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name: lightning-submarine-swaps description: | Submarine swaps: atomic on-chain ↔ Lightning conversions via shared HTLC preimage. Boltz protocol, Loop protocol, Peerswap (P2P), trustless variants with adaptor signatures. Boltz swaps are offline (suspended 2026-08-03); Loop, Peerswap and Blockstream Swaps (beta) are the live options as of September 2026. USE WHEN: building swap services, integrating with Loop / Peerswap / Blockstream Swaps, reading Boltz as a protocol reference, designing trust-minimized swap flows. allowed-tools: Read, Grep, Glob

Submarine Swaps

A submarine swap atomically converts between on-chain BTC and Lightning BTC (or vice versa) using a single shared preimage that reveals one side, allowing the other side to claim.

Atomicity primitive

Both sides commit to same hash H = SHA256(P) (or scalar T = t*G for PTLC).
Side 1 claims: requires P (or t).
Side 2 claims: refundable after timeout, or claimable with P (or t).

Whoever moves first reveals P → other side can immediately claim.
Either both legs settle, or both refund.

Service status (September 2026)

Service	Status as of 2026-09-15	Notes
Boltz	Offline since 2026-08-03	All mainchain, Lightning and Liquid swaps disabled "until further notice"; EVM-side swaps (USDT, USDC, TBTC, WBTC, RBTC) went first, on 2026-08-01.
Loop (Lightning Labs)	Operating	lightninglabs/loop v0.35.0-beta, released 2026-08-25.
Peerswap	Operating, Bitcoin only	v7.0.1 (2026-09-07) rejects new L-BTC swap requests in both directions after a Liquid Network security incident; Bitcoin swaps unchanged.
Blockstream Swaps	Beta since 2026-08-10	In-house swaps feature for the Lightning and Liquid networks; beta testing with select participants, access by request.

Boltz cited months of "automated, AI-assisted probing" of its infrastructure and several exploits: attackers "iterate faster than a team our size can find and patch". Because the swap design is non-custodial, user funds were never at risk — Boltz absorbed the losses on its own liquidity, the refund API stayed up, and unilateral refunds never depended on Boltz infrastructure at all. On 2026-08-12 all three founders announced their departure, handing the project to an undisclosed group of Bitcoiners supplying capital and engineering; no relaunch date had been announced as of 2026-09-15.

Downstream integrators that lost swap functionality: ZEUS, Aqua (JAN3), Bull Bitcoin.

Practical consequence: the Boltz sections below stay as a protocol reference — the flows and script templates are unaffected by the outage — but do not plan a new integration against the live Boltz API until the service returns.

Boltz protocol

Boltz was the most widely integrated swap service until its 2026-08-03 suspension (see status above). Two flow types:

Boltz Reverse (LN → on-chain)

1. User generates preimage P, sends LN payment with H = SHA256(P) to
   Boltz.
2. Boltz holds the LN HTLC.
3. Boltz publishes on-chain HTLC at user's address, value =
   payment_amt - fee.
4. User claims on-chain HTLC by revealing P.
5. Boltz uses P to fulfill the LN HTLC.

Boltz Submarine (on-chain → LN)

1. User publishes on-chain HTLC paying Boltz (value = lightning_amt + fee).
2. Boltz pays user's LN invoice (which has H = SHA256(P)).
3. User claims their own LN payment with P.
4. Boltz uses P to claim the on-chain HTLC.

Boltz API: REST endpoints for quotes + swap construction (v2 current, v1 deprecated; docs at api.docs.boltz.exchange). Swap creation has been disabled since 2026-08-03.

Trustless variants (adaptor signatures)

Boltz / Loop are "service" submarine swaps — you trust the service to act honestly within the timeout window.

Trustless / scriptless variants use adaptor signatures:

• Both legs pre-signed with adaptor secrets.
• Same secret reveals both legs atomically.
• No HTLC scripts on chain (privacy).

PTLC-based swaps (Schnorr point-locked, BOLT proposal):

• LN side uses PTLCs.
• On-chain side uses adaptor sig.
• Same scalar t unlocks both.

Peerswap (P2P)

Peerswap enables direct peer-to-peer swaps without 3rd party:

• Two LN nodes who already have a channel can exchange channel liquidity for on-chain liquidity (or Liquid).
• No service fee; direct submarine swap protocol.

CLN plugin and LND-via-lncli plugin available. Swaps are only allowed with allowlisted peers, and the project still labels itself beta-grade.

As of Peerswap v7.0.1 (2026-09-07) new L-BTC swap requests are rejected in both directions — local RPC and incoming peer requests alike, and L-BTC is dropped from capability announcements — following a Liquid Network security incident. Bitcoin swaps are unchanged. Recovery of already-persisted Liquid swaps stays enabled but is not guaranteed.

Boltz-specific features

Offline along with the rest of the service as of 2026-09-15; listed here because they define the feature surface a returning Boltz (or a replacement) is expected to cover.

• Liquid swaps — Boltz also supports BTC ↔ Liquid Bitcoin (LBTC) swaps.
• Refund tool: pre-signed refund tx in case Boltz disappears before completing. This is the path that held during the 2026-08 suspension — the refund API stayed live, and the unilateral refund does not need Boltz at all.
• Boltz Pro — enterprise features.

Use cases

• Mobile wallets rebalancing (Phoenix, Mutiny use submarine swaps internally).
• LSPs for liquidity management.
• Manual rebalancing of public Lightning nodes.
• Bridge to L2 — swap BTC ↔ Liquid ↔ Taproot Assets.

Limits and fees

• Service fees: 0.1% - 1% typical.
• Minimum swap: usually 50,000 sats.
• Maximum swap: limited by service liquidity (~1-10 BTC).

Common bugs

• HTLC timeout race: fee spike causes on-chain HTLC to confirm late; pre-signed refund tx not yet broadcastable → loss possible. Mitigation: always pre-build and sign refund tx with high fee buffer.
• Channel close during swap: counterparty force-closes the LN side, swap leg becomes unreliable.
• Fee assumption wrong → swap rejected by service.

See also

• loop-pool-lit/SKILL.md
• ../../cryptography/adaptor-sigs/SKILL.md
• ../../privacy/atomic-swaps/SKILL.md