Thunderdome: Timelock-Free Rationally-Secure Virtual Channels

TL;DR

Thunderdome provides a timelock-free alternative to traditional payment channel networks by introducing virtual channels secured by a committee of wardens operating over Brick-based channels. It combines secure open/update/close protocols with cross-contract checks and a leader contract to ensure consistent final states, while also furnishing Byzantine and game-theoretic analyses (including SPNE) to guarantee balance security and liveness under asynchronous conditions and rational adversaries. A proof-of-concept on Ethereum demonstrates feasibility and offers concrete cost estimates, showing that removing timelocks incurs modest additional on-chain costs compared to timelock-based approaches. The work advances scalable, censorship-resistant off-chain payments and lays groundwork for extensions to privacy and broader state-based interactions, with practical implications for deploying large-scale PCN architectures.

Abstract

Payment channel networks (PCNs) offer a promising solution to address the limited transaction throughput of deployed blockchains. However, several attacks have recently been proposed that stress the vulnerability of PCNs to timelock and censoring attacks. To address such attacks, we introduce Thunderdome, the first timelock-free PCN. Instead, Thunderdome leverages the design rationale of virtual channels to extend a timelock-free payment channel primitive, thereby enabling multi-hop transactions without timelocks. Previous works either utilize timelocks or do not accommodate transactions between parties that do not share a channel. At its core, Thunderdome relies on a committee of non-trusted watchtowers, known as wardens, who ensure that no honest party loses funds, even when offline, during the channel closure process. We introduce tailored incentive mechanisms to ensure that all participants follow the protocol's correct execution. Besides a traditional security proof that assumes an honest majority of the committee, we conduct a formal game-theoretic analysis to demonstrate the security of Thunderdome when all participants, including wardens, act rationally. We implement a proof of concept of Thunderdome on Ethereum to validate its feasibility and evaluate its costs. Our evaluation shows that deploying Thunderdome, including opening the underlying payment channel, costs approximately \$15 (0.0089 ETH), while the worst-case cost for closing a channel is about \$7 (0.004 ETH).

Figures (11)

• Figure 1: Brick payment channel
• Figure 2: Virtual channel structure
• Figure 3: Thunderdome structure
• Figure 4: Multi-hop Thunderdome
• Figure 5: Closing game started by Bob. The utility is presented in the form of (Bob, Ingrid), $\alpha$ represents the incentive for closing Thunderdome, and $d_B$ represents Bob's profit for close Thunderdome incorrectly. The circle with blue dotted line denotes two parties share the same information set.

Theorems & Definitions (38)

• Definition 1: Balance security
• Definition 2: Liveness
• Theorem 1
• Theorem 2
• Theorem 3
• Theorem 4
• Lemma 1
• proof
• Theorem 4
• proof