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HIP-XXXX : Update Chains

Number:  HIP-XXXX
Title:   Update Chains
Type:    Informational
Status:  Draft
Authors: Matthew Zipkin <@pinheadmz>
Created: 2023-07-16

Abstract

This document introduces an abstract mechanism that can be used as an element of Layer 2 protocols, applications, and soft forks on the Handshake blockchain. We take advantage of the covenant system and in particular the UPDATE covenant, which enables a HNS name owner to commit up to 512 bytes of entirely arbitrary data at the maximum rate of once per block. Since names are always owned by a single transaction output, a series of UPDATE covenants for a name can used like a linear message channel or, in a sense, a miniature independent blockchain controlled by one Handshake name.

Background

Covenants

Several of the HNS covenants require an output's address to be identical to the address in the output being spent. In the example below, Addr 1 and Addr 2 lose an auction, and Addr 3 is the winner. After confirming the REGISTER covenant, that name owner can now start confirming a chain of UPDATE covenants, each spending the one and only previous output that owned the name.

       ┌────┐    ┌──────┐    ┌──────┐                                      
Addr 1 │BID │───▶│REVEAL│───▶│REDEEM│                                      
       └────┘    └──────┘    └──────┘                                      
       ┌────┐    ┌──────┐    ┌──────┐                                      
Addr 2 │BID │───▶│REVEAL│───▶│REDEEM│                                      
       └────┘    └──────┘    └──────┘                                      
       ┌────┐    ┌──────┐    ┌────────┐    ┌──────┐    ┌──────┐    ┌──────┐
Addr 3 │BID │───▶│REVEAL│───▶│REGISTER│───▶│UPDATE│───▶│UPDATE│───▶│UPDATE│
       └────┘    └──────┘    └────────┘    └──────┘    └──────┘    └──────┘

Namestate Data

The UPDATE covenant is allowed to commit to 512 bytes of data which will eventually get committed to the HNS Urkel Tree and proven to light clients. This data field currently has absolutely no consensus rules applied to it.

In the application layer, the first byte of this data is referred to as a version and so far only version 0 has been defined: this is the HNS root zone record set. Any data is still allowed after a version 0 byte, but if it is not formatted correctly, the HNS root name server will simply ignore it.

New Namestate Data Versions

Anyone can propose a new standard data format and collaborate with the community to agree on a version number for that standard (we recommend writing a HIP). Layer 2 applications can process this data in a special way. Smart contracts, more complex scripting systems, compiled bytecode can all be used as Namestate Data. They may contain complex proofs like Bitcoin SPV merkle proofs to link HNS names with BTC transactions.

Example: TLD Token

Version: 0xfe

Data: A series of tuples (uint32, uint32) indicating account numbers and their balance of the token.

Update Chain: Commits to latest state of all account balances

Extending Consensus Rules (soft forks)

Handshake full nodes verify every input and every output of every transaction in every block. The UTXO script system is essentially copied from Bitcoin, but there are extra consensus rules applied just to covenants. These rules always require fully validating nodes to retrieve the current Namestate for a name before determining whether or not the queued transaction is valid.

This means that without any additional disk or memory requirements, new consensus rules can be applied to Update Chains by burdening data in UPDATE covenants with new rules.

Example: TLD Token

New protocol rules:

  1. The total sum of all "balance" fields in the covenant being evaluated MUST ALWAYS equal the sum of all "balance" fields in the existing Namestate data.

  2. If the existing Namestate data is version 0xfe then the version of the covenant data being evaluated MUST ALSO be 0xfe

These rules make our example token chain a bit more reasonable. Tokens can not be created or destroyed once the chain is first created. The name owner must commit to the Update Chain forever and can not revert to data version 0 with a future UPDATE covenant, which would break the Update Chain.

Light Clients

The secure light client is an essential component of the Handshake ecosystem, and any protocol extension should consider maintaining that compatibility. Since the Urkel tree is updated periodically, the state of every Update Chain will be verifiable by light clients after each tree commitment interval.

For some applications, the latest state may not be enough data to synchronize the Update Chain state. Luckily, BIP37 has been expanded in Handshake to include name hashes. This means that even an SPV node can get Merkle proofs of every UDPATE transaction for a name, and may then be able to compute the state of the system.

Normally this process would require a Bloom Filter upload and full chain rescan. However, the data in an Update Chain can provide "hints". For example, part of the data in each UPDATE can include the block hash of the previous UPDATE. A light client can recursively request the full blocks indicated by these hints and reconstruct the Update Chain using only the relevant blocks. This scheme is similar to Neutrino wallets for Bitcoin which take advantage of BIP157 and BIP158.

Access Modes

In combination with a chain of special-purpose data blobs, an Update Chain can employ special types of output scripts to expand the use cases.

Private

The name owner uses a standard pubKeyHash address and retains unilateral control over the Update Chain. This may support applications proprietary to the name itself, or be used as a trusted oracle.

Public

The name owner transfers the name to an address locked by the following redeem script "anyone can UPDATE or RENEW":

OP_TYPE
0x07 // UPDATE
OP_EQUAL
OP_IF
  OP_TRUE
OP_ELSE
  OP_TYPE
  0x08 // RENEW
  OP_EQUAL
OP_ENDIF

An Update Chain locked by this redeem script becomes a sort of public channel. Anyone can UPDATE the data in the Namestate. Without a soft fork to enforce extra consensus rules on that data this mode may be quite chaotic, but it could be used a sort of communication channel that any HNS user can access.

Pay-to-Update

The name owner transfers the name to an address locked by the following redeem script "Key A can ONLY UPDATE, key B can do anything else":

OP_TYPE
0x07 // UPDATE
OP_EQUAL
OP_IF
  <Key A>
  OP_CHECKSIG
OP_ELSE
  <Key B>
  OP_CHECKSIG
OP_ENDIF

The name owner creates, partially signs with Key A, and publishes (off chain) the following transaction:

vin:
  0: Key A signature with SIGHASH NO_INPUT | ANYONE_CAN_PAY | SINGLE_REVERSE
vout:
  0: (null)
  1: payment to name owner

Note that SIGHASH NO_INPUT means this same partially-signed transaction can be used and re-used repeatedly as long as the name remains owned by the same address. A more advanced script can also disable TRANSFER to ensure that this is always the case for some applications.

The name owner uses two keys in the redeem script so that they can pre-sign the spending of ANY output that owns the name but we must ensure that an attacker can't take advantage of this pre-sign to transfer the name to themselves!

Any user who wishes to pay the name owner to UPDATE their chain completes the transaction as follows:

vin:
  0: Key A signature with SIGHASH NO_INPUT | ANYONE_CAN_PAY | SINGLE_REVERSE
  1: User's funds
vout:
  0: User's UPDATE covenant with 512 byte payload
  1: User's change output
  2: payment to name owner

With this mechanism, a name owner can set a price which must be paid by any and every user that wants to commit a message to the Update Chain.

In a variation of this mode, the name owner does NOT use SIGHASH NO_INPUT and instead creates a pre-sign UPDATE only when requested by a user, with an agreed-upon price and owner-approved UPDATE data.