Snappy: Fast On-chain Payments with Practical Collaterals

Thu 05Mar2020

Vasilios Mavroudis, University College London

From 12.00 until 13.30

At CNB/F/110 (Lunch) + CAB/F/100.9 (Seminar), ETH Zurich

Universitätstrasse 6, 8092 Zurich


Permissionless blockchains offer many advantages
but also have significant limitations including high latency. This
prevents their use in important scenarios such as retail payments,
where merchants should approve payments fast. Prior works have
attempted to mitigate this problem by moving transactions off the
chain. However, such Layer-2 solutions have their own problems:
payment channels require a separate deposit towards each
merchant and thus significant locked-in funds from customers;
payment hubs require very large operator deposits that depend
on the number of customers; and side-chains require trusted

We propose Snappy, a novel solution that enables
recipients, like merchants, to safely accept fast payments. In
Snappy, all payments are on the chain, while small customer
collaterals and moderate merchant collaterals act as payment
guarantees. Besides receiving payments, merchants also act
as statekeepers who collectively track and approve incoming
payments using majority voting. In case of a double-spending
attack, the victim merchant can recover lost funds either from the
collateral of the malicious customer or a colluding statekeeper
(merchant). Snappy overcomes the main problems of previous
solutions: a single customer collateral can be used to shop with
many merchants; merchant collaterals are independent of the
number of customers; and validators do not have to be trusted.
Our Ethereum prototype shows that safe, fast (<2 seconds) and
cheap payments are possible on existing blockchains.

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