To help with development of apps that use the Loop daemon (`loopd`) for liquidity management, it is often useful to test it in controlled environments such as on the Bitcoin `regtest` network. Lightning Labs provides a stripped down version of the Loop server that works only for `regtest` and is only published in compiled, binary form (currently as a Docker image). The `docker-compose.yml` shows an example setup and is accompanied by a quick start script that should make getting started very easy.
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Local regtest setup
To help with development of apps that use the Loop daemon (loopd
) for
liquidity management, it is often useful to test it in controlled environments
such as on the Bitcoin regtest
network.
Lightning Labs provides a stripped down version of the Loop server that works
only for regtest
and is only published in compiled, binary form (currently as
a Docker image).
The docker-compose.yml
shows an example setup and is accompanied by a quick
start script that should make getting started very easy.
Requirements
To get this quick start demo environment operational, you need to have the following tools installed on your system:
- Docker
docker-compose
jq
git
Starting the environment
Simply download the Loop repository and run the start
command of the helper
script. This will boot up the docker-compose
environment, mine some regtest
coins, connect and create channels between the two lnd
nodes and hook up the
Loop client and servers to each other.
$ git clone https://github.com/lightninglabs/loop
$ cd loop/regtest
$ ./regtest.sh start
Looping out
Looping out is the process of moving funds from your channel (off-chain) balance
into your on-chain wallet through what is called a submarine swap. We use the
--fast
option here, otherwise the server would wait 30 minutes before
proceeding to allow for batched swaps.
$ ./regtest.sh loop out --amt 500000 --fast
Send off-chain: 500000 sat
Receive on-chain: 492688 sat
Estimated total fee: 7312 sat
Fast swap requested.
CONTINUE SWAP? (y/n): y
Swap initiated
ID: f96b2e40fd75a63eba61a6ee1e0b17788d77804c0454beb5fbbe4a42a8a06245
HTLC address: bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn
Run `loop monitor` to monitor progress.
The swap has been initiated now. Let's observe how it works:
$ ./regtest.sh loop monitor
Note: offchain cost may report as 0 after loopd restart during swap
2021-03-19T17:01:39Z LOOP_OUT INITIATED 0.005 BTC - bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn
Leave the command running, it will update with every new event. Open a second terminal window in the same folder/location and mine one block:
$ ./regtest.sh mine 1
You should see your previous window with the monitor
command update:
2021-03-19T17:01:39Z LOOP_OUT INITIATED 0.005 BTC - bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn
2021-03-19T17:04:37Z LOOP_OUT PREIMAGE_REVEALED 0.005 BTC - bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn
As soon as the PREIMAGE_REVEALED
message appears, you know the HTLC was
published to the chain. Finish the process by mining yet another block (in the
second terminal window):
$ ./regtest.sh mine 1
Your monitor
window should now show the completion of the swap:
2021-03-19T17:01:39Z LOOP_OUT INITIATED 0.005 BTC - bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn
2021-03-19T17:04:37Z LOOP_OUT PREIMAGE_REVEALED 0.005 BTC - bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn
2021-03-19T17:06:25Z LOOP_OUT SUCCESS 0.005 BTC - bcrt1qwgzsmag0579twr4d8hgfvarqxn27mdmdgfh7wc2hdlupsfqtxwyq5zltqn (cost: server 50, onchain 6687, offchain 0)
Congratulations, you just did a loop out!
Loop in
Looping in is very similar but does the opposite: swap your on-chain balance for off-chain (channel) balance:
$ ./regtest.sh loop in --amt 500000
Send on-chain: 500000 sat
Receive off-chain: 492279 sat
Estimated total fee: 7721 sat
CONTINUE SWAP? (y/n): y
Swap initiated
ID: d95167e33e79df292e5ffeda29d34614a5a087c9378ffae003b9a25bb0f1c2e4
HTLC address (P2WSH): bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f
Run `loop monitor` to monitor progress.
$ ./regtest.sh loop monitor
Note: offchain cost may report as 0 after loopd restart during swap
2021-03-19T17:17:13Z LOOP_IN HTLC_PUBLISHED 0.005 BTC - P2WSH: bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f
In your second terminal window, go ahead and mine a block:
$ ./regtest.sh mine 1
You should see your previous window with the monitor
command update:
2021-03-19T17:17:13Z LOOP_IN HTLC_PUBLISHED 0.005 BTC - P2WSH: bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f
2021-03-19T17:18:38Z LOOP_IN INVOICE_SETTLED 0.005 BTC - P2WSH: bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f (cost: server -499929, onchain 7650, offchain 0)
After mining yet another block, the process should complete:
$ ./regtest.sh mine 1
2021-03-19T17:17:13Z LOOP_IN HTLC_PUBLISHED 0.005 BTC - P2WSH: bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f
2021-03-19T17:18:38Z LOOP_IN INVOICE_SETTLED 0.005 BTC - P2WSH: bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f (cost: server -499929, onchain 7650, offchain 0)
2021-03-19T17:19:21Z LOOP_IN SUCCESS 0.005 BTC - P2WSH: bcrt1q4p0pead4tfepm683fff8fl8g3kpx8spjztuquu2sctfzed9rufls2z0g2f (cost: server 71, onchain 7650, offchain 0)
Using the Loop server in an existing setup
This docker-compose
is only meant as a demo and quick start help. You can of
course also integrate the Loop server Docker image into your existing regtest
environment.
Simply pull the image and run it by pointing it to an existing lnd
node:
$ docker pull lightninglabs/loopserver:latest
$ docker run -d \
-p 11009:11009 \
-v /some/dir/to/lnd:/root/.lnd \
lightninglabs/loopserver:latest \
daemon \
--maxamt=5000000 \
--lnd.host=some-lnd-node:10009 \
--lnd.macaroondir=/root/.lnd/data/chain/bitcoin/regtest \
--lnd.tlspath=/root/.lnd/tls.cert \
An existing Loop client (loopd
) can then be pointed to this server with:
$ loopd \
--network=regtest \
--debuglevel=debug \
--server.host=localhost:11009 \
--server.notls \
--lnd.host=some-other-lnd-node:10009 \
--lnd.macaroonpath=/root/.lnd/data/chain/bitcoin/regtest/admin.macaroon \
--lnd.tlspath=/root/.lnd/tls.cert
The --server.notls
is important here as the regtest
version of the Loop
server only supports insecure, non-TLS connections.
Also make sure you connect the Loop server and Loop client to a different lnd
node each since an lnd
node cannot pay itself. Obviously there also need to be
some channels with enough liquidity between the server's and client's lnd
nodes (direct or indirect doesn't matter).