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loop/docs/architecture.md
2019-03-13 16:11:04 -07:00

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# Loop Architecture
Lightning Loop's architecture for orchestrating submarine swaps is based on a
client/server concept.
The client has a swap execution daemon `loopd` controlled by a CLI application
`loop` which uses a gRPC API. The client daemon initiates swaps and handles
their progress through swap phases. To manage keys and the connection to the
LN/BTC network layers the client daemon connects to a local lnd wallet.
Client daemons communicate with the Loop server daemon, which is opaque but
operates in a similar way. The server is not a trusted component in this
architecture; the client daemon validates that the terms of the swap are
acceptable and the server cannot access the swap funds unless the swap enters
the "complete" phase.
## Loop Out Swap (off -> on-chain)
Phases:
1. Initiation: Client queries for terms of a swap
2. Fee: Client sends a small fee HTLC that is unrestricted
3. Funding: Client sends a funding HTLC locked to a preimage they generate
4. Payment: Server sends the funds on-chain locked to the funding preimage hash
5. Complete: Client uses the preimage to take the on-chain funds.
6. Final: The server uses the on-chain-revealed preimage to claim funding HTLC
```
loop out 500
|
|
v
.-----------------------------.
| Loop CLI |
| ./cmd/loop |
| |
| |
| .-------------------. | .--------------. .---------------.
| | Loop Client (lib) | | | LND node | | Bitcoin node |
| | ./ |<-------------| |-------------------| |
| | | | | | on-chain | |
| | |------------->| | htlc | |
| | | | off-chain | | | |
| '-------------------' | htlc '--------------' '---------------'
'-----------------|-----------' | ^
| | |
| v |
| .--. .--.
| _ -( )- _ _ -( )- _
| .--,( ),--. .--,( ),--.
initiate| _.-( )-._ _.-( )-._
swap | ( LIGHTNING NETWORK ) ( BITCOIN NETWORK )
| '-._( )_.-' '-._( )_.-'
| '__,( ),__' '__,( ),__'
| - ._(__)_. - - ._(__)_. -
| | ^
| | |
v v |
.--------------------. off-chain .--------------. .---------------.
| Loop Server | htlc | LND node | | Bitcoin node |
| |<-------------| | | |
| | | | on-chain | |
| | | | htlc | |
| |--------------| |----------------->| |
| | | | | |
'--------------------' '--------------' '---------------'
```