Anti-Collusion Multiparty Smart Contracts for Distributed Watchtowers in Payment Channel Networks

Leveraging watchtowers to monitor payment channel networks (PCNs) is regarded to be a promising option to ensure off-chain transaction security and boost cryptocurrency scalability. However, existing solutions have two major limitations: First, since the watchtower’s inaction or collusion with counterparties, the deposits in off-chain transactions will be threatened; Second, due to occasional false positives, the efficiency of the single watchtower in monitoring the payment channels for fraud is questionable. To solve this, we present anti-collusion multiparty smart contracts for distributed watchtowers in PCNs. Specifically, we first design the distributed watchtower mechanism to solve the false positive problem in regulating PCNs. In addition, we utilize smart contracts to constrain and force counterparties to relinquish collusion in the distributed watchtower mechanism, thus making collusion impossible for rational parties. We further offer a mathematical proof and contract implementation in Solidity. Finally, extensive experiments and contracts executed on Ethereum under various benchmarks with baseline comparison demonstrate the validity of our proposals. Specifically, our scheme can both improve the throughput and accuracy by up to 20-25% and 10-15%, respectively, and reduce the false positive rate by up to 10% compared with existing single watchtower mechanism.