[bitcoin-dev] [Lightning-dev] Full Disclosure: CVE-2023-40231 / CVE-2023-40232 / CVE-2023-40233 / CVE-2023-40234 "All your mempool are belong to us"

[Undescribed Horrific Abuse, One Victim & Survivor of Many]

On 10/17/23, ZmnSCPxj via bitcoin-dev
<bitcoin-dev at lists.linuxfoundation.org> wrote:
> Good morning Antoine et al.,
>
> Let me try to rephrase the core of the attack.
>
> There exists these nodes on the LN (letters `A`, `B`, and `C` are nodes,
> `==` are channels):
>
>     A ===== B ===== C
>
> `A` routes `A->B->C`.
>
> The timelocks, for example, could be:
>
>    A->B timeelock = 144
>    B->C timelock = 100
>
> The above satisfies the LN BOLT requirements, as long as `B` has a
> `cltv_expiry_delta` of 44 or lower.
>
> After `B` forwards the HTLC `B->C`, C suddenly goes offline, and all the
> signed transactions --- commitment transaction and HTLC-timeout transactions
> --- are "stuck" at the feerate at the time.
>
> At block height 100, `B` notices the `B->C` HTLC timelock is expired without
> `C` having claimed it, so `B` forces the `B====C` channel onchain.
> However, onchain feerates have risen and the commitment transaction and
> HTLC-timeout transaction do not confirm.
>
> In the mean time, `A` is still online with `B` and updates the onchain fees
> of the `A====B` channel pre-signed transactions (commitment tx and
> HTLC-timeout tx) to the latest.
>
> At block height 144, `B` is still not able to claim the `A->B` HTLC, so `A`
> drops the `A====B` channel onchain.
> As the fees are up-to-date, this confirms immediately and `A` is able to
> recover the HTLC funds.
> However, the feerates of the `B====C` pre-signed transactions remain at the
> old, uncompetitive feerates.
>
> At this point, `C` broadcasts an HTLC-success transaction with high feerates
> that CPFPs the commitment tx.
> However, it replaces the HTLC-timeout transaction, which is at the old, low
> feerate.
> `C` is thus able to get the value of the HTLC, but `B` is now no longer able
> to use the knowledge of the preimage, as its own incoming HTLC was already
> confirmed as claimed by `A`.
>
> Is the above restatement accurate?
>
> ----
>
> Let me also explain to non-Lightning experts why HTLC-timeout is presigned
> in this case and why `B` cannot feebump it.
>
> In the Poon-Dryja mechanism, the HTLCs are "infected" by the Poon-Dryja
> penalty case, and are not plain HTLCs.
>
> A plain HTLC offerred by `B` to `C` would look like this:
>
>     (B && OP_CLTV) || (C && OP_HASH160)
>
> However, on the commitment transaction held by `B`, it would be infected by
> the penalty case in this way:
>
>     (B && C && OP_CLTV) || (C && OP_HASH160) || (C && revocation)
>
> There are two changes:
>
> * The addition of a revocation branch `C && revocation`.
> * The branch claimable by `B` in the "plain" HTLC (`B && OP_CLTV`) also
> includes `C`.
>
> These are necessary in case `B` tries to cheat and this HTLC is on an old,
> revoked transaction.
> If the revoked transaction is *really* old, the `OP_CLTV` would already
> impose a timelock far in the past.
> This means that a plain `B && OP_CLTV` branch can be claimed by `B` if it
> retained this very old revoked transaction.
>
> To prevent that, `C` is added to the `B && OP_CLTV` branch.
> We also introduce an HTLC-timeout transaction, which spends the `B && C &&
> OP_CLTV` branch, and outputs to:
>
>     (B && OP_CSV) || (C && revocation)
>
> Thus, even if `B` held onto a very old revoked commitment transaction and
> attempts to spend the timelock branch (because the `OP_CLTV` is for an old
> blockheight), it still has to contend with a new output with a *relative*
> timelock.
>
> Unfortunately, this means that the HTLC-timeout transaction is pre-signed,
> and has a specific feerate.
> In order to change the feerate, both `B` and `C` have to agree to re-sign
> the HTLC-timeout transaction at the higher feerate.
>
> However, the HTLC-success transaction in this case spends the plain `(C &&
> OP_HASH160)` branch, which only involves `C`.
> This allows `C` to feebump the HTLC-success transaction arbitrarily even if
> `B` does not cooperate.
>
> While anchor outputs can be added to the HTLC-timeout transaction as well,
> `C` has a greater advantage here due to being able to RBF the HTLC-timeout
> out of the way (1 transaction), while `B` has to get both HTLC-timeout and a
> CPFP-RBF of the anchor output of the HTLC-timeout transaction (2
> transactions).
> `C` thus requires a smaller fee to achieve a particular feerate due to
> having to push a smaller number of bytes compared to `B`.
>
> Regards,
> ZmnSCPxj
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