Darkpool (Tarpit): Privacy Preserving Cooperative Self-Custody Pool on Bitcoin

• "Darkpool is a privacy preserving cooperative self-custody pool on bitcoin, utilizing taproot n-of-n musig on the key path and CTV (OP_CHECKTEMPLATEVERIFY) settlement tree on the script path."
• "Tarpit is the name chosen for the proof of concept implementation project of darkpools."

Properties

• "Economic: Single on-chain UTXO, fee for state transitions is shared by all participants, small on-chain footprint."
• "Private: Fungible denominations and blind signatures provide ecash like privacy."
• "Byzantine proof: Preserves property rights with no offline risk, clients can't advance an invalid state."
• "Interactive: All participants have to be periodically online to sign a state transition via n-of-n schnorr musig."
• "Sovereign: All participants can initiate and drive forward withdrawal, an on-chain partial or final settlement."
• "Standalone recovery: Even in case of a disastrous crash and loss of state backups unaided recovery is possible."
• "Robust: The full CTV settlement tree is deterministically generated from the current vTXO set."

"Without having access to the static Pool Template Backup standalone recovery from seed is perilous. One would not be able to easily find the settlement transactions, and would have no idea if their leaves already hit onchain, or not. It would also be hard to tell what derivation paths to try under the assumption that the non cooperative leaves have been ejected."

Read full concept in the GitHub Repo.

GitHub Repo