How-to-create-DLC.md

How to Create DLC using CLI

Setup

Prerequisites

• bitcoind / bitcoin-cli have been installed
  • e.g. brew install bitcoin
• Contract conditions and deals have been decided

Install CLI

go get -u github.com/p2pderivatives/dlc/cmd/dlccli
dlccli --help

and go to source directory

cd $GOPATH/src/github.com/p2pderivatives/dlc

Run bitcoind

# regtest mode
make run_bitcoind 

# testnet mode
make run_bitcoind BITCOIN_NET=testnet

# mainnet mode
make run_bitcoind BITCOIN_NET=mainnet

To clean up regtest, run the following tasks and run bitcoind again

make stop_bitcoind && make clean_bitcoind

if you want to stop bitconind of mainnet/testnet

make stop_bitcoind BITCOIN_NET=testnet # or mainnet

Steps

• Set Up Parameters (optional)
• Create Wallet
• Create Addresses
• Deposite funds and fees
• Create DLC
• Confirm Created Transactions
• Send Fund Tx
• Fix Message
• Execute Contract

Set Up Parameters (optional)

If you wish to use the scripts to execute the different steps, you first need to set up the parameters. Edit the file test/cmd/set_parameters.sh and then source it using:

source ./test/cmd/set_parameters.sh

The parameters are described in the file.

(Note: it is important to use source and not execute it directly otherwise the environment variables won't be set.)

Create Wallet

Using a script

Run:

./test/cmd/create_wallets.sh

Using commands

Create Alice's wallet

dlccli wallets seed --conf ./conf/bitcoin.regtest.conf

3100c6bd2a1fe93baaa49e7666bd5c3875a86fb7e417947281d757e7f8e6593f

Hereafter, replace "seed_alice" with the hexadecimal number generated above.

dlccli wallets create \
    --conf ./conf/bitcoin.regtest.conf \
    --walletdir ./wallets/regtest \
    --walletname "alice" \
    --privpass "priv_alice" \
    --pubpass "pub_alice" \
    --seed "seed_alice" 

Create Bob's wallet

dlccli wallets seed --conf ./conf/bitcoin.regtest.conf

3100c6bd2a1fe93baaa49e7666bd5c3875a86fb7e417947281d757e7f8e6593f

Hereafter, replace "seed_bob" with the hexadecimal number generated above.

dlccli wallets create \
    --conf ./conf/bitcoin.regtest.conf \
    --walletdir ./wallets/regtest \
    --walletname "bob" \
    --privpass "priv_bob" \
    --pubpass "pub_bob" \
    --seed "seed_bob" 

Create addresses

Using a script

Run:

source test/cmd/create_addresses.sh

(Note: again be careful to use source so that environment variables are properly set.)

Using commands

The DLC requires three addresses:

• One base address to be used in the fund transaction,
• One change address to be use to send the change from the fund transaction,
• One transfer address to receive the output of the DLC.

For Alice use the following command to generate an address:

dlccli wallets addresses create \
    --conf ./conf/bitcoin.regtest.conf \
    --walletdir ./wallets/regtest \
    --walletname "alice" \
    --pubpass "pub_alice"

bcrt1q9679haanl0tax3wmylsdr62ft3xfc2yu9g74a4

For Bob:

dlccli wallets addresses create \
    --conf ./conf/bitcoin.regtest.conf \
    --walletdir ./wallets/regtest \
    --walletname "bob" \
    --pubpass "pub_bob"

bcrt1q08q2ks538wqzu2z766rpfh0cttvckz6jsluszm

Deposite Funds and Fees

Note that the below steps are only valid for regtest. For testnet and mainnet, you will have to send the fund using your wallet to the base addresses generated in the previous step.

Using a script

Run:

./test/cmd/deposit_funds.sh
./test/cmd/check_balances.sh

Using commands

Alice

% bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf \
	sendtoaddress bcrt1q9679haanl0tax3wmylsdr62ft3xfc2yu9g74a4 0.20022035
	
b4586b8acc967292f760c6217af91d7500cae217a67ec2e890a6e06913cb7986

If using regtest:

% bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf generate 1

[
  "5d9aef6cae467233c6d263d85875e1db10b5dfc561e03b8c2d4924b2a5d7bd32"
]

dlccli wallets balance \
	--conf ./conf/bitcoin.regtest.conf \
	--walletdir ./wallets/regtest \
	--walletname "alice" \
	--pubpass "pub_alice"
	
0.20022035

Bob

bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf \
	sendtoaddress bcrt1q08q2ks538wqzu2z766rpfh0cttvckz6jsluszm 0.33355368
	
4181f0d52966edf374b7319d3975c41b61bdd53861b319a0e836f9c8df6f5e01

If using regtest:

bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf generate 1

[
  "6f176d42b59de844d0f334ac06aafb348c20fec68ddbc0d6034de94f09fe9d71"
]

dlccli wallets balance \
	--conf ./conf/bitcoin.regtest.conf \
	--walletdir ./wallets/regtest \
	--walletname "bob" \
	--pubpass "pub_bob"
	
0.33355368

Prepare Deals

Prepare deals in csv format (or use the file included in the repository).

Example:

# value, distribution1(satoshi), distribution2(satoshi)
$ head ./test/cmd/deals.csv
3000,53333333,0
3001,53288903,44429
3002,53244503,88829
3003,53200133,133200
3004,53155792,177541
3005,53111480,221852
3006,53067198,266134
3007,53022946,310386
3008,52978723,354609
3009,52934529,398803

Create DLC

Using a script

Run

./test/cmd/create_dlc.sh

Using commands

Generate R points for oracle

(Note: fix time needs to be greater than current time.)

$ dlccli oracle rpoints \
    --conf ./conf/bitcoin.regtest.conf \
    --oraclename "olivia" \
    --rpoints 4 \
    --fixingtime "2019-08-30T12:00:00Z" \
> opub.json && cat opub.json
{
  "pubkey": "03a7844731daf02e1fa81249bafe7efe456375ebbcce927dd38e4e4232853dff15",
  "rpoints": [
    "021fc465868ef187ec26ce45407bfadd99839d4dc101f4c4526e2e9a17ad3e811b",
    "02dc200c6cadcf320abbaeabb710a11d1da2e92cb42a1d7d7b19729a270ed51190",
    "03602cf96e40bc6fd08df540cbcc841cce95625bd9d4588d7e8bc113d864c6a5a0",
    "03e2ee1312646d0b22d526299ca293445ff4c242b0cae0aadd76fa1ccb0bd06880"]
}

Alice and Bob create DLC

(Note: hereafter address1 and address2 correspond to the transfer addresses generated in create addresses)

dlccli contracts create \
	--conf ./bitcoind/bitcoin.regtest.conf \
	--oracle_pubkey ./opub.json \
	--fixingtime "2019-08-30T12:00:00Z" \
	--fund1 2000000 \
	--fund2 3333333 \
	--address1 "bcrt1qjndkjszkzqpahdzz8kkc4hgxljlrlswp25cusr" \
	--address2 "bcrt1qkcuc77z0ktnyfv8stz6xrnnc8uawxt7gg055gt" \
	--change_address1 "bcrt1qd9aadr8jf4v2y4pe0l239h2r25tmff9lrz35v9" \
	--change_address2 "bcrt1qwk5j2evm0h3kf7cakd4dlh0e9v38ll0ex64ssj" \
	--fundtx_feerate 50 \
	--redeemtx_feerate 40 \
	--deals_file ./test/cmd/deals.csv \
	--refund_locktime 5000 \
	--walletdir ./wallets/regtest \
	--wallet1 "alice" \
	--wallet2 "bob" \
	--pubpass1 "pub_alice" \
	--pubpass2 "pub_bob" \
	--privpass1 "priv_alice" \
	--privpass2 "priv_bob"
	
Contract created

ContractID:
68a0c4026c76800c33bd5614fec7b3402bf55067dc2670576f146ac26a98b692

FundTx hex:
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

RefundTx hex:
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

If one of the party pays a premium to the other use:

dlccli contracts createwithpremium ... --premiumamount 200000 --premiumdestaddress "bcrt1qvqpyv5nd49y9y7ndjdum5xy0qduttc7ehhw70e" --premiumpayingparty 0

(Note: the other parameters should be set similarly.)

Confirm Created Transactions

Fund Tx

$ bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf decoderawtransaction \
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

{
  "txid": "29e7b2e17ebc192fc72be08dbab1d618a72dd4e1547d499c68ac0699b427ff6d",
  "hash": "9f9d293e32816cf3f0d8410dc65c490bb03488b26106237ece39d54d89f8f5b6",
  "version": 2,
  "size": 413,
  "vsize": 251,
  ...
  "vout": [
    {
      "value": 0.98053015,
      "n": 0,
      "scriptPubKey": {
        "asm": "0 c51b2215f583b9544186a9352b2e800860a4a20ba75dabd4ac5554ab7736db64",
        "hex": "0020c51b2215f583b9544186a9352b2e800860a4a20ba75dabd4ac5554ab7736db64",
        "reqSigs": 1,
        "type": "witness_v0_scripthash",
        "addresses": [
          "bcrt1qc5djy904swu4gsvx4y6jkt5qpps2fgst5aw6h49v2422kaekmdjqnrk7rs"
        ]
      }
    },
    ...
  ]
}

Refund Tx

$ bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf decoderawtransaction \
0200000000010174a82a1e758db53eb4098431430c077cec437866bd9c9135af8d2122c6b1ac500000000000feffffff02e79bd60200000000160014498ef5355b87b188ff074b41ab36c9840171a0c3c859010300000000160014dfea60b1b9eeea759f0c988a89c854ad6959f7930400483045022100d81c1ea006d5f1c132339e0f789756ee354ed906a877d5169a81c44d0d36cb5c02207987d8c5433af70d830009b1213ebd20f382760207e0f702cf1a6281c4d811810147304402205b1fa0062f6c1c2993a6953bed4356e788a2fd69d2a3e05d34212496f2d9257f022034bf8abe5994b5ce8d61f91ea661aca58dcf679272c8a3aaa408638083105f010147522102923081bc3ff2e7c72969013265e99b1c4af1c59b6572f6f9734f632aeb7d319821037b8e3201837b670bafaf3fd3e5cb20e952e45cc406040eda27c32f192dad968c52ae88130000

{
  ...
  "vin": [
    {
      "txid": "b7af665256972e1ca53b2ebe13aa471c73aa979fb9be4f42575523ea8444e295",
      "vout": 0,
      "scriptSig": {
        "asm": "",
        "hex": ""
      },
      "txinwitness": [
        "",
        "3044022031b478fcf34e650b652f8f8cccc81be9593e4f5a0a275a3c69c44cf6a8f76f9502206fe697675c50daffd45fda34c9c928b98d9f6f84137ac751e89ce667a3c9642c01",
        "304402203d669277cd5d4ad4be11b5dd10e89af4245e0dc84bc0df71993c99f0b08e62d6022004e18ff9187d0e1c207dafc254f9aef2aef0dd8b771ef6386513f7950475684801",
        "522103b1afa38b000ecf30b589d401fe052225f275719470b058eb8885d6509c9140b82103bf1f253c953480cf4719d30049d053a1bf61fb4e368bf198f1dc50b7f176da1e52ae"
      ],
      "sequence": 4294967294
    }
  ],
  "vout": [
    {
      "value": 0.47619047,
      "n": 0,
      "scriptPubKey": {
        "asm": "0 6797b2e46b6fc41276fe117c8b1ad863f7208975",
        "hex": "00146797b2e46b6fc41276fe117c8b1ad863f7208975",
        "reqSigs": 1,
        "type": "witness_v0_keyhash",
        "addresses": [
          "bcrt1qv7tm9ertdlzpyah7z97gkxkcv0mjpzt4xp066v"
        ]
      }
    },
    {
      "value": 0.50420168,
      "n": 1,
      "scriptPubKey": {
        "asm": "0 b2d65da4e5d306588a6d9d5e55e990a9fb1d9559",
        "hex": "0014b2d65da4e5d306588a6d9d5e55e990a9fb1d9559",
        "reqSigs": 1,
        "type": "witness_v0_keyhash",
        "addresses": [
          "bcrt1qktt9mf896vr93zndn409t6vs48a3m92ev8gtdh"
        ]
      }
    }
  ]
}

Send Fund Tx

Run:

$ bitcoin-cli -conf=`pwd`/conf/bitcoin.regtest.conf sendrawtransaction \
020000000001028679cb1369e0a690e8c27ea617e2ca00751df97a21c660f7927296cc8a6b58b40000000000ffffffff015e6fdfc8f936e8a019b36138d5bd611bc475399d31b774f3ed6629d5f081410000000000ffffffff03972bd805000000002200208fc69883a973c042c3d636ba6bf16c6d6fcb8e0645b17c49593d4a81b032c0e351d8c338000000001600149f96e83381d6cdd2547c4ba356799f3dd98e8aa5701a993800000000160014b2148ad2f69392741d6aea79c3e9a5b66a95527f02483045022100960ec31876d5250b5c06ec674149ba5229df35553b9dff901195bde65eb572ea02202d2f2f1ef937be7c654d4dfb9942adcf658111adf6b84d9b84d5465ba5d2a2bc012103cb7a859433bbda5ab9d5a956e05e3c0bc32c93ef89333354dd26ab0ff5a4771602473044022043d3f1f92a68ba7cd79903e150502452a5ea7100c1e70f527b649479f070c0e902202588b70052348e5180bcc0491e4b4dc80f8001a7a176a3d7af09e2d98dfad638012103eb9a227fbae493c2d310cccdd9151d0b372be81ccc9665842279c17fd8cf50a800000000

50acb1c622218daf35919cbd667843ec7c070c43318409b43eb58d751e2aa874

If in regtest, generate a block so that the transaction gets into the blockchain.

$ bitcoin-cli --conf=`pwd`/conf/bitcoin.regtest.conf generate 1
[
  "3394576eaf0d1fcc8158d03b7e6f72065acc235ecc67790250e895ca27f07d2f"
]

Fix Message

Using a script

Run:

./test/cmd/fix_message.sh 3500

Using commands

$ dlccli oracle messages fix \
	--conf ./conf/bitcoin.regtest.conf \
	--oraclename "olivia" \
	--rpoints 4 \
	--fixingtime "2019-08-30T12:00:00Z" \
	--fixingvalue 3500 \
> osig.json && cat osig.json

{
  "sigs": [
    "202654f589c18a0672fc2501af8cc70be7bb5d2afdf40c8e3a7f41981df4e850",
    "409b0f0a358f83fef5ebf546e549b4fb6634e2e4ced96e00336bf99249cb8d86",
    "fdc0ab07f575b4d6e4c7dbf3ad6d2cf853f26cad69a4c1374895c63a19907112",
    "03fc4728ab8268c97a4aaf320bad3f78d6ee67ad42e37f861b759d5d6173a0ab",
    "fb9de05bf985a95ed99199004cb54bcc5b1504c41f5e77dd477bd662c30464e9"
  ],
  "value": 3500
}

Execute Contract

Using a script

Run:

./test/cmd/fix_deal.sh 68a0c4026c76800c33bd5614fec7b3402bf55067dc2670576f146ac26a98b692

where the parameter is the id of the contract generated in create dlc.

Using commands

$ dlccli contracts deals fix \
	--conf ./conf/bitcoin.regtest.conf \
	--dlcid 68a0c4026c76800c33bd5614fec7b3402bf55067dc2670576f146ac26a98b692
	--oracle_sig ./osig.json \
	--walletdir ./wallets/regtest \
	--wallet alice \
	--pubpass pub_alice \
	--privpass priv_alice \
	--contractor_type 0

CETx hex
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


ClosingTx hex
020000000001011ede1f49a28f214a69c4ba7da872c14f55aca6b281f703b2fcc45eee3a55abae0000000000ffffffff01a60900000000000016001480ea81624d813b845b4d61c562c7a3f555be51bc03483045022100c70fd68cb4fba78865d27c83976e1f31b8639808d9e17d0465c3032065c66485022040c795dea6c3b6802c4112436971d5a672640646bdbee3a1928bc2b1e9b7bf070101014d632103d554fe2c8c425ee13e91a06ea4d47daae597c7eebab643f178147738c2c2792767029000b27521031179e5d1c0f3faad53e9d5f3760705e3d006655e3ad0a5a32afe73639dc50dab68ac00000000

Finally send the created CETx and ClosingTx to the network using bitcoin-cli as it was done in send fund transaction.