Lightning Loop

Lightning Loop is a non-custodial service offered by Lightning Labs to bridge on-chain and off-chain Bitcoin using submarine swaps. This repository is home to the Loop client and depends on the Lightning Network daemon lnd. All of lnd’s supported chain backends are fully supported when using the Loop client: Neutrino, Bitcoin Core, and btcd.

In the current iteration of the Loop software, only off-chain to on-chain swaps are supported, where the Loop client sends funds off-chain in exchange for the funds back on-chain. This is called a Loop Out.

The service can be used in various situations:

• Acquiring inbound channel liquidity from arbitrary nodes on the Lightning network
• Depositing funds to a Bitcoin on-chain address without closing active channels
• Paying to on-chain fallback addresses in the case of insufficient route liquidity

Loop also allow offers an experimental testnet version of on-chain to off-chain swaps, called Loop In. This allows you to use on-chain funds to increase the local balance of a channel.

Potential uses for Loop In:

• Refilling depleted channels with funds from cold-wallets or exchange withdrawals
• Servicing off-chain Lightning withdrawals using on-chain payments, with no funds in channels required
• As a failsafe payment method that can be used when channel liquidity along a route is insufficient

Development and Support

The Loop client is current in an early beta state, and offers a simple command line application. Future APIs will be added to support implementation or use of the Loop service.

The GitHub issue tracker can be used to request specific improvements or register and get help with any problems. Community support is also available in the LND Slack .

Setup and Install

LND and the loop client are using Go modules. Make sure that the GO111MODULE env variable is set to on.

In order to execute a swap, You need to run lnd 0.6.0+, or master built with sub-servers enabled.

LND

If you are using a binary release of lnd that is 0.6 or higher, it is compatible with Lightning Loop. Otherwise, you will need to build from source.

If you are building from source make sure that your lnd is built with build tags chainrpc invoicesrpc signrpc walletrpc that enable additional lnd APIs.

To build lnd using these tags:

cd lnd
make install tags="signrpc walletrpc chainrpc invoicesrpc"

Loopd

After lnd is installed, you will need to either download a Loop binary release or clone the Lightning Loop repo and install the command line interface and swap client service.

To install from source:

git clone https://github.com/lightninglabs/loop.git
cd loop/cmd
go install ./...

Execute a Swap

After you have lnd and the Loop client installed, you can execute a Loop swap.

The Loop client needs its own short-lived daemon which will deal with the swaps in progress.

Command to start loopd::

loopd

// Or if you want to do everything in the same terminal and background loopd
loopd &

// For testnet mode, you'll need to specify the network as mainnet is the
default:
loopd --network=testnet

By default loopd attempts to connect to the lnd instance running on localhost:10009 and reads the macaroon and tls certificate from ~/.lnd. This can be altered using command line flags. See loopd --help.

loopd only listens on localhost and uses an unencrypted and unauthenticated connection.

Now that loopd is running, you can initiate a simple Loop Out. This will pay out Lightning off-chain funds and you will receive Bitcoin on-chain funds in return. There will be some chain and routing fees associated with this swap.

loop out <amt_in_satoshis>

This will take some time, as it requires an on-chain confirmation. When the swap is initiated successfully, loopd will see the process through.

To query in-flight swap statuses, run loop monitor.

Resume

When loopd is terminated (or killed) for whatever reason, it will pickup pending swaps after a restart.

Information about pending swaps is stored persistently in the swap database. Its location is ~/.loopd/<network>/loop.db.

Multiple Simultaneous Swaps

It is possible to execute multiple swaps simultaneously. Just keep loopd running.