Rapido: A Layer2 Payment System for Decentralized Currencies

TL;DR

Rapido introduces a new Layer2 payment system for decentralized currencies that addresses specific issues in existing solutions like Lightning Network, improving transaction efficiency and applicability through a novel smart contract and protocol.

Contribution

The paper presents Rapido, a novel Layer2 payment system with a new smart contract D-HTLC, specifically designed to solve the shares issue and improve transaction performance over existing solutions.

Findings

Rapido mitigates the shares issue in Layer2 payments.

Rapido reduces skewness in transaction processing.

Simulation shows Rapido outperforms Lightning Network in key metrics.

Abstract

Bitcoin blockchain faces the bitcoin scalability problem, for which bitcoin's blocks contain the transactions on the bitcoin network. The on-chain transaction processing capacity of the bitcoin network is limited by the average block creation time of 10 minutes and the block size limit. These jointly constrain the network's throughput. The transaction processing capacity maximum is estimated between 3.3 and 7 transactions per second (TPS). A Layer2 Network, named Lightning Network, is proposed and activated solutions to address this problem. LN operates on top of the bitcoin network as a cache to allow payments to be affected that are not immediately put on the blockchain. However, it also brings some drawbacks. In this paper, we observe a specific payment issue among current LN, which requires additional claims to blockchain and is time-consuming. We call the issue as shares issue. Therefore, we propose Rapido to explicitly address the shares issue. Furthermore, a new smart contract, D-HTLC, is equipped with Rapido as the payment protocol. We finally provide a proof of concept implementation and simulation for both Rapido and LN, in which Rapdio not only mitigates the shares issue but also mitigates the skewness issue thus is proved to be more applicable for various transactions than LN.