MP‐HTLC: Enabling blockchain interoperability through a multiparty implementation of the hash time‐lock contract

Abstract

SummaryThe idea of hash time‐lock contracts (HTLCs) has been around from 2013. Nowadays these contracts power the majority of atomic swaps making decentralized exchange of tokens possible. On the other hand, HTLCs also have some flaws. For example they can only be instantiated between two parties. This is highly inefficient when many participants want to exchange tokens between the same pair of blockchains at the same time, because the number of transactions increases linearly in the number of participants. To solve this problem, in this article, we present MP‐HTLC. MP‐HTLC lets multiple users exchange tokens on different blockchains in a single instantiation of the protocol without any leader election. We prove that in case of a UTXO‐based blockchain the number of transactions remains constant regardless the number of participants. We are able to maintain the security assumptions of HTLCs using multiparty computation in the creation of the secret preimage and threshold signatures to manage transaction signing. We also present an implementation for each of the aspects of the protocol.