High-level Design of Fiamma Bridge

Below is a high-level, preliminary design for Fiamma Bridge (the BitVM-based pragmatically trustless Bitcoin bridge). We offer customizable implementations for each partner.

What is a Trustless Bitcoin Bridge?

Our trustless Bitcoin bridge provides secure, permissionless transfers of BTC between Bitcoin and sidechains. It ensures:

1. Locked BTC Safety: User's BTC remains secure, without unilateral control by any entity.

2. Trustless PEG-IN: Bitcoin to sidechain transfers are fully permissionless.

3. Trustless PEG-OUT: Sidechain to Bitcoin transfers maintain the same security and trustlessness.

How Do We Secure Locked BTC?

• Traditional Approach: A committee controls your BTC, meaning they could spend it without your consent.

• Our Solution: BTC is co-controlled by the user and the committee, requiring both signatures, powered by pre-signed transactions with BitVM2 functionality. This setup prevents the committee from spending BTC without user authorization.

PEG-IN Process (Bitcoin to Sidechain)

To receive mamaBTC (tokenized BTC via Fiamma bridge) on the sidechain, our system verifies transactions through a Bitcoin light client to ensure validity, preventing issues like:

1. Incorrect Minting: The Mint contract checks the validity of transactions on Bitcoin, ensuring that only authentic BTC transactions allow minting on the sidechain.

2. Relayer Issues: Users can directly submit valid data for minting if relayers are unavailable. Security is maintained by a slashing mechanism, with decentralized or permissionless relayers depending on the chain.

PEG-OUT Process (Sidechain to Bitcoin)

1. General Mode: Users initiate BTC transfers back to Bitcoin. The system verifies transactions for legitimacy, preventing fraudulent claims by operators through challenge periods with zero-knowledge proof (ZKP) verifications.

2. Forced Exit Mode: If the bridge or operator is down, users can withdraw BTC directly, with protections in place to penalize invalid claims.

Key Features and Security Levels

• Locked BTC: Secured with multisignature authorization.

• PEG-IN: Trust-minimized with light client verification, ensuring permissionless operations.

• PEG-OUT: Fully trustless and permissionless, with user-centric protections in place.

Efficiency and Future Enhancements

• To reduce transaction times, our ZKP verification layer ensures prompt and final verification, aiming to reduce the current 7-day challenge period to a few hours.

• We are also working to support variable BTC amounts with a new liquidity provider design to increase bridge flexibility.

• ...