Hi Bitcoin Developers,
I have written a BIP that describes the process to swap inscriptions however
there can be other use cases for it as well:
https://gist.github.com/1440000bytes/a7deeb3f1740bc533a61fbcc1fe58d77
Feel free to share your opinion or feedback to improve the usage of PSBTs in
swaps.
BIP: 2023-ordswap
Layer: Applications
Title: Trust minimized swaps using PSBTs
Author: /dev/fd0
Status: Draft
Created: 2023-03-02
License: Public Domain
### Introduction
This BIP describes a process for creating offers using PSBTs to swap
inscriptions. It was originally shared by
[Casey](https://github.com/casey/ord/issues/802). There are two other
approaches (`joinpsbts` and coinswap) to swap inscriptions however they degrade
the UX and use of SINGLE|ANYONECANPAY works better.
### Specification
[SINGLE|ANYONECANPAY](https://en.bitcoin.it/wiki/Contract#SIGHASH_flags) is
used for creating a PSBT by the seller. It is signed and published as offer.
Buyer updates the PSBT with appropriate inputs and outputs. Order of inputs and
outputs in the PSBT is very important as wrong ordering can burn inscriptions.
[Ordinal
theory](https://docs.ordinals.com/faq.html?#how-does-ordinal-theory-work) uses
an algorithm to determine how satoshis hop from the inputs of a transaction to
its outputs.
### Protocol
Sequence diagram:
```mermaid
sequenceDiagram
Note right of Seller: Create and Sign PSBT
Seller->>+Nostr relays: Publish offer
Buyer->>+Nostr relays: Accept offer
Note left of Buyer: Add inputs, outputs, sign and broadcast PSBT
```
Seller:
- Create PSBT with inscription UTXO input and a new address with sell amount as
output
- Sign PSBT
- Publish PSBT as defined in
[NIP](https://github.com/orenyomtov/openordex/blob/main/NIP.md)
Buyer:
- Add new address as output in PSBT to receive inscription
- Create [dummy UTXO](https://i.imgur.com/8Rw3TFX.png) if not available in
wallet (Less than 1000 sats)
- Add UTXO to pay seller and dummy UTXO as inputs in PSBT
- Sign and broadcast transaction.
Example tx:
https://mempool.space/signet/tx/ee7032f08ed18113c16ab8759d294c09f57492d8d255b5dbd16326df53bbdcac
This transaction has 3 inputs (dummy, inscription, UTXO used for paying seller)
and 4 outputs (inscription, payment, new dummy for future, change)
Note: Openordex creates a dummy UTXO and reuses address if there is no dummy
UTXO found for the address entered by buyer. Example:
https://mempool.space/signet/tx/388942887f79358a1deba3aae86e97b982a923566b2ef2249eab42288efc5abf
Pseudocode or Implementation (2 functions used by openordex for creating PSBTs)
```js
async function generatePSBTListingInscriptionForSale(ordinalOutput, price,
paymentAddress) {
let psbt = new bitcoin.Psbt({ network });
const [ordinalUtxoTxId, ordinalUtxoVout] = ordinalOutput.split(':')
const tx = bitcoin.Transaction.fromHex(await getTxHexById(ordinalUtxoTxId))
for (const output in tx.outs) {
try { tx.setWitness(output, []) } catch { }
}
psbt.addInput({
hash: ordinalUtxoTxId,
index: parseInt(ordinalUtxoVout),
nonWitnessUtxo: tx.toBuffer(),
// witnessUtxo: tx.outs[ordinalUtxoVout],
sighashType: bitcoin.Transaction.SIGHASH_SINGLE |
bitcoin.Transaction.SIGHASH_ANYONECANPAY,
});
psbt.addOutput({
address: paymentAddress,
value: price,
});
return psbt.toBase64();
}
```
```js
generatePSBTBuyingInscription = async (payerAddress, receiverAddress,
price, paymentUtxos, dummyUtxo) => {
const psbt = new bitcoin.Psbt({ network });
let totalValue = 0
let totalPaymentValue = 0
// Add dummy utxo input
const tx = bitcoin.Transaction.fromHex(await
getTxHexById(dummyUtxo.txid))
for (const output in tx.outs) {
try { tx.setWitness(output, []) } catch { }
}
psbt.addInput({
hash: dummyUtxo.txid,
index: dummyUtxo.vout,
nonWitnessUtxo: tx.toBuffer(),
// witnessUtxo: tx.outs[dummyUtxo.vout],
});
// Add inscription output
psbt.addOutput({
address: receiverAddress,
value: dummyUtxo.value + Number(inscription['output value']),
});
// Add payer signed input
psbt.addInput({
...sellerSignedPsbt.data.globalMap.unsignedTx.tx.ins[0],
...sellerSignedPsbt.data.inputs[0]
})
// Add payer output
psbt.addOutput({
...sellerSignedPsbt.data.globalMap.unsignedTx.tx.outs[0],
})
// Add payment utxo inputs
for (const utxo of paymentUtxos) {
const tx = bitcoin.Transaction.fromHex(await
getTxHexById(utxo.txid))
for (const output in tx.outs) {
try { tx.setWitness(output, []) } catch { }
}
psbt.addInput({
hash: utxo.txid,
index: utxo.vout,
nonWitnessUtxo: tx.toBuffer(),
// witnessUtxo: tx.outs[utxo.vout],
});
totalValue += utxo.value
totalPaymentValue += utxo.value
}
// Create a new dummy utxo output for the next purchase
psbt.addOutput({
address: payerAddress,
value: dummyUtxoValue,
})
const fee = calculateFee(psbt.txInputs.length, psbt.txOutputs.length,
await recommendedFeeRate)
const changeValue = totalValue - dummyUtxo.value - price - fee
if (changeValue < 0) {
throw `Your wallet address doesn't have enough funds to buy this
inscription.
Price: ${satToBtc(price)} BTC
Fees: ${satToBtc(fee + dummyUtxoValue)} BTC
You have: ${satToBtc(totalPaymentValue)} BTC
Required: ${satToBtc(totalValue - changeValue)} BTC
Missing: ${satToBtc(-changeValue)} BTC`
}
// Change utxo
psbt.addOutput({
address: payerAddress,
value: changeValue,
});
return psbt.toBase64();
}
```
Note: Openordex reuses address for change, however this can be avoided.
### Acknowledgements
- Casey Rodarmor
- Oren Yomtov
- Rijndael
/dev/fd0
floppy disk guy
Sent with Proton Mail secure email.
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