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Bitcoin Optech Newsletter #346
/en/newsletters/2025/03/21/
2025-03-21-newsletter
2025-03-21-newsletter
newsletter
newsletter
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This week's newsletter summarizes a discussion about LND's updated dynamic feerate adjustment system. Also included are our regular sections describing recent changes to services and client software, announcing new releases and release candidates, and summarizing recent merges to popular Bitcoin infrastructure software.

News

  • Discussion of LND's dynamic feerate adjustment system: Matt Morehouse [posted][morehouse sweep] to Delving Bitcoin a description of LND's recently-rewritten sweeper system, which determines the feerates to use for onchain transactions (including [RBF][topic rbf] fee bumps). He begins with a brief description of the safety critical aspects of fee management for an LN node, as well as the natural desire to avoid overpaying. He then describes the two general strategies used by LND:

    • Querying external feerate estimators, such as a local Bitcoin Core node or a third party. This is mainly used for choosing initial feerates and fee bumping non-urgent transactions.

    • Exponential fee bumping, used when a deadline is approaching to ensure that problems with a node's mempool or its [fee estimation][topic fee estimation] don't prevent timely confirmation. For example, Eclair uses exponential fee bumping when deadlines are within six blocks.

    Morehouse then describes how these two strategies are combined in LND's new sweeper system: "[HTLC][topic htlc] claims with matching deadlines [are aggregated] into a single [batched transaction][topic payment batching]. The budget for the batched transaction is calculated as the sum of the budgets for the individual HTLCs in the transaction. Based on the transaction budget and deadline, a fee function is computed that determines how much of the budget is spent as the deadline approaches. By default, a linear fee function is used, which starts at a low fee (determined by the minimum relay fee rate or an external estimator) and ends with the total budget being allocated to fees when the deadline is one block away."

    He additionally describes how the new logic helps protect against [replacement cycling][topic replacement cycling] attacks, concluding: "with LND’s default parameters an attacker must generally spend at least 20x the value of the HTLC to successfully carry out a replacement cycling attack." He adds that the new system also improves LND's defense against [pinning attacks][topic transaction pinning].

    He concludes with a link-filled summary of several "LND-specific bug and vulnerability fixes" made through the improved logic. Abubakar Sadiq Ismail [replied][ismail sweep] with some suggestions for how all LN implementations (in addition to other software) can more effectively use Bitcoin Core's fee estimation. Several other developers also commented, adding both nuance to the description and praise for the new approach.

Changes to services and client software

In this monthly feature, we highlight interesting updates to Bitcoin wallets and services.

  • Wally 1.4.0 released: The [libwally-core 1.4.0 release][wally 1.4.0] adds [taproot][topic taproot] support, support for deriving [BIP85][] RSA keys, as well as additional [PSBT][topic psbt] and [descriptor][topic descriptors] features.

  • Bitcoin Core Config Generator announced: The [Bitcoin Core Config Generator][bccg github] project is a terminal interface for creating Bitcoin Core bitcoin.conf configuration files.

  • A regtest development environment container: The [regtest-in-a-pod][riap github] repository provides a [Podman][podman website] container configured with Bitcoin Core, Electrum, and Esplora, as outlined in the [Using Podman Containers for Regtest Bitcoin Development][podman bitcoin blog] blog post.

  • Explora transaction visualization tool: [Explora][explora github] is a web-based explorer for visualizing and navigating between transaction inputs and outputs.

  • Hashpool v0.1 tagged: [Hashpool][hashpool github] is a [mining pool][topic pooled mining] based on the [Stratum v2 reference implementation][news247 sri] where mining shares are represented as [ecash][topic ecash] tokens (see [Podcast #337][pod337 hashpool]).

  • DMND launching pooled mining: [DMND][dmnd website] is launching Stratum v2 pooled mining, building on their previous solo mining [announcement][news281 demand].

  • Krux adds taproot and miniscript: [Krux][news273 krux] adds [miniscript][topic miniscript] and taproot support, leveraging the [embit][embit website] library.

  • Source-available secure element announced: The [TROPIC01][tropic01 website] is a secure element built on RISC-V with an [open architecture][tropicsquare github] for auditability.

  • Nunchuk launches Group Wallet: [Group Wallet][nunchuk blog] supports [multisignature][topic multisignature] signing, taproot, coin control, [Musig2][topic musig], and secure communication between participants by repurposing the output descriptors in the [BIP129][] Bitcoin Secure Multisig Setup (BSMS) file.

  • FROSTR protocol announced: [FROSTR][frostr github] uses the FROST [threshold signature scheme][topic threshold signature] to achieve k-of-n signing and key management for nostr.

  • Bark launches on signet: The [Bark][new325 bark] implementation of [Ark][topic ark] is now [available][second blog] on [signet][topic signet] with a faucet and demo store for testing.

  • Cove Bitcoin wallet announced: [Cove Wallet][cove wallet github] is an open source Bitcoin mobile wallet based on BDK that supports technologies like PSBTs, [wallet labels][topic wallet labels], hardware signing devices, and more.

Releases and release candidates

New releases and release candidates for popular Bitcoin infrastructure projects. Please consider upgrading to new releases or helping to test release candidates.

  • [Bitcoin Core 29.0rc2][] is a release candidate for the next major version of the network's predominate full node.

Notable code and documentation changes

Notable recent changes in [Bitcoin Core][bitcoin core repo], [Core Lightning][core lightning repo], [Eclair][eclair repo], [LDK][ldk repo], [LND][lnd repo], [libsecp256k1][libsecp256k1 repo], [Hardware Wallet Interface (HWI)][hwi repo], [Rust Bitcoin][rust bitcoin repo], [BTCPay Server][btcpay server repo], [BDK][bdk repo], [Bitcoin Improvement Proposals (BIPs)][bips repo], [Lightning BOLTs][bolts repo], [Lightning BLIPs][blips repo], [Bitcoin Inquisition][bitcoin inquisition repo], and [BINANAs][binana repo].

  • [Bitcoin Core #31649][] removes all checkpoint logic, which is no longer necessary following the headers presync step implemented years ago (see Newsletter [#216][news216 presync]) that enables a node during Initial Block Download (IBD) to determine if a chain of headers is valid by comparing its total proof of work (PoW) to a predefined threshold nMinimumChainWork. Only chains with a total proof of work exceeding this value are considered valid and stored, effectively preventing memory DoS attacks from low-work headers. This eliminates the need for checkpoints, which were often seen as a centralized element.

  • [Bitcoin Core #31283][] introduces a new waitNext() method to the BlockTemplate interface, which will only return a new template if the chain tip changes or the mempool fees increase above the MAX_MONEY threshold. Previously, miners would receive a new template with every request, resulting in unnecessary template generation. This change aligns with the [Stratum V2][topic pooled mining] protocol specification.

  • [Eclair #3037][] enhances the listoffers command (See Newsletter [#345][news345 offers]) to return all relevant [offer][topic offers] data, including the createdAt and disabledAt timestamps, instead of just raw Type-Length-Value (TLV) data. In addition, this PR fixes a bug that caused the node to crash when attempting to register the same offer twice.

  • [LND #9546][] adds an ip_range flag to the lncli constrainmacaroon (see Newsletter [#201][news201 constrain]) subcommand, allowing users to restrict access to a resource to a specific IP range when using a macaroon (authentication token). Previously, macaroons could only allow or deny access based on specific IP addresses, not ranges.

  • [LND #9458][] introduces restricted access slots for certain peers, configurable via the --num-restricted-slots flag, to manage initial access permissions on the server. Peers are assigned access levels based on their channel history: those with a confirmed channel receive protected access, those with an unconfirmed channel receive temporary access, and all others are given restricted access.

  • [BTCPay Server #6581][] adds [RBF][topic rbf] support, enabling fee bumping for transactions that have no descendants, where all inputs are from the store’s wallet, and which include one of the store’s change addresses. Users can now choose between [CPFP][topic cpfp] and RBF when choosing to fee bump a transaction. Fee bumping requires NBXplorer version 2.5.22 or higher.

  • [BDK #1839][] adds support for detecting and handling canceled (double-spent) transactions by introducing a new TxUpdate::evicted_ats field, which updates the last_evicted timestamps in TxGraph. Transactions are considered evicted if their last_evicted timestamp exceeds their last_seen timestamp. The canonicalization algorithm (see Newsletter [#335][news335 algorithm]) is updated to ignore evicted transactions except when a canonical descendant exists due to rules of transitivity.

  • [BOLTs #1233][] updates a node’s behavior to never fail an [HTLC][topic htlc] upstream if the node knows the preimage, ensuring that the HTLC can be properly settled. Previously, the recommendation was to fail an outstanding HTLC upstream if it was missing from a confirmed commitment, even if the preimage was known. A bug in LND versions before 0.18 caused nodes under DoS attack to fail HTLCs upstream after a restart, despite knowing the preimage, resulting in the loss of the HTLC’s value (see Newsletter [#344][news344 lnd]).

{% include snippets/recap-ad.md when="2025-03-25 15:30" %} {% include references.md %} {% include linkers/issues.md v=2 issues="31649,31283,3037,9546,9458,6581,1839,1233" %} [bitcoin core 29.0rc2]: https://bitcoincore.org/bin/bitcoin-core-29.0/ [morehouse sweep]: https://delvingbitcoin.org/t/lnds-deadline-aware-budget-sweeper/1512 [ismail sweep]: https://delvingbitcoin.org/t/lnds-deadline-aware-budget-sweeper/1512/3 [news216 presync]: /en/newsletters/2022/09/07/#bitcoin-core-25717 [news345 offers]: /en/newsletters/2025/03/14/#eclair-2976 [news201 constrain]: /en/newsletters/2022/05/25/#lnd-6529 [news344 lnd]: /en/newsletters/2025/03/07/#disclosure-of-fixed-lnd-vulnerability-allowing-theft [news335 algorithm]: /en/newsletters/2025/01/03/#bdk-1670 [wally 1.4.0]: https://github.com/ElementsProject/libwally-core/releases/tag/release_1.4.0 [bccg github]: https://github.com/jurraca/core-config-tui [riap github]: https://github.com/thunderbiscuit/regtest-in-a-pod [podman website]: https://podman.io/ [podman bitcoin blog]: https://thunderbiscuit.com/posts/podman-bitcoin/ [explora github]: https://github.com/lontivero/explora [hashpool github]: https://github.com/vnprc/hashpool [news247 sri]: /en/newsletters/2023/04/19/#stratum-v2-reference-implementation-update-announced [pod337 hashpool]: /en/podcast/2025/01/21/#continued-discussion-about-rewarding-pool-miners-with-tradeable-ecash-shares-transcript [news281 demand]: /en/newsletters/2023/12/13/#stratum-v2-mining-pool-launches [dmnd website]: https://www.dmnd.work/ [embit website]: https://embit.rocks/ [news273 krux]: /en/newsletters/2023/10/18/#krux-signing-device-firmware [tropic01 website]: https://tropicsquare.com/tropic01 [tropicsquare github]: https://github.com/tropicsquare [nunchuk blog]: https://nunchuk.io/blog/group-wallet [frostr github]: https://github.com/FROSTR-ORG [new325 bark]: /en/newsletters/2024/10/18/#bark-ark-implementation-announced [second blog]: https://blog.second.tech/try-ark-on-signet/ [cove wallet github]: https://github.com/bitcoinppl/cove