From 8bafd0c9fa448c3790ed2992f02b8e1245e6c56a Mon Sep 17 00:00:00 2001
From: Byron Hambly <bhambly@blockstream.com>
Date: Thu, 22 Feb 2024 17:51:52 +0200
Subject: [PATCH] feat: discounted fees for confidential transactions

This is a mempool policy only change to enable cheaper fees for
Confidential Transactions.

At a feerate of 1 sat/vb for a 2 input, 3 output transaction:
- explicit tx fee 326 sats
- confidential tx fee 408 sats
---
 src/Makefile.am                               |   1 +
 src/chainparams.cpp                           |  20 ++-
 src/chainparams.h                             |   4 +
 src/core_write.cpp                            |   7 +
 src/init.cpp                                  |   2 +
 src/net_processing.cpp                        |   4 +-
 src/policy/discount.h                         |  45 ++++++
 src/policy/policy.h                           |   1 +
 src/txmempool.cpp                             |  10 +-
 src/txmempool.h                               |   3 +
 src/validation.cpp                            |   7 +-
 src/wallet/spend.cpp                          |   5 +
 test/functional/feature_discount_ct.py        | 151 ++++++++++++++++++
 test/functional/test_runner.py                |   2 +
 test/util/data/blanktxv1.json                 |   1 +
 test/util/data/blanktxv2.json                 |   1 +
 test/util/data/tt-delin1-out.json             |   1 +
 test/util/data/tt-delout1-out.json            |   1 +
 test/util/data/tt-locktime317000-out.json     |   1 +
 test/util/data/txcreate1.json                 |   1 +
 test/util/data/txcreate2.json                 |   1 +
 test/util/data/txcreatedata1.json             |   1 +
 test/util/data/txcreatedata2.json             |   1 +
 test/util/data/txcreatedata_seq0.json         |   1 +
 test/util/data/txcreatedata_seq1.json         |   1 +
 test/util/data/txcreatemultisig1.json         |   1 +
 test/util/data/txcreatemultisig2.json         |   1 +
 test/util/data/txcreatemultisig3.json         |   1 +
 test/util/data/txcreatemultisig4.json         |   1 +
 .../util/data/txcreatemultisig4_elements.json |   1 +
 test/util/data/txcreatemultisig5.json         |   1 +
 test/util/data/txcreateoutpubkey1.json        |   1 +
 test/util/data/txcreateoutpubkey2.json        |   1 +
 test/util/data/txcreateoutpubkey3.json        |   1 +
 test/util/data/txcreatescript1.json           |   1 +
 test/util/data/txcreatescript2.json           |   1 +
 test/util/data/txcreatescript3.json           |   1 +
 test/util/data/txcreatescript4.json           |   1 +
 test/util/data/txcreatesignv1.json            |   1 +
 39 files changed, 281 insertions(+), 6 deletions(-)
 create mode 100644 src/policy/discount.h
 create mode 100755 test/functional/feature_discount_ct.py

diff --git a/src/Makefile.am b/src/Makefile.am
index 7a8e53cc342..c84454e1897 100644
--- a/src/Makefile.am
+++ b/src/Makefile.am
@@ -206,6 +206,7 @@ BITCOIN_CORE_H = \
   noui.h \
   outputtype.h \
   pegins.h \
+  policy/discount.h \
   policy/feerate.h \
   policy/fees.h \
   policy/packages.h \
diff --git a/src/chainparams.cpp b/src/chainparams.cpp
index 26c39489382..7879f646b2c 100644
--- a/src/chainparams.cpp
+++ b/src/chainparams.cpp
@@ -223,6 +223,8 @@ class CMainParams : public CChainParams {
         anyonecanspend_aremine = false;
         enforce_pak = false;
         multi_data_permitted = false;
+        accept_discount_ct = false;
+        create_discount_ct = false;
         consensus.has_parent_chain = false;
         g_signed_blocks = false;
         g_con_elementsmode = false;
@@ -361,6 +363,8 @@ class CTestNetParams : public CChainParams {
         anyonecanspend_aremine = false;
         enforce_pak = false;
         multi_data_permitted = false;
+        accept_discount_ct = false;
+        create_discount_ct = false;
         consensus.has_parent_chain = false;
         g_signed_blocks = false;
         g_con_elementsmode = false;
@@ -517,6 +521,8 @@ class SigNetParams : public CChainParams {
         anyonecanspend_aremine = false;
         enforce_pak = false;
         multi_data_permitted = false;
+        accept_discount_ct = false;
+        create_discount_ct = false;
         consensus.has_parent_chain = false;
         g_signed_blocks = false; // lol
         g_con_elementsmode = false;
@@ -610,6 +616,8 @@ class CRegTestParams : public CChainParams {
         anyonecanspend_aremine = false;
         enforce_pak = false;
         multi_data_permitted = false;
+        accept_discount_ct = false;
+        create_discount_ct = false;
         consensus.has_parent_chain = false;
         g_signed_blocks = false;
         g_con_elementsmode = false;
@@ -887,6 +895,8 @@ class CCustomParams : public CRegTestParams {
         const CScript default_script(CScript() << OP_TRUE);
         consensus.fedpegScript = StrHexToScriptWithDefault(args.GetArg("-fedpegscript", ""), default_script);
         consensus.start_p2wsh_script = args.GetIntArg("-con_start_p2wsh_script", consensus.start_p2wsh_script);
+        accept_discount_ct = args.GetBoolArg("-acceptdiscountct", false);
+        create_discount_ct = args.GetBoolArg("-creatediscountct", false);
 
         // Calculate pegged Bitcoin asset
         std::vector<unsigned char> commit = CommitToArguments(consensus, strNetworkID);
@@ -1023,7 +1033,7 @@ class CLiquidTestNetParams : public CCustomParams {
  */
 class CLiquidV1Params : public CChainParams {
 public:
-    CLiquidV1Params()
+    explicit CLiquidV1Params(const ArgsManager& args)
     {
 
         strNetworkID = "liquidv1";
@@ -1118,6 +1128,8 @@ class CLiquidV1Params : public CChainParams {
         enforce_pak = true;
 
         multi_data_permitted = true;
+        accept_discount_ct = args.GetBoolArg("-acceptdiscountct", true);
+        create_discount_ct = args.GetBoolArg("-creatediscountct", false);
 
         parentGenesisBlockHash = uint256S("000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f");
         const bool parent_genesis_is_null = parentGenesisBlockHash == uint256();
@@ -1261,7 +1273,7 @@ class CLiquidV1Params : public CChainParams {
  */
 class CLiquidV1TestParams : public CLiquidV1Params {
 public:
-    explicit CLiquidV1TestParams(const ArgsManager& args)
+    explicit CLiquidV1TestParams(const ArgsManager& args) : CLiquidV1Params(args)
     {
         // Our goal here is to override ONLY the things from liquidv1 that make no sense for a test chain / which are pointless and burdensome to require people to override manually.
 
@@ -1466,6 +1478,8 @@ class CLiquidV1TestParams : public CLiquidV1Params {
         enforce_pak = args.GetBoolArg("-enforce_pak", enforce_pak);
 
         multi_data_permitted = args.GetBoolArg("-multi_data_permitted", multi_data_permitted);
+        accept_discount_ct = args.GetBoolArg("-acceptdiscountct", accept_discount_ct);
+        create_discount_ct = args.GetBoolArg("-creatediscountct", create_discount_ct);
 
         if (args.IsArgSet("-parentgenesisblockhash")) {
             parentGenesisBlockHash = uint256S(args.GetArg("-parentgenesisblockhash", ""));
@@ -1557,7 +1571,7 @@ std::unique_ptr<const CChainParams> CreateChainParams(const ArgsManager& args, c
     } else if (chain == CBaseChainParams::REGTEST) {
         return std::unique_ptr<CChainParams>(new CRegTestParams(args));
     } else if (chain == CBaseChainParams::LIQUID1) {
-        return std::unique_ptr<CChainParams>(new CLiquidV1Params());
+        return std::unique_ptr<CChainParams>(new CLiquidV1Params(args));
     } else if (chain == CBaseChainParams::LIQUID1TEST) {
         return std::unique_ptr<CChainParams>(new CLiquidV1TestParams(args));
     } else if (chain == CBaseChainParams::LIQUIDTESTNET) {
diff --git a/src/chainparams.h b/src/chainparams.h
index c4a7e99eab7..a80807a8eba 100644
--- a/src/chainparams.h
+++ b/src/chainparams.h
@@ -135,6 +135,8 @@ class CChainParams
     const std::string& ParentBlech32HRP() const { return parent_blech32_hrp; }
     bool GetEnforcePak() const { return enforce_pak; }
     bool GetMultiDataPermitted() const { return multi_data_permitted; }
+    bool GetAcceptDiscountCT() const { return accept_discount_ct; }
+    bool GetCreateDiscountCT() const { return create_discount_ct; }
 
 protected:
     CChainParams() {}
@@ -167,6 +169,8 @@ class CChainParams
     std::string parent_blech32_hrp;
     bool enforce_pak;
     bool multi_data_permitted;
+    bool accept_discount_ct;
+    bool create_discount_ct;
 };
 
 /**
diff --git a/src/core_write.cpp b/src/core_write.cpp
index 1771ebe0de4..e41b2a760ba 100644
--- a/src/core_write.cpp
+++ b/src/core_write.cpp
@@ -9,6 +9,7 @@
 #include <consensus/validation.h>
 #include <issuance.h>
 #include <key_io.h>
+#include <policy/discount.h> // ELEMENTS
 #include <script/descriptor.h>
 #include <script/script.h>
 #include <script/sign.h>
@@ -236,6 +237,12 @@ void TxToUniv(const CTransaction& tx, const uint256& hashBlock, UniValue& entry,
     entry.pushKV("version", static_cast<int64_t>(static_cast<uint32_t>(tx.nVersion)));
     entry.pushKV("size", (int)::GetSerializeSize(tx, PROTOCOL_VERSION));
     entry.pushKV("vsize", (GetTransactionWeight(tx) + WITNESS_SCALE_FACTOR - 1) / WITNESS_SCALE_FACTOR);
+    // ELEMENTS: add discountvsize
+    if (Params().GetAcceptDiscountCT()) {
+        entry.pushKV("discountvsize", GetDiscountVirtualTransactionSize(tx));
+    } else {
+        entry.pushKV("discountvsize", (GetTransactionWeight(tx) + WITNESS_SCALE_FACTOR - 1) / WITNESS_SCALE_FACTOR);
+    }
     entry.pushKV("weight", GetTransactionWeight(tx));
     entry.pushKV("locktime", (int64_t)tx.nLockTime);
 
diff --git a/src/init.cpp b/src/init.cpp
index 2890ea4a673..fd8bb3df6f4 100644
--- a/src/init.cpp
+++ b/src/init.cpp
@@ -640,6 +640,8 @@ void SetupServerArgs(ArgsManager& argsman)
     argsman.AddArg("-initialreissuancetokens=<n>", "The amount of reissuance tokens created in the genesis block. (default: 0)", ArgsManager::ALLOW_ANY, OptionsCategory::CHAINPARAMS);
     argsman.AddArg("-ct_bits", strprintf("The default number of hiding bits in a rangeproof. Will be exceeded to cover amounts exceeding the maximum hiding value. (default: %d)", 52), ArgsManager::ALLOW_ANY, OptionsCategory::CHAINPARAMS);
     argsman.AddArg("-ct_exponent", strprintf("The hiding exponent. (default: %s)", 0), ArgsManager::ALLOW_ANY, OptionsCategory::CHAINPARAMS);
+    argsman.AddArg("-acceptdiscountct", "Accept discounted fees for Confidential Transactions (default: true for liquidv1, false for other chains)", ArgsManager::ALLOW_ANY, OptionsCategory::CHAINPARAMS);
+    argsman.AddArg("-creatediscountct", "Create Confidential Transactions with discounted fees (default: false)", ArgsManager::ALLOW_ANY, OptionsCategory::CHAINPARAMS);
 
 #if defined(USE_SYSCALL_SANDBOX)
     argsman.AddArg("-sandbox=<mode>", "Use the experimental syscall sandbox in the specified mode (-sandbox=log-and-abort or -sandbox=abort). Allow only expected syscalls to be used by bitcoind. Note that this is an experimental new feature that may cause bitcoind to exit or crash unexpectedly: use with caution. In the \"log-and-abort\" mode the invocation of an unexpected syscall results in a debug handler being invoked which will log the incident and terminate the program (without executing the unexpected syscall). In the \"abort\" mode the invocation of an unexpected syscall results in the entire process being killed immediately by the kernel without executing the unexpected syscall.", ArgsManager::ALLOW_ANY, OptionsCategory::OPTIONS);
diff --git a/src/net_processing.cpp b/src/net_processing.cpp
index b7dc6da0fbd..8f62280b6a6 100644
--- a/src/net_processing.cpp
+++ b/src/net_processing.cpp
@@ -4964,7 +4964,9 @@ bool PeerManagerImpl::SendMessages(CNode* pto)
                         auto txid = txinfo.tx->GetHash();
                         auto wtxid = txinfo.tx->GetWitnessHash();
                         // Peer told you to not send transactions at that feerate? Don't bother sending it.
-                        if (txinfo.fee < filterrate.GetFee(txinfo.vsize)) {
+                        // ELEMENTS: use the discounted vsize here so that discounted CTs are relayed.
+                        // discountvsize only differs from vsize if accept_discount_ct is true.
+                        if (txinfo.fee < filterrate.GetFee(txinfo.discountvsize)) {
                             continue;
                         }
                         if (pto->m_tx_relay->pfilter && !pto->m_tx_relay->pfilter->IsRelevantAndUpdate(*txinfo.tx)) continue;
diff --git a/src/policy/discount.h b/src/policy/discount.h
new file mode 100644
index 00000000000..961329dac16
--- /dev/null
+++ b/src/policy/discount.h
@@ -0,0 +1,45 @@
+// Copyright (c) 2009-2010 Satoshi Nakamoto
+// Copyright (c) 2009-2021 The Bitcoin Core developers
+// Distributed under the MIT software license, see the accompanying
+// file COPYING or http://www.opensource.org/licenses/mit-license.php.
+
+#ifndef BITCOIN_POLICY_DISCOUNT_H
+#define BITCOIN_POLICY_DISCOUNT_H
+
+#include <consensus/consensus.h>
+#include <cstdint>
+#include <primitives/transaction.h>
+#include <version.h>
+
+/**
+ * Calculate a smaller virtual size for discounted Confidential Transactions.
+ */
+static inline int64_t GetDiscountVirtualTransactionSize(const CTransaction& tx, int64_t nSigOpCost = 0, unsigned int bytes_per_sig_op = 0)
+{
+    int64_t size_bytes = ::GetSerializeSize(tx, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) * (WITNESS_SCALE_FACTOR - 1) + ::GetSerializeSize(tx, PROTOCOL_VERSION);
+    int64_t sigop_bytes = nSigOpCost * bytes_per_sig_op;
+
+    int64_t weight = std::max(size_bytes, sigop_bytes);
+
+    // for each confidential output
+    for (size_t i = 0; i < tx.vout.size(); ++i) {
+        const CTxOut& output = tx.vout[i];
+        if (output.IsFee()) continue;
+        if (output.nAsset.IsCommitment() && output.nValue.IsCommitment()) {
+            // subtract the weight of the output witness
+            weight -= ::GetSerializeSize(tx.witness.vtxoutwit[i], PROTOCOL_VERSION);
+            // subtract the weight difference of amount commitment (33) vs explicit amount (9)
+            weight -= (33 - 9);
+            // subtract the weight difference of the confidential nonce (33)
+            weight -= 33;
+        }
+    }
+    assert(weight > 0);
+
+    size_t discountvsize = (weight + WITNESS_SCALE_FACTOR - 1) / WITNESS_SCALE_FACTOR;
+
+    assert(discountvsize > 0);
+    return discountvsize;
+}
+
+#endif // BITCOIN_POLICY_DISCOUNT_H
diff --git a/src/policy/policy.h b/src/policy/policy.h
index f7e34546ed4..f62f9a86402 100644
--- a/src/policy/policy.h
+++ b/src/policy/policy.h
@@ -7,6 +7,7 @@
 #define BITCOIN_POLICY_POLICY_H
 
 #include <consensus/consensus.h>
+#include <policy/discount.h>
 #include <policy/feerate.h>
 #include <script/interpreter.h>
 #include <script/standard.h>
diff --git a/src/txmempool.cpp b/src/txmempool.cpp
index c46b685b081..5d29751185e 100644
--- a/src/txmempool.cpp
+++ b/src/txmempool.cpp
@@ -13,6 +13,7 @@
 #include <consensus/tx_verify.h>
 #include <consensus/validation.h>
 #include <pegins.h>
+#include <policy/discount.h>
 #include <policy/fees.h>
 #include <policy/policy.h>
 #include <policy/settings.h>
@@ -965,7 +966,14 @@ void CTxMemPool::queryHashes(std::vector<uint256>& vtxid) const
 }
 
 static TxMempoolInfo GetInfo(CTxMemPool::indexed_transaction_set::const_iterator it) {
-    return TxMempoolInfo{it->GetSharedTx(), it->GetTime(), it->GetFee(), it->GetTxSize(), it->GetModifiedFee() - it->GetFee()};
+    // ELEMENTS: include the discounted vsize of the tx
+    size_t discountvsize = it->GetTxSize();
+    CTransaction tx = it->GetTx();
+    // discountvsize only differs from vsize if we accept discounted CTs
+    if (Params().GetAcceptDiscountCT()) {
+        discountvsize = GetDiscountVirtualTransactionSize(tx);
+    }
+    return TxMempoolInfo{it->GetSharedTx(), it->GetTime(), it->GetFee(), it->GetTxSize(), it->GetModifiedFee() - it->GetFee(), discountvsize};
 }
 
 std::vector<TxMempoolInfo> CTxMemPool::infoAll() const
diff --git a/src/txmempool.h b/src/txmempool.h
index 8b5e442a144..958056da1fd 100644
--- a/src/txmempool.h
+++ b/src/txmempool.h
@@ -345,6 +345,9 @@ struct TxMempoolInfo
 
     /** The fee delta. */
     int64_t nFeeDelta;
+
+    /** ELEMENTS: Discounted CT size. */
+    size_t discountvsize;
 };
 
 /** Reason why a transaction was removed from the mempool,
diff --git a/src/validation.cpp b/src/validation.cpp
index 1bd2e18ba36..c197de57f3d 100644
--- a/src/validation.cpp
+++ b/src/validation.cpp
@@ -914,7 +914,12 @@ bool MemPoolAccept::PreChecks(ATMPArgs& args, Workspace& ws)
 
     // No transactions are allowed below minRelayTxFee except from disconnected
     // blocks
-    if (!bypass_limits && !CheckFeeRate(ws.m_vsize, ws.m_modified_fees, state)) return false;
+    bool fee_check = CheckFeeRate(ws.m_vsize, ws.m_modified_fees, state);
+    // ELEMENTS: accept discounted fees for Confidential Transactions only, if enabled.
+    if (Params().GetAcceptDiscountCT()) {
+        fee_check = CheckFeeRate(GetDiscountVirtualTransactionSize(tx), ws.m_modified_fees, state);
+    }
+    if (!bypass_limits && !fee_check) return false;
 
     ws.m_iters_conflicting = m_pool.GetIterSet(ws.m_conflicts);
     // Calculate in-mempool ancestors, up to a limit.
diff --git a/src/wallet/spend.cpp b/src/wallet/spend.cpp
index 65a7a6f228d..f7bd721cef2 100644
--- a/src/wallet/spend.cpp
+++ b/src/wallet/spend.cpp
@@ -174,6 +174,11 @@ TxSize CalculateMaximumSignedTxSize(const CTransaction &tx, const CWallet *walle
     CTransaction ctx(txNew);
     int64_t vsize = GetVirtualTransactionSize(ctx);
     int64_t weight = GetTransactionWeight(ctx);
+    // ELEMENTS: use discounted vsize for CTs if enabled
+    if (Params().GetCreateDiscountCT()) {
+        vsize = GetDiscountVirtualTransactionSize(ctx);
+    }
+
     return TxSize{vsize, weight};
 }
 
diff --git a/test/functional/feature_discount_ct.py b/test/functional/feature_discount_ct.py
new file mode 100755
index 00000000000..8a295946678
--- /dev/null
+++ b/test/functional/feature_discount_ct.py
@@ -0,0 +1,151 @@
+#!/usr/bin/env python3
+# Copyright (c) 2016 The Bitcoin Core developers
+# Distributed under the MIT/X11 software license, see the accompanying
+# file COPYING or http://www.opensource.org/licenses/mit-license.php.
+
+from decimal import Decimal
+from test_framework.test_framework import BitcoinTestFramework
+from test_framework.util import (
+    assert_equal,
+)
+
+class CTTest(BitcoinTestFramework):
+    def set_test_params(self):
+        self.num_nodes = 3
+        self.setup_clean_chain = True
+        args = [
+            "-anyonecanspendaremine=1",
+            "-con_blocksubsidy=0",
+            "-con_connect_genesis_outputs=1",
+            "-initialfreecoins=2100000000000000",
+            "-txindex=1",
+        ]
+        self.extra_args = [
+            # node 0 does not accept nor create discounted CTs
+            args + ["-acceptdiscountct=0", "-creatediscountct=0"],
+            # node 1 accepts but does not create discounted CTs
+            args + ["-acceptdiscountct=1", "-creatediscountct=0"],
+            # node 2 both accepts and creates discounted CTs
+            args + ["-acceptdiscountct=1", "-creatediscountct=1"],
+        ]
+
+    def skip_test_if_missing_module(self):
+        self.skip_if_no_wallet()
+
+    def run_test(self):
+        feerate = 1.0
+
+        node0 = self.nodes[0]
+        node1 = self.nodes[1]
+        node2 = self.nodes[2]
+
+        self.generate(node0, 101)
+        balance = node0.getbalance()
+        assert_equal(balance['bitcoin'], 21000000)
+
+        self.log.info("Create UTXOs")
+        many = {}
+        num = 25
+        for i in range(num):
+            addr = node0.getnewaddress()
+            info = node0.getaddressinfo(addr)
+            many[info['unconfidential']] = 1
+        for i in range(10):
+            addr = node1.getnewaddress()
+            info = node1.getaddressinfo(addr)
+            many[info['unconfidential']] = 1
+        for i in range(10):
+            addr = node2.getnewaddress()
+            info = node2.getaddressinfo(addr)
+            many[info['unconfidential']] = 1
+
+        txid = node0.sendmany("", many)
+        self.generate(node0, 1)
+
+        self.log.info("Send explicit tx to node 0")
+        addr = node0.getnewaddress()
+        info = node0.getaddressinfo(addr)
+        txid = node0.sendtoaddress(info['unconfidential'], 1.0, "", "", False, None, None, None, None, None, None, feerate)
+        tx = node0.gettransaction(txid, True, True)
+        decoded = tx['decoded']
+        vin = decoded['vin']
+        vout = decoded['vout']
+        assert_equal(len(vin), 2)
+        assert_equal(len(vout), 3)
+        assert_equal(tx['fee']['bitcoin'], Decimal('-0.00000326'))
+        assert_equal(decoded['vsize'], 326)
+        self.generate(node0, 1)
+
+        self.log.info("Send confidential tx to node 0")
+        addr = node0.getnewaddress()
+        info = node0.getaddressinfo(addr)
+        txid = node0.sendtoaddress(info['confidential'], 1.0, "", "", False, None, None, None, None, None, None, feerate)
+        tx = node0.gettransaction(txid, True, True)
+        decoded = tx['decoded']
+        vin = decoded['vin']
+        vout = decoded['vout']
+        assert_equal(len(vin), 2)
+        assert_equal(len(vout), 3)
+        assert_equal(tx['fee']['bitcoin'], Decimal('-0.00002575'))
+        assert_equal(decoded['vsize'], 2575)
+        self.generate(node0, 1)
+
+        self.log.info("Send explicit tx to node 1")
+        addr = node1.getnewaddress()
+        info = node1.getaddressinfo(addr)
+        txid = node0.sendtoaddress(info['unconfidential'], 1.0, "", "", False, None, None, None, None, None, None, feerate)
+        tx = node0.gettransaction(txid, True, True)
+        decoded = tx['decoded']
+        vin = decoded['vin']
+        vout = decoded['vout']
+        assert_equal(len(vin), 2)
+        assert_equal(len(vout), 3)
+        assert_equal(tx['fee']['bitcoin'], Decimal('-0.00000326'))
+        assert_equal(decoded['vsize'], 326)
+        self.generate(node0, 1)
+
+        self.log.info("Send confidential (undiscounted) tx to node 1")
+        addr = node1.getnewaddress()
+        info = node1.getaddressinfo(addr)
+        txid = node0.sendtoaddress(info['confidential'], 1.0, "", "", False, None, None, None, None, None, None, feerate)
+        tx = node0.gettransaction(txid, True, True)
+        decoded = tx['decoded']
+        vin = decoded['vin']
+        vout = decoded['vout']
+        assert_equal(len(vin), 2)
+        assert_equal(len(vout), 3)
+        assert_equal(tx['fee']['bitcoin'], Decimal('-0.00002575'))
+        assert_equal(decoded['vsize'], 2575)
+        self.generate(node0, 1)
+
+        self.log.info("Send confidential (discounted) tx to node 1")
+        bitcoin = 'b2e15d0d7a0c94e4e2ce0fe6e8691b9e451377f6e46e8045a86f7c4b5d4f0f23'
+        addr = node1.getnewaddress()
+        info = node1.getaddressinfo(addr)
+        txid = node2.sendtoaddress(info['confidential'], 1.0, "", "", False, None, None, None, None, None, None, feerate)
+        # node0 won't accept or relay the tx
+        self.sync_mempools([node1, node2])
+        assert_equal(node0.getrawmempool(), [])
+        self.generate(node2, 1, sync_fun=self.sync_blocks)
+        for node in [node2, node1]:
+            tx = node.gettransaction(txid, True, True)
+            decoded = tx['decoded']
+            vin = decoded['vin']
+            vout = decoded['vout']
+            assert_equal(len(vin), 2)
+            assert_equal(len(vout), 3)
+            if 'bitcoin' in decoded['fee']:
+                assert_equal(decoded['fee']['bitcoin'], Decimal('-0.00000408'))
+            else:
+                assert_equal(decoded['fee'][bitcoin], Decimal('0.00000408'))
+            assert_equal(decoded['vsize'], 2575)
+            assert_equal(decoded['discountvsize'], 408)
+
+        # node0 should report the same discountvsize and vsize
+        tx = node0.getrawtransaction(txid, True)
+        assert_equal(tx['vsize'], 2575)
+        assert_equal(tx['discountvsize'], 2575)
+
+
+if __name__ == '__main__':
+    CTTest().main()
diff --git a/test/functional/test_runner.py b/test/functional/test_runner.py
index 8cde0b32f4e..25af579e316 100755
--- a/test/functional/test_runner.py
+++ b/test/functional/test_runner.py
@@ -185,6 +185,8 @@
     'wallet_avoidreuse.py --descriptors',
     'mempool_reorg.py',
     'mempool_persist.py',
+    # ELEMENTS: discounted Confidential Transactions
+    'feature_discount_ct.py',
     'wallet_multiwallet.py --legacy-wallet',
     'wallet_multiwallet.py --descriptors',
     'wallet_multiwallet.py --usecli',
diff --git a/test/util/data/blanktxv1.json b/test/util/data/blanktxv1.json
index 3d5a1cccae3..78b99caa084 100644
--- a/test/util/data/blanktxv1.json
+++ b/test/util/data/blanktxv1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 10,
     "vsize": 10,
+    "discountvsize": 10,
     "weight": 40,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/blanktxv2.json b/test/util/data/blanktxv2.json
index 8374a34adcf..d2cb037661d 100644
--- a/test/util/data/blanktxv2.json
+++ b/test/util/data/blanktxv2.json
@@ -4,6 +4,7 @@
     "version": 2,
     "size": 10,
     "vsize": 10,
+    "discountvsize": 10,
     "weight": 40,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/tt-delin1-out.json b/test/util/data/tt-delin1-out.json
index 31e2ed2198a..6cf5c76b6fb 100644
--- a/test/util/data/tt-delin1-out.json
+++ b/test/util/data/tt-delin1-out.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 3040,
     "vsize": 3040,
+    "discountvsize": 3040,
     "weight": 12160,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/tt-delout1-out.json b/test/util/data/tt-delout1-out.json
index bedbc145333..c6dc5eee666 100644
--- a/test/util/data/tt-delout1-out.json
+++ b/test/util/data/tt-delout1-out.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 3155,
     "vsize": 3155,
+    "discountvsize": 3155,
     "weight": 12620,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/tt-locktime317000-out.json b/test/util/data/tt-locktime317000-out.json
index 1df91d1882a..9dd4ef17e34 100644
--- a/test/util/data/tt-locktime317000-out.json
+++ b/test/util/data/tt-locktime317000-out.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 3189,
     "vsize": 3189,
+    "discountvsize": 3189,
     "weight": 12756,
     "locktime": 317000,
     "vin": [
diff --git a/test/util/data/txcreate1.json b/test/util/data/txcreate1.json
index 2b0af9d04a2..24701a7dde0 100644
--- a/test/util/data/txcreate1.json
+++ b/test/util/data/txcreate1.json
@@ -4,6 +4,7 @@
     "version": 2,
     "size": 201,
     "vsize": 201,
+    "discountvsize": 201,
     "weight": 804,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreate2.json b/test/util/data/txcreate2.json
index 95953cc90e5..8464c58f569 100644
--- a/test/util/data/txcreate2.json
+++ b/test/util/data/txcreate2.json
@@ -4,6 +4,7 @@
     "version": 2,
     "size": 19,
     "vsize": 19,
+    "discountvsize": 19,
     "weight": 76,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatedata1.json b/test/util/data/txcreatedata1.json
index 403ecd15967..d37fde636f3 100644
--- a/test/util/data/txcreatedata1.json
+++ b/test/util/data/txcreatedata1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 176,
     "vsize": 176,
+    "discountvsize": 176,
     "weight": 704,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatedata2.json b/test/util/data/txcreatedata2.json
index 58fe4e635f0..ba5be9efc93 100644
--- a/test/util/data/txcreatedata2.json
+++ b/test/util/data/txcreatedata2.json
@@ -4,6 +4,7 @@
     "version": 2,
     "size": 176,
     "vsize": 176,
+    "discountvsize": 176,
     "weight": 704,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatedata_seq0.json b/test/util/data/txcreatedata_seq0.json
index c1af318c922..e05ffd197aa 100644
--- a/test/util/data/txcreatedata_seq0.json
+++ b/test/util/data/txcreatedata_seq0.json
@@ -4,6 +4,7 @@
     "version": 2,
     "size": 85,
     "vsize": 85,
+    "discountvsize": 85,
     "weight": 340,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatedata_seq1.json b/test/util/data/txcreatedata_seq1.json
index 0eaeb9078af..eb117c40c40 100644
--- a/test/util/data/txcreatedata_seq1.json
+++ b/test/util/data/txcreatedata_seq1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 126,
     "vsize": 126,
+    "discountvsize": 126,
     "weight": 504,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatemultisig1.json b/test/util/data/txcreatemultisig1.json
index 9632b20ece9..e21810d5b13 100644
--- a/test/util/data/txcreatemultisig1.json
+++ b/test/util/data/txcreatemultisig1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 124,
     "vsize": 124,
+    "discountvsize": 124,
     "weight": 496,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatemultisig2.json b/test/util/data/txcreatemultisig2.json
index 021cf539a8b..15de8158245 100644
--- a/test/util/data/txcreatemultisig2.json
+++ b/test/util/data/txcreatemultisig2.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 42,
     "vsize": 42,
+    "discountvsize": 42,
     "weight": 168,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatemultisig3.json b/test/util/data/txcreatemultisig3.json
index 3c20a88a912..d1235bc4ea2 100644
--- a/test/util/data/txcreatemultisig3.json
+++ b/test/util/data/txcreatemultisig3.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 53,
     "vsize": 53,
+    "discountvsize": 53,
     "weight": 212,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatemultisig4.json b/test/util/data/txcreatemultisig4.json
index 7ae18fd90af..7df43b855f5 100644
--- a/test/util/data/txcreatemultisig4.json
+++ b/test/util/data/txcreatemultisig4.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 42,
     "vsize": 42,
+    "discountvsize": 42,
     "weight": 168,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatemultisig4_elements.json b/test/util/data/txcreatemultisig4_elements.json
index 4691474dc7d..06cce59aa26 100644
--- a/test/util/data/txcreatemultisig4_elements.json
+++ b/test/util/data/txcreatemultisig4_elements.json
@@ -6,6 +6,7 @@
     "version": 1,
     "size": 78,
     "vsize": 78,
+    "discountvsize": 78,
     "weight": 312,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatemultisig5.json b/test/util/data/txcreatemultisig5.json
index 98a5c2d8d1e..93d42ea04b0 100644
--- a/test/util/data/txcreatemultisig5.json
+++ b/test/util/data/txcreatemultisig5.json
@@ -4,6 +4,7 @@
     "version": 2,
     "size": 42,
     "vsize": 42,
+    "discountvsize": 42,
     "weight": 168,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreateoutpubkey1.json b/test/util/data/txcreateoutpubkey1.json
index 3baf479991f..1345796352d 100644
--- a/test/util/data/txcreateoutpubkey1.json
+++ b/test/util/data/txcreateoutpubkey1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 54,
     "vsize": 54,
+    "discountvsize": 54,
     "weight": 216,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreateoutpubkey2.json b/test/util/data/txcreateoutpubkey2.json
index 78acf1658bb..95ce09c7f45 100644
--- a/test/util/data/txcreateoutpubkey2.json
+++ b/test/util/data/txcreateoutpubkey2.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 41,
     "vsize": 41,
+    "discountvsize": 41,
     "weight": 164,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreateoutpubkey3.json b/test/util/data/txcreateoutpubkey3.json
index 632ed52ccf0..c3291a6f53d 100644
--- a/test/util/data/txcreateoutpubkey3.json
+++ b/test/util/data/txcreateoutpubkey3.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 42,
     "vsize": 42,
+    "discountvsize": 42,
     "weight": 168,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatescript1.json b/test/util/data/txcreatescript1.json
index cdee9dbbfa8..f7ca15c7b0d 100644
--- a/test/util/data/txcreatescript1.json
+++ b/test/util/data/txcreatescript1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 20,
     "vsize": 20,
+    "discountvsize": 20,
     "weight": 80,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatescript2.json b/test/util/data/txcreatescript2.json
index 1fbae62f4b0..da5f431a0ee 100644
--- a/test/util/data/txcreatescript2.json
+++ b/test/util/data/txcreatescript2.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 42,
     "vsize": 42,
+    "discountvsize": 42,
     "weight": 168,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatescript3.json b/test/util/data/txcreatescript3.json
index 502fe91692e..9683b121a89 100644
--- a/test/util/data/txcreatescript3.json
+++ b/test/util/data/txcreatescript3.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 53,
     "vsize": 53,
+    "discountvsize": 53,
     "weight": 212,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatescript4.json b/test/util/data/txcreatescript4.json
index 1ed89dfff23..42167e28b4d 100644
--- a/test/util/data/txcreatescript4.json
+++ b/test/util/data/txcreatescript4.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 42,
     "vsize": 42,
+    "discountvsize": 42,
     "weight": 168,
     "locktime": 0,
     "vin": [
diff --git a/test/util/data/txcreatesignv1.json b/test/util/data/txcreatesignv1.json
index 592ad699343..1019e88d450 100644
--- a/test/util/data/txcreatesignv1.json
+++ b/test/util/data/txcreatesignv1.json
@@ -4,6 +4,7 @@
     "version": 1,
     "size": 223,
     "vsize": 223,
+    "discountvsize": 223,
     "weight": 892,
     "locktime": 0,
     "vin": [