation of funding and contract transactions into a single Taproot transaction, reducing the cost of the swap and providing anonymity akin to all Taproot transactions.

Expected Outcomes

• Translation of the WSH contract into a Taproot contract.
• Aggregation of internal keys using Musig2.
• Successful swap implementation using Taproot and Musig2.

Resources

• Taproot basics tutorial.
• Musig2 Basics.
• Rust Musig2 library.
• Taproot module in rust-bitcoin.

Skills Required

• Proficiency with Git. Guide
• Experience with Rust. First seven chapters of the book
• Ability to set up a local core node in regtest mode and mine blocks.
• Familiarity with BDK v1.0 API.
• Understanding of Coinswap Wallet.

Mentor(s)

@rajarshimaitra

Difficulty

Hard

Competency Test

• Install Rust, compile, and run all the coinswap tests.
• Set up a local Bitcoin Core in regtest mode. Create a wallet, receive and send transactions via bitcoin-cli.