Detect and Isolate an Adversary in Fakey and Griefing-R Attack on Lightning Network

Off-chain payment solutions, called layer-2 solutions, address scalability issues in the blockchain. They help to process transactions faster and reduce the computational cost of the blockchain. In the Lightning Network, the popular off-chain solution, multi-hop payment is performed using HTLCs. Two prominent attacks against HTLCs are the Fakey attack, where an adversary manipulates the payment key, and the Griefing-R attack, where an adversary refuses to provide the preimage of a payment hash to its predecessor node. Both these attacks exhaust channel capacities of routing nodes and lead to reduced throughput. We propose a scheme using cryptographic commitments and signatures that detects an adversary performing any of these attacks and punishes the adversary by isolating it from the network. We implement the proposed scheme using the LND implementation of the Lightning Network. Further, we analyze the correctness of the scheme.