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Creating a Core Lightning channel funded by JoinMarket

Software Version

bitcoin core: 0.21.0
core lightning: 0.11.1
joinmarket: 0.9.6

Step 1:

Start the open channel negotiation with a peer node, and get the funding address

lightning-cli fundchannel_start 036g....(target_node_public_key) 1000000(amount in satoshis) fee_rate true(public channel) return_address(pick an external address of joinmarket)

Step 2:

In joinmarket, create a PSBT that is funded by the joinmarket fund. Do Not Broadcast this transaction yet!

python sendpayment.py wallet.jmdat [-m 3](optional, the target mixdepth) -N 0 --psbt 0.01 (The amount to send in Bitcoin, must be equal to the amount of step 1) bc1qypf....(The funding address returned in step 1)

Step 3:

Complete the open channel negotiation with the peer node, get them to sign the commitment transaction, so that the funding transaction would then be safe to be broadcasted.

lightning-cli fundchannel_complete 036g....(target_node_public_key) "cHNidAbC...."(The signed PSBT returned in Step 2)

Step 4:

Finalize the PSBT to a raw transaction so that it can be broadcasted.

bitcoin-cli finalizepsbt "cHNidAbC...."(The signed PSBT returned in Step 2)

Optional Step:

Decode the raw transaction, make sure the txid is consistent with the funding_txid that lightningd is expecting.

bitcoin-cli decoderawtransaction "020000000001018....." (The raw transaction returned in Step 4)
lightning-cli listpeers

Step 5:

All preparations are done, broadcast the transaction, wait for 3 confirmations, and the channel will be open. When the channel is closed, your own balance would be returned to the JoinMarket address you specified in Step 1. Using this process, all your on-chain balances can be kept inside JoinMarket, and you don't need to worry about transfering fund between your lightning node and your JoinMarket wallet.

bitcoin-cli sendrawtransaction "020000000001018....." (The raw transaction returned in Step 4)
@openoms
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openoms commented Jun 29, 2022

Great guide, thank you!
Some notes:

  • make sure to note the external address specified in step 1 to avoid reuse. Might dedicate a mixdepth solely for this, but still need to keep track of the addresses used in the open channels. Could use Specter / Sparrow /Electrum to construct the PSBT and keep the custom labels.
  • The funds only return to the predefined address in case of a cooperative close. Funds from a force close are always destined to the internal wallet of CLN (or same with LND).

@openoms
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openoms commented Jul 4, 2022

If creating the PSBT in Sparrow convert it to the unpadded base64 format for signing with:
base64 -w 0 UNSIGNED.psbt

@openoms
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openoms commented Jul 4, 2022

Decode the raw transaction, make sure the txid is consistent with the funding_txid that lightningd is expecting.

The funding_txid is not known by lightningd yet, but need to check for the scriptpubkey returned in Step 1.

@BitcoinWukong
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BitcoinWukong commented Jul 6, 2022

The funding_txid is not known by lightningd yet, but need to check for the scriptpubkey returned in Step 1.

It would be known after fundchannel_complete is successfully executed. You can find the funding_txid in the output of the lightning-cli listpeers command. Specifically, you'll be able to see the "pending channel" that has a status of "waiting for 3 confirmations", and in that section, you should be able to see the funding_txid as a detail of that channel.

The reason we needed segwit for lighting is so that we could know funding_txid at this point, so that your counter party could sign their commitment transaction on top of this funding transaction. And only after we received their signature, the fundchannel_complete step is then completed, because we would be able to take back the fund if the counter went missing, we can now safely broadcast the funding transaction.

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