Bitcoin Channel

Introduction

Bitcoin Channels are a BTC-native trading solution on DotSwap that enable faster and more cost-effective swaps of Bitcoin assets like Runes. By using Bitcoin Channels, you can perform multiple swaps without waiting for each transaction to confirm on the Bitcoin blockchain, significantly improving your trading experience. Bitcoin Channels also ensure you retain control over your assets through Bitcoin-native features like multi-sig and HTLC.

What are Bitcoin Channels?

Bitcoin Channels provide a way to "commit" your assets for secure and faster trades.

• Simplified Explanation:

  • Think of it like a faster trading account within DotSwap. You "Commit" your BTC or Runes to this channel, and then you can use those assets to make multiple trades instantly.

  • Multi-Signature Addresses: Your committed assets are secured in a special multi-signature address. This means that both you and DotSwap must authorize together any movement of those funds, ensuring your continued control.

  • HTLCs (Hashed TimeLock Contracts): HTLCs are a crucial part of Bitcoin Channels. They act as a safety net, guaranteeing that you can "Reclaim" your funds even if DotSwap services are temporarily unavailable.

Benefits of Using Bitcoin Channels

• Faster Trades:

  • Bitcoin Channels enable near-instantaneous swaps. You no longer have to wait for the typical 10-minute (or longer) Bitcoin block confirmation times for each trade. This significantly speeds up trading, especially for active users.

• Secure & Controlled:

  • Multi-Signature Security: Your BTC and Runes are secured using multi-signature addresses, which require both your authorization and DotSwap's. This ensures that DotSwap cannot access or move your funds without your permission.

  • HTLCs for Reclaim: HTLCs provide a mechanism for you to reclaim your committed assets. Even if DotSwap becomes temporarily unavailable, you can still retrieve your funds after a set period (14 days).

Quick Guide:

• Commit Assets: Deposit BTC or Runes into your Bitcoin Channel.

• Use for Swaps: Trade using the funds in your Bitcoin Channel.

• Monitor Balance: Check your available and committed funds within the channel.

• Reclaim Assets: Withdraw your funds from the Bitcoin Channel back to your wallet.

• Supported Wallets:

  • Bitcoin Channels currently support the following wallets:

    • Unisat Wallet

    • OKX Wallet

    • Xverse Wallet

• Limitations:

  • Channel Capacity: There might be a maximum limit on the amount of BTC or Runes you can commit to a Bitcoin Channel.

  • Asset Support: Currently, Bitcoin Channels support BTC and Runes. Support for other assets may be added in the future.

  • Reclaim Time: Reclaiming funds from a Bitcoin Channel takes 14 days due to the HTLC mechanism.

Troubleshooting & FAQs

• Common Issues:

  • Delays in Committing/Reclaiming: Bitcoin network congestion can sometimes cause delays. Please be patient and check the network status.

  • Transaction Errors: Ensure you have sufficient funds in your wallet to cover network fees.

• FAQs:

  • What happens if DotSwap goes offline?

    • You can still reclaim your funds after a 14-day waiting period using the HTLC mechanism.

  • How long does it take to reclaim my funds?

    • Reclaiming funds from a Bitcoin Channel takes 14 days due to the HTLC time lock.

  • Are there any fees associated with using Bitcoin Channels?

    • There are no specific fees for using the Bitcoin Channel itself, but you will still need to pay Bitcoin network fees for committing and reclaiming assets.