Allow HTLC receiver to dip into channel reserve #1083
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@rustyrussell @TheBlueMatt @Roasbeef can you please check your implementation's behavior? When you are the initiator and receive an HTLC that will make you go below your channel reserve because of the increased commit tx fee, do you accept it or do you error out? If you error out, would you consider removing that check (on the receiver side) in your next release? This would pave the way for removing the check on the sender side as well once we're confident enough nodes have updated, which will be important to avoid stuck channels when using splicing. |
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Couldn't this get us into a situation where all of the receiver's channel reserve is allocated to fees while HTLCs are pending? If so, I'm afraid we may incentivize cheating attempts. Suppose the downstream HTLC(s) are failed while the upstream node (sender) goes offline. The receiver is then faced with the following choices:
It seems cheating is incentivized in this scenario. |
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This seems like the opposite of the way we should go here - instead of allowing us to violate a key security limit set in the protocol any concern about this should be fixed by being more conservative about when to dip into that limit. Indeed, its the case that its the one sending the message that is screwing themselves, but the protocol is strict here for a reason, and I think this is fundamentally the wrong fix. And, yes, LDK currently does check and will error the channel if its reserve limit is violated. |
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Thanks for your feedback!
Yes, that can indeed happen, but I don't think this is an issue. Let's look at your example scenario:
If the HTLCs are fulfilled, B has no incentive to try to cheat (he's earning money), so let's only consider the case where the HTLCs are failed:
So it seems to me that the incentives are properly aligned, B always risks losing funds if he broadcasts a revoked commitment (on top of the fees he's paying for force-closing since he's the initiator).
I disagree, I don't believe the protocol is strict in this case for a reason, but instead just to make the behavior uniform with other cases. I believe this specific case has no security reason for forcing the channel reserve to be met. If you think it does, can you detail why? Making the behavior uniform would be a good reason in itself if it didn't create issues. |
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This part is a little bit fuzzy to me: I think we want to keep the axiom of "Bob must always stands to lose amount
I think there is a chance that the outputs on the HTLCs are small enough that after paying for all their fees, and then sweeping them, then final output that Bob gets is less than I totally agree that there are cases where we should allow a dip below the reserve but I think it should be dependent on the value of the HTLC (plus a healthy fee range) and hence if the effective Also, to answer your initial question: an LND initiator receiver will currently fail if the incoming HTLC dips into the reserve: https://github.com/lightningnetwork/lnd/blob/b9b20acd4126fef40d1ff7e06afdd4654012e1cf/lnwallet/channel.go#L3630 |
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That's a very good point, in the scenario where B has to force-close because he also has HTLCs at risk, if all of his reserve has been moved to miner fees, the amount he would lose by cheating is the sum of those HTLCs that belong to him (minus the corresponding on-chain fees), which can be smaller than his channel reserve.
I'm not sure we do to be honest, at least not at the spec level. I'd leave that decision to the sender (because he's the one taking that risk to unblock its channel) on a per-implementation basis. If senders want to preserve that property, they can use one of the following strategies:
But implementations can also choose to be fine without that, because B would still lose something (even if it's smaller than the reserve) and some non-quantifiable expected revenue (from future routing and from already having a channel instead of needing to open a new one). Also, we need to consider that A earns something by catching B's cheating attempt: we should probably consider the sum of what B loses and what A earns, not just what B loses? Even though this can be tricky to analyze because it depends on all the channel history and which revoked commit B broadcasts. I can detail in the rationale that implementations need to decide what behavior they want to implement if we are ok with that approach. In any case, do we at least agree that the receiver (when it is the channel initiator) shouldn't check that reserve requirement? If the sender lets them dip in their channel reserve, they should happily do so, the sender is taking a risk, not them? And thus the choice is only on what behavior the sender wants to have? |
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An alternative solution is to not let the initiator spend down to the channel reserve in the first place. Allow some buffer, somewhere between 1 and For splices that increase the initiator's required reserve, the initiator can be allowed a grace period similar to what we already do for the non-initiator. During the grace period, the initiator cannot send HTLCs until they are above the reserve requirement plus buffer. They can dip into the new channel reserve to receive HTLCs provided they don't violate the previous channel reserve. This would ensure the initiator always has at least the original channel reserve at risk. And after the initiator has a balance above the new channel reserve plus buffer, they will thereafter always have at least the new channel reserve at risk. |
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Another corner case to consider is an initiator reserve requirement of 0. In this case we definitely need to maintain a buffer to pay HTLC relay fees, since there's no reserve to dip into. |
This is already what we do with the "funder fee buffer" introduced after #728. It mitigated that kind of issue, but it isn't a perfect solution at all, so we can still reach cases where we're stuck (after an
That could work in most cases, but it still doesn't solve the issue of an
This is already done with the "funder fee buffer". Also, in the long run, we'll be able to get rid of this kind of issue entirely once we have package relay + v3 transactions and can make commitment transactions pay 0 fee. I really can't wait for that to happen because it's so much simpler and cleaner! Back to my current proposal, I'd like to focus on why we shouldn't do it before considering more complex alternatives. My current understanding is that:
Do you disagree on any of those points? Why? |
Yep, makes sense. Though this is not restricted by the current spec.
Loses funds compared to what? There is the corner case I mentioned previously where 100% of channel reserve is allocated to fees. In this case, if the initiator needs to go onchain (e.g., shutting down the node permanently), they may as well try to cheat, since they have nothing to lose. And there doesn't need to be 100% of channel reserve allocated to fees before cheating attempts become higher EV than being honest. Maybe it's only 90%. Maybe it's 50%. Maybe less.
Yes, that's what we're trying to solve here, though there are alternative solutions (buffer).
Yes, they can control their own risk. There seems to be room for this in the current spec already -- it says the sender SHOULD NOT allow dipping into the receiver's reserve but doesn't say MUST NOT. And implementations can always decide what to implement themselves, regardless of what the spec says. What I'm not sure about is changing the spec to recommend violating the channel reserve in this case. Some thoughts: If we decide to let the receiver dip into their reserve, we should really set a limit to how far they can dip into their reserve. Let's call this limit This is equivalent to simply setting the original channel reserve requirement to |
Loses funds by publishing a revoked commitment instead of:
Assuming that the revoked commitment is caught and punished (otherwise, there's an incentive to cheat regardless of the channel reserve):
I agree with you that if all of their remaining balance is consumed in on-chain fees, then there are cases where they wouldn't lose any funds. The sender should thus make sure that the receiver still has an output in the commitment transaction, with an amount that is not too far below the channel reserve (where each sender chooses their safety value). I will re-work the PR to present if this way: "the sender may dip into the channel reserve, but shouldn't exceed some threshold they're comfortable with". Regarding the buffer on top of the reserve: as I previously mentioned, we already have that mechanism in place. But it is not sufficient, as the following scenario highlights:
Alice has now "lost" her buffer, so it's not a good enough solution to ensure that the channel doesn't get stuck. Your suggestion was to use the previous reserve after that splice, but what do you do if other splices are performed? You'll need to track a list of previous reserves, which can probably open up games where your peer makes a splice-out first (to shrink the reserve) and a splice-in afterwards (to grow it back, while still being allowed to use the smaller previous reserve)... I think that allowing the sender to temporarily dip into the receiver's reserve for HTLCs that will make the receiver increase their balance if fulfilled is simpler to reason about and implement (while taking into account the risk exposure that you and @ellemouton rightfully reported). |
When an HTLC is added, the size of the commitment transaction increases while that HTLC is pending, which also increases the on-chain fee that the channel initiator must deduce from its main output. Before sending an HTLC, when we're not the channel initiator, we thus must ensure that our peer has enough balance to pay for the increased commitment transaction fee. We previously went further than that, and also required that our peer stayed above their channel reserve. That additional requirement was unnecessary, and there was no matching receiver-side requirement, so it should be safe to delete. It makes a lot of sense to allow the HTLC receiver to dip into its channel reserve to pay the fee for an HTLC they're receiving, because this HTLC will either: - be failed, in which case the balance goes back above channel reserve - be fulfilled, in which case the balance increases which also helps meet the channel reserve This also prevents channels from being stuck if the reserve becomes dynamic (which will be the case with splicing). Without that change, we can end up in a situation where most of the channel funds are on the non-initiator side, but they cannot send HTLCs because that would make the initiator dip into their reserve to pay the increased fee. Since this effectively shrinks the channel initiator's reserve, the sender must ensure that the resulting reserve is still large enough to incentivize the initiator to behave honestly (for example by allowing only X% of the channel reserve to be used for fees).
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This scenario is solved by the grace period. Specifically, Alice is not allowed to send any HTLCs, but she can receive HTLCs as long as the fees don't put her below 10,000 sats. Once she's above 15,000 sats plus the buffer, the grace period is over.
I'm not understanding the problem with multiple splices, whether they happen concurrently or not. Non-concurrent splicesEach time a splice confirms to sufficient depth, all commitments for the old funding transaction are invalidated and can be thrown away. We only need to track the previously confirmed funding transaction and any splices that are still in flight. So splicing out to shrink the reserve and then splicing back in to grow the reserve causes no problems:
Concurrent splicesIf we want to send/receive HTLCs while there are multiple unconfirmed splices in flight, we already need to track all potential channel capacities and reserves and ensure we satisfy all of them while splices are in flight. In the example above, even though Bob's new channel balance will be 135,000 sats he cannot spend more than 75,000 sats until the splice is confirmed to a sufficient depth. Otherwise Bob's balance on the pre-splice commitment balance would be below his channel reserve. Again, we already need to remember all potential channel reserves to do HTLCs safely while splicing. Adding a grace period doesn't make this more difficult. If one or more pending splices increase the reserve, we simply apply the grace period rule when deciding whether to add an HTLC to all commitments. This should be a small branch in the HTLC-handling code. And once a potential splice confirms to sufficient depth, we can forget everything about the other commitments and channel reserves, as we normally would.
I'm not sure it really is simpler. If all implementations have already implemented a buffer, it seems to me it would be simpler to tune the size of the buffer than to add new code. And the grace period doesn't seem very tricky to me either. |
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Let me add to the previous scenario to explain why keeping track of previous reserves needs additional code that I think isn't entirely trivial. The reserve is set to 1% at every step.
With that proposal, we now need to remember previous channel reserves even though we've forgotten the previous commitments. But what buffer should we use?
That is only true while the splice transaction is unconfirmed. As soon as it is confirmed, we can forget the previous channel reserve (and we currently do), but we can't anymore if we need to keep applying them to the new commitments.
But there will never be a buffer size that can be guaranteed to be enough, that's why I believe this solution is unsufficient.
Solutions (1) and (2) are clearly impractical, that's why I think we must do solution (3). I'm not very satisfied by this, but until we have package relay and 0-fee commitment transactions, I don't think we can have a satisfying solution to that kind of issues ( The simplest form of solution (3) that has the lowest security impact is that the sender restricts itself to a single HTLC that dips into the receiver's channel reserve. This lets them unblock the channel, while only lowering the security by |
At any time, we only need to store a single
Since we never got out of the initial grace period, the reserve carries over to the next splice. The reason this works is that Alice can't send any HTLCs until she gets above the new reserve (plus buffer), and therefore any revoked commitments she publishes would actually benefit Bob. So if she never exits the grace period, we can safely roll over the Only once Alice gets out of the grace period and can start sending HTLCs again do we need to update
The buffer must always be current, regardless of the
The buffer exists to avoid going below the channel reserve when receiving HTLCs. If we don't meet the buffer, not a big deal, as long as we can keep meeting the channel reserve when receiving HTLCs. And obviously we can't send HTLCs while the buffer is violated. As described in the existing spec, the buffer should be chosen to handle fee spikes. If it can't do that, the buffer is too small.
As described above, we can forget everything except a single
Dipping into the channel reserve does not solve this problem better than the existing buffer solution. There MUST be some limit on how far we are comfortable dipping into the channel reserve, let's call it If The result is identical to what would happen using a channel reserve So if today we're getting stuck channels in practice, an equivalent solution is to reconsider and adjust the channel reserve and buffer values we're using. If we are actually comfortable with a lower reserve, let's adjust it. If we also need more buffer, let's adjust that. This equivalent solution has the benefit of keeping the definition of "channel reserve" the same, in that it is the lower bound on channel balance either peer can have. |
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What about the case where Alice has opened a channel to Bob. Alice has some balance and sends 400 dust HTLCs to Bob. Alice now has some balance which is exactly their required reserve. Bob now wishes to send a single non-dust HTLC to Alice, and in doing so pushes Alice's reserve balance into dust. This gives Alice a state where a large portion of the commitment transaction goes to mining fees with unenforceable HTLCs. Finally, the 400 dust HTLCs clear with a preimage, "giving" Bob that value. Alice now broadcasts the stale state, burning HTLCs which should have gone to Bob to fees. If Alice is a miner and mines a block within a few days, Alice gets these HTLCs back. In the 0-HTLC-fee anchor case this is a bit better because the dust threshold is much lower or really such HTLCs are burned as unclaimable rather than given back to Alice the miner, but I'm still not very comfortable with that. Dust HTLCs are ultimately enforced by the reserve value, as imperfect as that is I'm not super comfortable with breaking it more. Another approach to addressing this is Rusty's single-direction-updates-at-a-time stuff where Bob world identify that the HTLC he wants to add will violate reserve before he actually commits to it, allowing him to reject it instead. Alice must still ensure any fee updates she wants to push allow for at least one HTLC from Bob but everyone should be doing that already. |
Indeed, but you are already supposed to force-close if your peer proposes an absurdly large The fee for an additional HTLC at 10 sat/byte is 430 sat (~ 10 cents). Even at 100 sat/byte (which is much larger than the highest historical mempool min-relay-fee), this isn't a very attractive target for attackers?
Yes, that's a good way of looking at it. I've given this more thought, and I agree that the end result is quite similar, if we have a solution for the splice scenario where one peer drops below the new reserve. The only issue I see is that while the reserve is strict, the buffer is not, so nothing would prevent the initiator from consuming all of its buffer and have a balance of exactly the channel reserve. This shouldn't happen with honest participants, but since this is an area of the code that is quite complex (because it's hard to figure out the possible future states of your commitment when there are proposed unsigned
I think that would work, at the cost of two new fields in the channel data. We would check whether we're out of the grace period whenever we send/receive In summary, we currently have two proposed solutions:
I would be ok with either of these solutions. I'm still convinced that the first solution is simpler, both conceptually and in terms of implementation, but I agree that it forces senders to take an extra risk. However, this is IMHO a very controlled risk as the fee for one HTLC is pretty low, even at high feerates.
To push Alice's balance into dust with a single HTLC, the channel reserve would either need to be very low or the feerate very high (see HTLC cost at the beginning of this message). In this case, Alice may probably still want to cheat even if her balance was still in the commitment, since it would be a very small balance anyway? Note that I'm dismissing a far-away future where every sat is economically relevant, because I hope that we'll be able to get 0-fee commitment transactions before that happens, so any solution we're trying to find for this issue is only there to protect us for the next couple of years, but should be obsolete after that. |
Fair point, but replace one with 400, the example still works. I'm not convinced this is the simplest method to address the stuck channel issue. Two other options would be to implement rustys one-direction-updates-at-a-time thing or to limit the number of new HTLCs in each direction's updates to, eg, 4, and then set the buffer to 4. Maybe more importantly, you have more stats on how often this happens in practice? (And not just if it happened but if the peer maybe could have avoided it/doesn't implement a reasonable buffer). |
But we don't need to replace it with 400, the sender will only dip into the receiver's reserve once, for a single HTLC: that's sufficient to unblock the channel. This way the sender's additional risk exposure remains pretty low, while making progress towards shifting liquidity back to the receiver side. It really is just one We would simply change it to something like:
In the longer term, sure, that will give us an opportunity to find a better solution without caring about backwards-compatibility. But changing the whole commitment update mechanism isn't a simple change and we can't expect to have that soon.
I think this will be a change that would trigger a lot of debate, and I'm not sure we'd get consensus on that...You'd also still have the issue that whenever there's an
It almost never happens since we added the funder fee buffer. Without splicing, I think we can dismiss it as just a theoretical issue that doesn't happen in practice. But with splicing, this happens all the time when one side does a splice-in, so we need a solution before we can ship splicing (either dip into reserve, or as @morehouse suggests, use the older reserve until the new one is met). |
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As discussed during the spec meeting, I'm closing this PR in favor of @morehouse's proposal to specifically handle this for splicing by tracking the old reserve until the new one is met (thanks for the thorough discussion!). I still think that implementations should remove their existing receiver check (if you receive an HTLC that makes you dip into your reserve, you should be happy to let it go through as the spec doesn't tell you to reject it), so that senders may still choose to take that risk and dip into their peer's reserve if they want to (even though the spec says you should not do it). |
When an HTLC is added, the size of the commitment transaction increases while that HTLC is pending, which also increases the on-chain fee that the channel initiator must deduce from its main output.
Before sending an HTLC, when we're not the channel initiator, we thus must ensure that our peer has enough balance to pay for the increased commitment transaction fee. We previously went further than that, and also required that our peer stayed above their channel reserve.
That additional requirement was unnecessary, and there was no matching receiver-side requirement, so it should be safe to delete.
It makes a lot of sense to allow the HTLC receiver to dip into its channel reserve to pay the fee for an HTLC they're receiving, because this HTLC will either:
This also prevents channels from being stuck if the reserve becomes dynamic (which will be the case with splicing). Without that change, we can end up in a situation where most of the channel funds are on the non-initiator side, but they cannot send HTLCs because that would make the initiator dip into their reserve to pay the increased fee.
Since this effectively shrinks the channel initiator's reserve, the sender must ensure that the resulting reserve is still large enough
to incentivize the initiator to behave honestly (for example by allowing only X% of the channel reserve to be used for fees).
I'd like to know whether implementations do check this condition on the receiver side (when receiving
update_add_htlc) and verify that their channel balance is met: if it is the case, then this would be a backwards-incompatible change that could lead to force-closing channels, so we'd need to deploy this in two steps (relaxing the receiver checks first, then the sender checks).