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Paper 2019/360

SoK: Layer-Two Blockchain Protocols

Lewis Gudgeon and Pedro Moreno-Sanchez and Stefanie Roos and Patrick McCorry and Arthur Gervais

Abstract

Blockchains have the potential to revolutionize markets and services. However, they currently exhibit high latencies and fail to handle transaction loads comparable to those managed by traditional financial systems. Layer-two protocols, built on top of layer-one blockchains, avoid disseminating every transaction to the whole network by exchanging authenticated transactions off-chain. Instead, they utilize the expensive and low-rate blockchain only as a recourse for disputes. The promise of layer-two protocols is to complete off-chain transactions in sub-seconds rather than minutes or hours while retaining asset security, reducing fees and allowing blockchains to scale. We systematize the evolution of layer-two protocols over the period from the inception of cryptocurrencies in 2009 until today, structuring the multifaceted body of research on layer-two transactions. Categorizing the research into payment and state channels, commit-chains and protocols for refereed delegation, we provide a comparison of the protocols and their properties. We provide a systematization of the associated synchronization and routing protocols along with their privacy and security aspects. This Systematization of Knowledge (SoK) clears the layer-two fog, highlights the potential of layer-two solutions and identifies their unsolved challenges, indicating propitious avenues of future work.

Metadata
Available format(s)
PDF
Category
Applications
Publication info
Published elsewhere. Minor revision. Financial Cryptography and Data Security 2020
Keywords
blockchainsokpayment channelsstate channelscommit-chains
Contact author(s)
l gudgeon18 @ imperial ac uk,pedro sanchez @ tuwien ac at,s roos @ tudelft nl,patrick mccorry @ kcl ac uk,a gervais @ imperial ac uk
History
2020-03-23: revised
2019-04-10: received
See all versions
Short URL
https://ia.cr/2019/360
License
Creative Commons Attribution
CC BY
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