LITEX is a completely decentralized cryptocurrency payment ecosystem. Based on the business model of Epay’s star product-"Non-bank card payment" and the BOLT protocol, the LITEX team designed the LTXN (LITEX Network), which enables the purchaser to pay the legal currency to merchants and consumers on behalf of consumers. The process by which the purchaser pays the cryptocurrency. This process is guaranteed by smart contracts and does not require the participation of centralized operating organizations.
In the architecture of LTXN, the decision-making network matches the payment requests of consumers and purchasers of coins at the upper layer, and the lower layer establishes a safe and efficient payment channel to deliver encrypted currencies by the Lightning Network. Merchants complete the purchase of coins through the acquirer. Consumers pay for settlement in legal tender. The upper-level decision-making network also uses incentives and feedback strategies to improve network efficiency while suppressing the centralization tendency of the Lightning Network.
Advantages of LITEX:Decentralized ecosystem: The legal currency in the system is provided by the purchaser, and all parties in the ecosystem share the fee income. There is no need to rely on centralized institutions such as exchanges, and there is no legal currency fund pool or official operator;
High performance and low cost: With the increase in the number of network nodes, the processing capacity can reach one million transactions per second, meeting the requirements of daily payment timeliness while achieving extremely low handling fees;
In-depth and stable landing: The foundation and partner teams have deep experience and resources in the payment industry, and can quickly promote global acquirers to join the ecological sharing dividend, avoiding unstable factors caused by cooperation with bank card organizations;
Merchants expand quickly: Merchants can still settle with the acquirer according to the original process, without having to pay additional costs or bear currency risks for accessing LITEX;
Avoid loss of funds: The payment channel based on smart contracts has strict restrictions on the destination of funds, and the user's balance is deposited in the channel, even if it is attacked, it cannot be stolen by a third party.
LITEX will become the infrastructure of the future digital world. Although we currently live in a society based on legal currency, cryptocurrency is not far away from us. Some people have begun to accept cryptocurrency as compensation for labor services such as design, development, and consulting. With the continuous development of the platform-based ecology represented by Ethereum, more and more value will be generated on the chain, and people are gradually willing to allow part of their labor to be rewarded in the form of cryptocurrency. Unlike speculators, these "crypto-currency standard" holders will be more inclined to directly exchange goods and services through LITEX than to bear the handling fee to exchange fiat currencies on exchanges. On the other hand, there are still many people in underdeveloped areas that cannot enjoy convenient financial services, and it is also very difficult to accept charitable donations from various countries. By allowing local acquirers and large chain merchants to join the payment ecosystem, LITEX can contribute to charitable undertakings in these areas. Have a great positive effect.
1. Concept definition
·LTXN (LITEX Network): The basic network of the LITEX payment ecosystem. Customized and improved based on the BOLT protocol, LTXN enables automatic matching and intelligent routing of payment and currency purchase transactions, and carries complex game strategies through a series of smart contracts, which prevents the emergence of centralized nodes while maintaining good connectivity And the response speed makes the network topology structure balanced and efficient.
·Customer: A user who uses cryptocurrency to make consumer payments;
·Exchanger: A user who purchases (exchanges) cryptocurrency with fiat currency;
·Node: A professional individual who provides connectivity in LTXN to obtain fee income;
·Acquirer: The institution responsible for deducting money from the purchaser and conducting currency settlement with the merchant law.
2. Scheme design
2.1 LITEX architecture
The picture above is the overall architecture diagram of the LITEX solution. The solid arrow represents the flow of real transaction elements such as currency and products, and the dotted line represents the flow of data and control information in the LITEX system. The R is called the original image, which can be simply understood as a code word, the person who gets the code word You can ask for cryptocurrency from his upstream, which is the mechanism used in the HTLC smart contract to ensure the automatic transaction transmission of the entire chain.
The operation of the LITEX ecosystem is mainly driven by two processes. The main process is the process of consumers using cryptocurrency to consume, which basically runs counterclockwise in the above figure; the secondary process is the process of currency purchasers changing legal currency into cryptocurrency, which basically follows In the above figure, it runs in a clockwise direction. The two processes get optimized configuration and linkage through the coordination of LTXN, and jointly complete the requirements of a variety of payment scenarios and exchange scenarios.
In the main process, the acquirer (Acquirer) arranges the payment information in advance at the merchant (Merchant), such as a payment QR code (or NFC payment device compatible with Apple Pay, etc.), and the consumer (Customer) passes The LITEX compatible wallet App initiates a payment request (PayRequest), which is broadcast to LTXN, and a payment route (Route) is obtained through matching, which sends the consumer's payment request to the purchase coin with the highest matching degree Then enter the sub-process, and the currency purchaser (Exchanger) will pay the merchant through the acquirer's deduction in legal currency. The acquirer will send R to the currency purchaser after confirming the deduction, and the currency purchaser will be able to send R back to LTXN. The corresponding amount of encrypted currency is immediately obtained, and finally R is fed back to the consumer via LTXN. After the consumer verifies R and the encrypted currency is paid to the corresponding downstream node in LTXN, and the entire transaction process ends.
The priority of meeting each requirement in the system design is as follows:
·Financial SecurityEnsuring the security of transaction funds is a prerequisite for off-chain transactions. Only through technical solutions to avoid the risk of centralized trust is a qualified off-chain transaction solution. LTXN is based on Lightning Network technology and can ensure the safety of funds through two smart contracts, RSMC and HTLC. If the LITEX node is attacked and the network cannot be connected, the user's cryptocurrency assets will also be automatically submitted to the main chain for withdrawal by the smart contract after a certain period of time, and safely returned to the user's digital wallet.
·Payment and collection experienceThe small-amount payment scenario requires consumers to complete the payment quickly and smoothly, and merchants can easily confirm the payment status. Due to the volatility of the value of cryptocurrency, if cryptocurrency is used for price tagging, both consumers and merchants will be caught in the disaster of constant changes in commodity prices. LITEX's client supports the input of prices in fiat currency, and the corresponding cryptocurrency price is determined with the assistance of the matching engine. Consumers only need to know the amount that they have paid for a specific fiat currency price through cryptocurrency; on the merchant side, Merchants can choose fiat currency to enter the account in real time, so the user experience is no different from other payment gateways (such as Visa), and even has an advantage in the time of payment.
·Exchange efficiencyThe system can provide corresponding product schemes for different exchange needs, and the specific scheme to be selected is freely chosen by the purchaser. If the purchaser has a stable demand for currency exchange and does not require high timeliness (for example, it can be delayed by one day or even a week, and can bear the risk of currency fluctuations), the system can meet this demand with a relatively low fee ; If the purchaser has a very urgent need for currency exchange, the system can also match the corresponding order through the matching engine as quickly as possible, and the purchaser may have to pay a higher fee at this time.
2.2 Overview of LTXN
The figure above shows the routing situation of a payment transaction in LTXN after matching a currency purchase transaction.
In the classic lightning network, each lightning network node maintains a full node corresponding to the encrypted currency by default. According to the design of HTLC, when a transaction is passed, all nodes in the payment channel must actively control the transaction. Pass for signature. However, in practical applications, it is impossible for ordinary users to maintain a full node for micropayments, nor do they have the energy to manually sign every transaction that passes through their own channel. A more realistic scenario is that users sign their payments through mobile terminals such as smartphones (which cannot carry full nodes), and will not connect to the payment network before initiating the next transaction. Therefore, it is unrealistic to rely on ordinary users for transaction delivery. LTXN has designed a professional user similar to miners in various public chains-Node to provide transaction delivery services.
Bitcoin miners earn mining rewards and transfer fee income by recording transactions. Similarly, Node in LTXN earns payment and exchange procedures through services such as maintaining full nodes, establishing transaction channels, fully automatic signatures, and guaranteeing online rates. The price oracle machine ensures that the handling fee is lower than that of the local exchange. In order to ensure the stability of the services provided by Node and suppress the tendency of centralization, Node needs to pledge a certain amount of Token to the smart contract (Token related design is detailed later) to obtain the corresponding amount of transaction transfer rights. These are in the process of transferring transactions. Token will be continuously consumed, and then automatically distributed to consumers, exchangers and other ecological parties by smart contracts. Because the number of Tokens pledged by Node is different, its ability to transfer transactions is also different. The red Node in the above figure cannot carry this transaction because it reaches the upper limit of the transfer amount and is bypassed by routing.
According to the design of RSMC, the payment channels between Nodes are divided into different sizes, which are shown as different distances between the double lines in the figure. If the amount of a transaction exceeds the upper limit that the current channel can transmit, the route will also abandon this channel. The red double line in the figure indicates the channel that the current transaction cannot pass due to the excessive amount.
In order to balance efficiency, stability, cost, topology and other aspects, there are many specific mechanism designs in LTXN, including pledge systems and game strategies, and even the bottom layer of the BOLT protocol needs to be customized and optimized. Due to space limitations, technical solutions that are too in-depth will be specifically introduced in the subsequent yellow papers.
3. Technological innovation
3.1 Compound Decision Lightning Network Model
The Lightning Network is a collective term for distributed networks based on the BOLT protocol. The classic Lightning Network design can only realize the off-chain point-to-point transactions of encrypted currencies. Once it involves the matching of legal currency transactions, it can do nothing. The compound decision-making lightning network abstracted by LTXN integrates a decision-making layer network and an execution layer network into the same distributed system. While sharing nodes, it can achieve deep linkage, making the lightning network more intelligent, so as to realize exchange requests and exchanges. Advanced routing functions such as matching payment requests can also keep the network topology healthy and efficient through rule design, avoiding centralized nodes.
3.2 Matching engine
The matching engine is a collection of distributed intelligent algorithms, which is the most complex core logic of LTXN. The following descriptions are mostly based on the simplest business categories in the system, and do not involve specific data structures, nor discuss the core strategy set-how "non-bank card payment" business logic can be applied to complex business processing and improve system stability, etc. detail.
There are many payment requests and redemption requests in the LTXN system at the same time. Among them, payment requests generally have the characteristics of relatively small amount and very high immediacy requirements. Exchange requests depend on the situation: some users can afford to obtain lower exchange costs. For the conversion process with relatively low immediacy, you can even set only an upper limit, and end the conversion at any time as needed during the conversion process; other users can choose to pay a higher conversion fee in order to obtain cryptocurrency immediately. The exchange is completed in a short time. In actual design, the timeliness/cost ratio of user needs may be anywhere between the aforementioned two situations, and we use a certain method to quantify it as the reference data for the adaptive matching decision of the entry node.
In addition to the timing/cost matching, the matching of the amounts of the two parties is also a very important part. A common situation is that the amount of the exchange request is greater than the payment request. Each node of LTXN needs to match multiple requests that meet the requirements across the entire network to form an optimal solution. Factors that need to be considered include but are not limited to currency, amount, channel time cost, Channel transmission loss, etc. If the payment request is greater than the exchange request, the payment amount is larger in this case. In addition to the above factors, the timeliness and cost of the main chain channel should also be considered comprehensively. If the amount is too large, the user is recommended to use the main network Paid.
Finally, the matching strategy also needs to consider the cost of connectivity. If the receiving and paying parties are in two networks that are not connected to each other, the cost of establishing an inter-network channel also needs to be considered. These are discussed in the routing section below.
3.3 Intelligent routing
The establishment and closure of Lightning Network channels require on-chain transactions, which will incur relatively high time and money costs. Therefore, in most cases, there is no direct channel between consumers and purchasers, but through intermediate nodes according to the HTLC contract. Conduct transaction transmission. The intermediate node may be a single node, or it may be multiple nodes directly connected end to end. In order to be able to quickly find the shortest (or lowest cost) path, each node of LTXN has a set of autonomous negotiation algorithms and node information cache synchronization strategy, so as to find the path and complete the transaction at the fastest speed when the demand arises.
The withdrawal operation of the Lightning Network needs to close the payment channel, which makes the topology of the entire network always in a state of change: On the one hand, the old channel may be closed at any time, and the new channel may be opened. The original legal channel may not pass through in time. When it is closed, it is necessary to find a new channel immediately. On the other hand, due to the different requirements of each payment, the channel capacity (which can be understood as the diameter of the channel) between the nodes will also be different, except for the initial routing of the channel In addition to capacity considerations, it may be necessary to split and merge payments in real time during the routing process. These business logics that go beyond the traditional routing algorithm problem model require more detailed strategy implementation.
3.4 Light node
According to the BOLT protocol, the node of the Lightning Network is designed as a complete Bitcoin network node, which means that users who join the network must maintain a complete data backup with a volume of tens of gigabytes, which is unrealistic in actual use. . We design the LTXN node based on Simplified Payment Verification (SPV), and add some data records required by the business on this basis, so that the LTXN node does not need to maintain a complete node or store it All user transactions in the entire network only need to store the relevant transactions of the users who establish the channel with the node. Once the channel is closed, the transaction is confirmed on the blockchain main chain, and the balance of the nodes at both ends of the channel will be written back to the main chain. At this time, the user can choose to delete the previous transaction data to optimize storage space. The optimized LTXN node will not take up too much storage space, which can be fully supported by ordinary smart phones.
3.5 Other
In order to realize the design of LTXN and meet the needs of small instant payment, LITEX laboratory is still digging deeper into the lightning network topology design and completing a more efficient routing scheme by improving the BOLT protocol.
Application scenariosFirst of all, without introducing LITEX, we discuss what the consumption scenario of cryptocurrency looks like:
Suppose Alice only holds Bitcoin and wants to buy a cup of coffee from the coffee shop owner Bob. If Bob is just an ordinary businessman who doesn't know much about technology and doesn't follow trends, then the probability of him owning a Bitcoin wallet is almost zero, which means that Alice must first convert Bitcoin into legal currency before paying Bob. Alice can log in to a cryptocurrency exchange to sell her bitcoin, and in order to obtain fiat currency as soon as possible (Bob may have started grinding coffee beans), she needs to list it at a relatively low price and pay a relatively low transaction fee . Due to the small transaction amount, even if Alice successfully sells Bitcoin, the transaction arrival time may be as long as several hours, and the coffee is already cold by this time.
After the last failed transaction, Bob has a certain understanding of Bitcoin. He appreciates the concept of Bitcoin, but at the same time he does not want to bear the risk of currency fluctuations because of accepting Bitcoin payments, so he accesses a Bitcoin payment gateway In this way, the provider, although it accepts bitcoin payment, the final account is the fiat currency exchanged by the payment gateway, which looks much more normal. In order to facilitate payment, Alice has also pre-charged this payment gateway (mainnet transactions require higher fees and a longer time), so this time the bitcoin payment experience is good, and Alice quickly got it and just finished it. Coffee. Bob logged in to the gateway back office and planned to withdraw the $5 transaction just now. It turned out that the payment gateway changed the withdrawal threshold to $100 due to the high transaction fees of the Bitcoin main network! In desperation, Bob can only withdraw cash after Alice buys 20 cups of coffee. This will take at least 20 days if Alice comes every day. On the 19th day, Bob discovered that the payment gateway had lost a large amount of Bitcoin and cash due to a hacker attack, and declared bankruptcy (centralization risk). His undrawn $95 was also in vain. At this time, Alice also Complained to Bob that the bitcoins he hadn't used up were also transferred away by hackers in this incident.
Now we introduce LITEX and feel the convenience and security brought by the decentralized payment network.
Bob suffered a loss, but he did not give up Bitcoin, so he plugged in a new technology solution LITEX. The access process is no different from other payment gateways (such as Visa, etc.), and it goes smoothly, so Bob informs Alice that he can accept Bitcoin payments again. In order to avoid the centralization risk she suffered last time, Alice also became a user of LITEX and established her own payment channel. So she opened the LITEX client to scan Bob’s payment QR code, and directly entered the coffee’s legal currency amount of US$5, and clicked to pay. After 1 second, Bob’s cashier prompted to receive a payment of US$5. Bob clicks to confirm the payment and finds that the 5 dollars is directly sent to his account; Alice's mobile phone also prompts that the payment is completed at this time, and the equivalent of 5 dollars in Bitcoin has been deducted from the channel balance, and the handling fee is 0. With the help of LITEX, Alice used Bitcoin to buy a cup of coffee very conveniently without paying any handling fees; Bob received the legal currency converted from Bitcoin in real time, and can finally continue to accept Bitcoin payments with confidence. In fact, even if LITEX receives an attack and loses some of the nodes, the established LTXN can still fulfill Alice's payment requirements; even if most of the nodes are destroyed and the payment fails, Alice and Bob’s existing assets are not available. Will suffer losses.
Token system design1. Name and design goals
As a multi-role ecosystem, LITEX needs a series of incentive rules to ensure the healthy operation and rapid development of the system, and return the value generated by the ecology to all participants. For this reason, LITEX designed an encrypted token LITEX Token (symbol is LXT) to carry this function.
2. LXT economic system
2.1 Generation and extinction
LXT is currently generated based on the Ethereum smart contract ERC20 standard, and the total number is 2 billion (2,000,000) pieces, which are configured by the system at one time and will never be issued. LXT has no elimination mechanism.
2.2 Supply and demand
·Supply: LXT will be dropped to consumers, exchangers and other ecological parties in a certain proportion according to the transaction amount;
·demand:
·Node: Obtain the operating rights of the corresponding volume by staking LXT to the system, and constantly supplement the consumption of LXT in the operation process, and the consumption part is used as a source of supply;
·Users: Use LXT to pay to get price discounts (fee discounts, reductions, etc.).
The above figure approximates the flow of LXT in the ecology. The data is for descriptive purposes only and does not represent actual values. In the actual design, according to the policies, tax laws and other factors of different countries and regions, as well as the parameters provided by the price prediction machine, the proportion of handling fees, the proportion of LXT consumption and drop will be different. In addition, as an ERC20 Token, LXT will inevitably incur costs in ecological distribution. As a system with positive benefits, LITEX can fully bear this cost and further reduce costs through reasonable mechanism design.
3. LXT issuance plan
Project roadmap
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