Paper 2025/1517

Universally Composable Treatment of Multi-Party Isomorphic State Channels

Abstract

Layer-2 protocols are pivotal in enhancing the scalability of blockchain systems, enabling faster off-chain transactions while maintaining security. These protocols can bridge consensus-based blockchain systems and advanced applications, such as Multiparty Computation (MPC) protocols, often defined within the Universal Composability (UC) Framework. However, despite the existence of some UC-defined protocols, there is currently no comprehensive UC definition for isomorphic multiparty state channels, in particular that are not dependent on the ledger model: account or UTxO based ledger. These protocols depend heavily on timelock mechanisms and the accurate representation of time, which are challenging to model within the UC Framework. Our work addresses this gap by proposing a UC-based definition, i.e., functionality, for isomorphic multi-party state channels that realistically model timely actions of honest users, a critical feature for the security of the channel protocol. Moreover our definition is agnostic with respect to the ledger model. Additionally, we introduce an extended timelock-aided global ledger functionality and demonstrate the security of existing protocols, namely Hydra proposed by Chakravarty et al. (FC'21), under the UC Framework and our proposed functionalities. This contribution provides a robust foundation for developing secure and scalable off-chain protocols in blockchain ecosystems. Finally, we concretely provide the construction of the extension of the Hydra Protocol, only outlined by the original work, and also prove it secure under our framework.