Anonymity-Enhancing Multi-Hop Locks for Monero-Enabled Payment Channel Networks

Payment Channel Networks (PCNs) are innovative second-layer scaling technologies that aim to improve transaction rates, reduce on-chain storage costs, and enable efficient atomic swaps for blockchain-based cryptocurrencies. Despite offering features like relationship anonymity, scriptless script, and cross-chain fairness, current PCNs encounter challenges in achieving identity anonymity and maintaining the fungibility of cryptocurrency units. PayMo, proposed in ESORICS’22, addresses payment anonymity but is limited to Monero, posing difficulties in extending it to a PCN framework. In response, this paper presents a novel Anonymity-Enhancing Multi-Hop Locks (AEMHL) mechanism for Monero-enabled PCNs. The AEMHL mechanism leverages our generic Linkable Ring Adaptor Signature (LRAS) construction and a minimalist PCN framework called anonymous multi-hop locks. This approach effectively combines privacy protection and simplicity while ensuring Monero’s fungibility without the need for specialized scripting support. Security properties, including atomicity, consistency, and anonymity-enhancement, are demonstrated using a universal composability model. Additionally, two optimized LRAS-based schemes are proposed to accommodate multi-hop locks construction in diverse scenarios. Through rigorous security analysis and performance evaluation, we confirm that AEMHL meets essential security objectives and provides efficient and practical solutions for privacy-conscious users within PCNs.