Swap-in-Potentiam (SIP) is a protocol that facilitates the immediate transfer of confirmed on-chain Bitcoin to the Lightning Network. It reduces trust requirements compared to other instant channel opening methods like 0-conf channels by temporarily committing to co-ownership with a Lightning Service Provider (LSP) and delaying unilateral access per a timeout.

Swap-in potentiam (SIP) differs from typical HTLC-based swaps by allowing for a pre-commital stage. This allows for; reusable swap addresses, immediate transfers to lightning, and reduced trust requirements compared to 0-conf channels.

In this scheme, the reusable swap address is a contract between Alice and Bob that allows for two spend paths; Alice and Bob cosign, or Alice can spend unilaterally after a timeout.

Once the swap address is funded and confirmed, Alice can choose one of the following options; swap the funds into a new or existing lightning network channel with the help of Bob, or send the funds to a new onchain address with the help of Bob. Alice also has the third option of waiting for the recovery timeout if Bob is offline or uncooperative.

SIP is primarily geared towards mobile users who may go offline for extended periods, and a variation called swaproot has been implemented in Phoenix wallet.

Primary code and documentation

Optech newsletter and website mentions

2023

See also

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