That is the fourth article in a series deep diving into particular person covenant proposals which have reached some extent of maturity meriting an in-depth breakdown.
OP_VAULT, put ahead by James O’Beirne in BIP 345 (with Greg Sanders added later as a co-author), is a covenant designed to implement vaults. It relies upon moreover on CTV (or TXHASH or different related opcodes) to finish the development of a vault.
Earlier than moving into how the proposal itself works, let’s take a look at what a vault is attempting to perform.
The aim of a vault is to enhance the safety of your bitcoin storage. That is completed by the introduction of a delay interval throughout any try and spend from the vault. Slightly than having the ability to straight ship your bitcoin from the vault, the vault restricts them in order that they’ll solely be despatched to a “center floor” deal with. Whereas cash being withdrawn from the vault are on this center floor state, they are often spent at any time right into a deep chilly storage pockets beneath your management (ideally a geographically distributed vault multisig), and solely to that deep chilly storage. After a pre-defined timelock the cash can then be spent onwards to the final word meant vacation spot.
That is one thing that’s attainable to do at the moment with pre-signed transactions, however that brings a big diploma of complexity, inefficiency, lack of flexibility, and danger of dropping funds.
Utilizing pre-signed transactions requires you to resolve forward of time how a lot cash shall be withdrawn at a time, what feerate the transactions withdrawing from the vault pays, what the interim deal with earlier than absolutely withdrawing is, and then you definately have to securely delete the personal keys used to pre-sign all these transactions.
A giant drawback with this structure, other than the general restrictions of pre-decided quantities, charges, and many others., is that deal with reuse is just not protected. In a pre-signed transaction vault scheme, deposits are despatched to the deal with used to pre-sign the preliminary vault transaction, and that together with all the opposite keys concerned are deleted after signing the vault transactions. Deal with reuse is dangerous apply, however you can’t cease another person from sending funds to an deal with they’ve used earlier than. Any such later deposited funds could be eternally misplaced, because the vault keys have all been deleted.
As nicely, each deposit right into a vault necessitates a recent arrange of latest keys, conducting the pre-signing ceremony once more for the brand new set of transactions, guaranteeing the brand new set of keys are securely deleted, and managing the correct storage of all this info together with redundant backups. Each single deposit creates a possibility for one thing to get tousled throughout the vault arrange, each deposit gives an opportunity for somebody who has compromised a system or machine for the reason that final deposit to attempt to steal your funds.
Pre-signed transaction vaults are a cumbersome and complex building, and current sufficient complexity that every use does current a non-negligible danger of messing up in a approach that leads to misplaced funds.
Enhancements could be made with CTV, akin to casting off the necessity to securely delete keys, however the remainder of the complexity and danger nonetheless stays. Quantities and costs should nonetheless be pre-defined. Deal with reuse can nonetheless result in fund loss.
How OP_VAULT Works
OP_VAULT is constructed on Taproot, that means the complete design makes use of tapscript and is determined by the existence of taptrees and the script spending path. It additionally is determined by the usage of CTV (or TXHASH/related performance) to assemble a full vault.
The proposal is definitely two opcodes, OP_VAULT, and OP_VAULT_RECOVER. OP_VAULT is used to set off withdrawals from the vault, and OP_VAULT_RECOVER is used to comb triggered withdrawals into the deep restoration pockets. The thought is to assemble a taptree that has OP_VAULT paths in it for withdrawals, and UP_VAULT_RECOVER paths for sweeping any funds mid-withdrawal to a safe chilly pockets. This taptree is your vault.
OP_VAULT works by proscribing how the outputs of a transaction spending an OP_VAULT encumbered coin should look. The opcode expects within the witness:
- A tapleaf script physique
- The variety of knowledge items for a script replace
- An output index for the withdrawal
- An output index for any funds going again into the vault
- An quantity of satoshis going again into the vault
OP_VAULT ensures that the correct quantity of funds despatched again to the vault is appropriate, and that the output script of that output is equivalent to the taptree being spent from. It additionally takes the tapleaf script physique, and the information variables offered, and combines them right into a full tapleaf script. It then ensures that the output specified for withdrawal has an equivalent script with the taptree of the enter being spent, besides the tapleaf being spent from is changed with the tapleaf script put along with knowledge from the witness.
This final trick is feasible as a result of with the intention to confirm the tapleaf is a part of the taptree within the first place the inside nodes of the merkle tree should be current to confirm. Hashing the brand new script with the recognized inside leaves of the remainder of the tree ensures that solely that leaf of the tree was modified. The template for the script that dynamically be stuffed in is outlined on the time of vault creation. For a typical vault use-case the script template would merely be a timelocked CTV spend path with the hash offered when triggering a withdrawal.
OP_VAULT_RECOVER is way easier. It takes a hash of the restoration script, and an output index for the restoration transaction. That output should include a script that precisely matches the predefined hash, and everything of the quantity of funds within the enter being recovered should go to that output.
Each of those scripts could be “gated” with an authorization script, i.e. offering a signature from a particular key with the intention to set off a withdrawal or provoke a restoration. This has some commerce offs. Should you lose a restoration authorization key, you possibly can not set off a restoration transaction within the occasion of a theft of your withdrawal set off key. It does nevertheless, let you provoke a restoration from a number of vault UTXOs in the identical transaction as a result of specifying every enter’s corresponding outputs manually.
What Is OP_VAULT Good For
Clearly vaults. OP_VAULT cleanly addresses all the main limitations of a pre-signed transaction or CTV based mostly vault. No restrictive pre-decided denominations or pre-decided charges, no hazard in reusing addresses, and no necessity to take care of a excessive safety subject like key deletion each single time you deposit.
It’s much more versatile than simply vaults although. That was the meant use case when it was designed, however it’s a rather more basic covenant guaranteeing {that a} taptree truly carries ahead to the following UTXO if you need it to, with pre-defined exit situations which have a point of flexibility.
You may make one thing very near a Drivechain with OP_VAULT. Create a vault template that has an extremely lengthy timelock, on the order of 3-6 months (much like Drivechain withdrawals). Haven’t any authorization gate for any script and make the template public. Folks can now merely deposit funds into the “drivechain” by sending cash to that vault script. Anybody can suggest a withdrawal by merely spending from an OP_VAULT path and together with a CTV hash of their withdrawal transaction. Miners can implement this by merely refusing to mine any invalid withdrawal transactions, and if a malicious miner ever mined a malicious withdrawal set off, the following sincere miner may merely revault the funds.
That’s what could be accomplished simply utilizing an equivalent script template as beneficial within the BIP. The script template set for withdrawals is bigoted, and as such is doubtlessly very basic by way of what varieties of perpetuating self contracts OP_VAULT may allow.
Closing Ideas
OP_VAULT clearly accomplishes the objective of enabling correct vaults that don’t include the restrictions, complexities, and danger that pre-signed transaction vaults (and even easier covenant vaults with one thing like CTV) include. Nevertheless, in doing so it wound up introducing a fairly broad and generalized set of functionalities to perform that authentic objective.
The proposal would definitively allow a comparatively easy and safe vault performance, but it surely additionally opens up many different doorways. Drivechains are one thing that include a large degree of risk centered round Miner Extractible Worth (MEV). The downsides of enabling such performance, and the motivation points and penalties it may have, ought to be weighed in opposition to the upside of enabling a nicely constructed vault.
OP_VAULT is a comparatively mature proposal, however the diploma of performance that it allows shouldn’t be approached evenly.
