How ILP Works
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Transcript of How ILP Works
![Page 1: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/1.jpg)
How It Works
Evan Schwartz & Stefan Thomas
ILP Packet, Addressing, Routing
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Ledgers Track Accounts and Balances
Sender RecipientLedger
2
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But Not Everyone Is on the Same Ledger
3
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Connectors Relay Money
Connector
Alice 100
Chloe 0
Chloe 110
Bob 0100 110
4
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Connectors Convert Currencies
Connector
Alice 100
Chloe 0
Chloe 110
Bob 0100 110
5
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How do we ask a connectorto pass on a payment?
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We Need a Way to Send Instructions to Connectors
Alice 100
Chloe 0
Chloe 110
Bob 0
7
Um, excuse me? ...hello there…? ZZZZZZ
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address: "us.wf.bob"
Interledger In One Slide
Hierarchical identifier
Decimal amountamount: "1023.20"
![Page 9: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/9.jpg)
us.wf.bob1023.20
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Sender Attaches Packet to Local Transfer
Alice 100
Chloe 0
Chloe 110
Bob 0100
10
us.wf.bob1023.20
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Connector Forwards the Packet via Another Transfer
Alice 0
Chloe 100
Chloe 110
Bob 0
11
us.wf.bob1023.20
110
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Paths Can Be Short
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Or Long
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Uh oh...
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Can we trust connectors?
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If Connectors Fail, Would We Lose Money?
Alice 100
Chloe 0
Chloe 110
Bob 0
?
100
16
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Holds Provide Security
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Ledgers Provide Hold Functionality
Alice 100
On Hold 0
Chloe 0
Chloe 110
On Hold 0
Bob 0
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Holds Are Dependent on Conditions + Expiries
19
EXECUTEROLLBACK
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Condition Fulfillment Executes Transfer
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EXECUTEROLLBACK
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Timeouts Cause Funds to Be Returned
21
EXECUTEROLLBACK
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address: "us.wf.bob"amount: "1023.20"expiry: "2016-07-06T09:00:10Z"condition: "cc:0:3:4a7DEpj8f9..."
Interledger In One Slide (Really)
Timestamp (ISO 8601)
Crypto Condition
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Funds Are Committed From Left to Right
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Alice 100
On Hold 0
Chloe 0
Chloe 110
On Hold 0
Bob 0
COMMITMENT
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Sender Puts Funds On Hold
Alice 100
On Hold 0
Chloe 0
Chloe 110
On Hold 0
Bob 0
100
24
us.wf.bob1023.20cc:0:3:4a...2016-07...
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Connector Gets Notification of Funds on Hold
Alice 0
On Hold 100
Chloe 0
Chloe 110
On Hold 0
Bob 0
25
us.wf.bob1023.20cc:0:3:4a...2016-07...
?
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Connector Puts Funds on Hold
Alice 0
On Hold 100
Chloe 0
Chloe 110
On Hold 0
Bob 0
26
us.wf.bob1023.20cc:0:3:4a...2016-07...
110?
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Recipient Gets Notification of Funds on Hold
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0
27
us.wf.bob1023.20cc:0:3:4a...2016-07...
? ?
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Recipient Triggers Payment by Fulfilling the Condition
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Transfers Are Executed Right to Left
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Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0
EXECUTION
? ?
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Recipient Signs Receipt
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0
30
? ?
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Signature Fulfills Condition, Ledger Releases Held Funds
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0110
31
?
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How Does the Connector Get Reimbursed?
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
32
?
?
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Connector is Notified That Funds Have Been Released
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
33
?
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Connector Passes on the Recipient’s Signature
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
34
?
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Receipt Releases Funds from Hold
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
35
100
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Sender Gets Non-Repudiable Proof of Payment
Alice 0
On Hold 0
Chloe 100
Chloe 0
On Hold 0
Bob 110
36
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37
COMMITMENT
Transfers Are Committed L2R, Executed R2L
EXECUTION
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(Now) Paths Can Be Short
38
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Or Long
39
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Or Long (And Still Secure)
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The Interledger
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address: "us.wf.bob"amount: "1023.20"expiry: "2016-07-06T09:00:10Z"condition: "cc:0:3:4a7DEpj8f9..."
Enabled By a Simple Packet Format
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How do those addresses work?
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address: "us.wf.bob"ledger account
Interledger Addresses
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address: "us.wf.bob.mary"ledger subledger
Interledger Addresses
account
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Connectors Convert Currencies
Connector
Alice 100
Chloe 0
Chloe 110
Bob 0100 110
46
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Where does this rate come from?
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Liquidity Curves Determine Exchange Rates
48
Connie
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Connectors Set Rates per Ledger Pair
49
Ledger A
Ledger B
Ledger C
Ledger DA ⇒ B
A ⇒ C
A ⇒ D
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Connectors Advertise Their Routes
50
A ⇒ BLedger Z Carmine
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Synthetic Routes Are Created
51
A ⇒ BZ ⇒ A
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Synthetic Routes Are Created
52
A ⇒ BZ ⇒ A
= Z ⇒ A ⇒ B
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And Added to the Routing Table
53
Z ⇒ A ⇒ B
Connie
Z ⇒ A ⇒ C
Connie
Z ⇒ A ⇒ D
Connie
![Page 54: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/54.jpg)
Routing Tables Grow Quickly
54
Z ⇒ A Local
Z ⇒ A ⇒ B
Connie
Z ⇒ A ⇒ C
Connie
Z ⇒ A ⇒ D
Connie
Z ⇒ C Local
Z ⇒ C ⇒ E Chao
Z ⇒ C ⇒ F Carl
![Page 55: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/55.jpg)
Autonomous Systems
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Core vs. Periphery
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Routing a Payment
us.wf.bob.car1023.20
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First We Route Up
us.wf.bob.car1023.20
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Then Across
us.wf
us.wf.bob.car1023.20
![Page 60: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/60.jpg)
Then Across
us.wf
us.wf.bob.car1023.20
![Page 61: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/61.jpg)
And Finally Down
us.wf
us.wf.bob.car1023.20
us.wf.bob
![Page 62: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/62.jpg)
And Finally Down
us.wf
us.wf.bob
us.wf.bob.carus.wf.bob.car1023.20
![Page 63: How ILP Works](https://reader030.fdocuments.in/reader030/viewer/2022021422/58ecf3e21a28abc0278b456f/html5/thumbnails/63.jpg)
Some Ledgers Aren't Real Ledgers
us.wf
us.wf.bob
us.wf.bob.car
us.*
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Questions?