BxTB: cross-chain exchanges of bitcoins for all Bitcoin wrapped tokens

Abstract

While it is possible to exchange tokens whose smart contracts are on the same blockchain, cross-exchanging bitcoins for a Bitcoin wrapped token is still cumbersome. In particular, current methods of exchange are still custodial and perform privacy-threatening controls on the users in order to operate. To solve this problem we present BxTB: cross-chain exchanges of bitcoins for any Bitcoin wrapped tokens. BxTB lets users achieve that by bypassing the mint-and-burn paradigm of current wrapped tokens and cross-exchanging already minted tokens in a P2P way. Instead of relaying on HTLCs and the overhead of communication and slowness due to time-locks, we leverage Stateless SPVs, i.e. proof-of-inclusion of transactions in the Bitcoin chain validated through a smart contract deployed on the other blockchain. Furthermore, since this primitive has not been introduced in the academic literature yet, we formally introduce it and we prove its security.