# Sidecar Channels ## Goal Alice is a new user of LN and has no UTXOs but wants to use Lightning. She’s willing to pay an onboarding fee to a wallet provider to get set up with both an initial balance (=outbound capacity) and the ability to receive payments (=inbound capacity). The example in this document assumes that Alice is aware of the costs of onboarding and is paying for them herself (which happens out of band from the perspective of the Pool server and is only mentioned explicitly for the completeness of the example). With the APIs proposed to be implemented in the Pool server and client, it should also be possible for a wallet provider to implement the flow in a way that they cover the full costs of the onboarding and therefore “gift” the channel and the balance to Alice. That would hide some of the parameters the API needs to work, therefore we show the more involved example here. ## Participants * Alice: New user, possibly using a mobile wallet, has no UTXOs but a wallet app that has lnd and Pool integrated as part of a unified (mobile) binary (only runs the Pool daemon, possibly even a "Pool light" daemon, does not need her own Pool account). * Charlie: A wallet/service provider that offers the sidecar bootstrap service for a fee. Offers to convert fiat or BTC into an initial LN balance for new users, minus said fee. Has a well funded Pool account that can be used to pay for leases. * Bob: An independent liquidity provider that is willing to open channels to new users. Has a well funded Pool account that can be used to open channels. ## Requirements * All three participants need to run the Pool client that implements the sidecar functionality: * Alice: Must be able to register with the auctioneer by providing the multisig pubkey and be able to sign with it (explained later on). * Charlie: Must be able to submit an order that refers to a multisig pubkey of the receiver node. * Bob: Must be able to accept orders that require to set a push amount when opening the channel. * No new functionality in lnd is required (though can be optimized later by replacing the channel acceptor with a new push amount parameter in the funding shim). ## Example flow (command line only) 1. Precondition: An agreement between Alice and Charlie is reached out-of-band. For this example, we assume Charlie is going to buy **10 units** (1m satoshi) of capacity from Pool for Alice. Of those 10 units, \*\*2 units will be pushed\*\* to Alice for her to gain outbound liquidity as well. The cost for the order submission fees, chain fees, the premium and the push amount are all paid from Charlie's Pool account. Whether Alice reimburses Charlie for those costs or not is not part of the protocol and irrelevant for this example. 2. ``` charlie$ pool sidecar offer --capacity 1000000 --self_chan_balance 200000 --auto { "sidecar_ticket": "sidecar15o1Y9oXtyKr3hs2UQho9YmJKbSmB...." } ``` The sidecar ticket now contains the offer from Charlie to buy a 1m satoshi channel with a 200k initial self channel balance (=push amount) for Alice. With the `--auto` flag we signal that we want to leverage the existing auctioneer infrastructure to permit both peers to communicate with each other in order to finalize the ticket negotiation. The addition of this "auto" mode means that both sides need to only execute a single command and the rest of the negotiation happens in the background. If the `auto` flag is present, only the capacity and balance need to be specified, otherwise, all other information needs to be specified when submitting a full order. 3. Alice now needs to add her node's information: ``` alice$ pool sidecar register sidecar15o1Y9oXtyKr3hs2UQho9YmJKbSmB { "sidecar_ticket": "sidecar15o1Y9oXtyKr3hs2UQho9YmJKbSmB...." } ``` The sidecar ticket now contains the `Recipient` field which encodes Alice's node pubkey and pubkey that'll be used for the channel funding. Rationale: Alice will be counter-signing the commitment transactions for the new channel so she needs to have the private key for her 2-of-2 multisig channel funding key. We derive that from her keychain. At this point if the `auto` flag was set in the initial ticket, then we're done here! Both sides now just simply wait for the next batch, to be executed which'll result in a new sidecar channel being created. Otherwise, Alice and Charlie will need to carry out another round of communication: 1. Charlie can now create the bid order with the updated ticket he got from Alice: ``` charlie$ pool orders submit bid --acct_key \ --interest_rate_percent xxx --sidecar_ticket sidecarAAQgHBgUEAwIBAAMB... { "order_nonce": "0011223344...", "sidecar_ticket": "sidecar15o1Y9oXtyKr3hs2UQho9YmJKbSmB...." } ``` The sidecar ticket now contains the order's nonce in the `Order` part. Charlie can give the final version of the ticket back to Alice. 2. Alice instructs her node to start expecting a channel. ``` alice$ pool sidecar expect-channel sidecarAAQgHBgUEAwIBAAMBYwUBAg... ``` --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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