BxTB: cross-chain exchanges of bitcoins for all Bitcoin wrapped tokens

University of Turin, Italy Corresponding Author

Abstract: While it is possible to exchange tokens whose smart contracts are on the same blockchain, cross-exchanging bitcoins for a Bitcoin wrapped token is still cumbersome. In particular, current methods of exchange are still custodial and perform privacy-threatening controls on the users in order to operate. To solve this problem we present BxTB: cross-chain exchanges of bitcoins for any Bitcoin wrapped tokens. BxTB lets users achieve that by bypassing the mint-and-burn paradigm of current wrapped tokens and cross-exchanging already minted tokens in a P2P way. Instead of relaying on HTLCs and the overhead of communication and slowness due to time-locks, we leverage Stateless SPVs, i.e. proof-of-inclusion of transactions in the Bitcoin chain validated through a smart contract deployed on the other blockchain. Furthermore, since this primitive has not been introduced in the academic literature yet, we formally introduce it and we prove its security.
If you find this work useful, please consider citing it:

@inproceedeings{9922019,
  author={Barbàra, Fadi and Schifanella, Claudio},
  booktitle={2022 Fourth International Conference on Blockchain Computing and Applications (BCCA)}, 
  title={BxTB: cross-chain exchanges of bitcoins for all Bitcoin wrapped tokens}, 
  year={2022},
  doi={10.1109/BCCA55292.2022.9922019}}
        

Phases of the BxTB protocol
Diagram of the BxTB protocol

Light-client implementation of the stateless SPV

Light-client implementation of the stateless SPV in the smart contract

BxTB stateless SPV is secure

It is economically secure to validate a transaction with no stored block header but only with the stateless SPV