So, on March 26, SuperTestnet rolled out a new protocol for two-party payment channels called HedgeHog. The developer claims that HedgeHog channels are kinda like lightning channels but with some cool advantages.
Here’s my take on it based on the sources linked above. If I’ve got it wrong, feel free to set me straight.
The major distinction between HedgeHog and Lightning is that it swaps out pre-signed transactions for transactions that can be revoked using connectors. With HedgeHog, you can do offline money transfers leveraging connector outputs. The transaction's validity hinges on the presence of a UTXO, which serves as an input for that transaction.
In HedgeHog channels, you can form pools of coins by sharing portions of the channel among pool members on a federated basis:
- As long as at least one key holder in the pool plays fair, users' funds are safe from theft.
- You don’t need on-chain transactions to add someone to the pool.
- Transfers of money within the pool are commission-free.
- Users can create off-chain vouchers that anyone can use, even those who aren’t part of the pool. These vouchers can be shared in whatever way is easiest (email, printed out, etc.). Receiving satoshis through a voucher doesn’t require the recipient to have incoming liquidity because the voucher effectively hands over a share in the collective channel, and the liquidity remains intact during those voucher transactions.
The pool itself uses a multisig n-of-n setup. But there’s a downside: all keyholders need to be online for the pool to work properly. So, in case of...
HedgeHog: a fresh protocol for payment channels with embedded federations
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