Create P2PStateChannels.md

[lukastanisic99]

Project Abstract

Tech part of -
https://docs.google.com/document/d/1DcDFScgeXijnXSGuaa30uOnYNtRm_9OnAsM97igrSwA/

Grant level

• Level 1: Up to $10,000, 2 approvals
• Level 2: Up to $30,000, 3 approvals
• Level 3: Unlimited, 5 approvals (for >$100k: Web3 Foundation Council approval)

Application Checklist

• The application template has been copied and aptly renamed (project_name.md).
• I have read the application guidelines.
• Payment details have been provided (Polkadot AssetHub (DOT, USDC & USDT) address in the application and bank details via email, if applicable).
• I understand that an agreed upon percentage of each milestone will be paid in vested DOT, to the Polkadot address listed in the application.
• I am aware that, in order to receive a grant, I (and the entity I represent) have to successfully complete a KYC/KYB check.
• The software delivered for this grant will be released under an open-source license specified in the application.
• The initial PR contains only one commit (squash and force-push if needed).
• The grant will only be announced once the first milestone has been accepted (see the announcement guidelines).
• I prefer the discussion of this application to take place in a private Element/Matrix channel. My username is: @_______:matrix.org (change the homeserver if you use a different one)

[github-actions]

CLA Assistant Lite bot: Thank you for your submission, we really appreciate it. Like many open source projects, we ask that you sign our Contributor License Agreement before we can accept your contribution. Please submit the following text as a separate comment:

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[keeganquigley]

Thanks for the application @lukastanisic99 very interesting tech indeed. My only question is, the milestone states, "Everything is done". Does this mean everything has already been implemented, or just that the milestone spreadsheet is finished?

[lukastanisic99]

@keeganquigley Well we did do a lot of the work already, but it's not complete and there's still a lot of work to be done and even later on maintaining and improving the system. The one milestone proposed was intended to be on completion of our V1 alpha and when everything is runnable. We could break it down further into smaller milestone that we can claim before the alpha if that's what you're referring.

[semuelle]

@lukastanisic99, we recently updated our terms and template to include a flexible DOT amount, can you please update your document to include this? Please keep in mind that this is a rather large amount you are asking for, so the bigger the DOT share, the better.

[lukastanisic99]

@semuelle We're fine with taking 100% in DOT with 50% being vested over 2 years, if all the DOT goes through a vesting process then we'll have to do 50% DOT and 50% USDT. Before I update the doc, can you clarify can we chose the % of DOT that has to be vested (minimum 50%) or all DOT received has to be vested, forcing us to take a portion in stablecoin? Normally we wouldn't mind taking 100% in vested DOT, but we have immediate costs..

[semuelle]

Hi @lukastanisic99. Thanks for the quick reply. Currently, we only offer payment in fiat and stablecoins beside the vested (!) DOT portion. I will check internally if we can make an exception, but for now I would suggest we continue with this information.

[lukastanisic99]

Ok I've modified the doc to make the Milestone more clear (could break it down further if needed), added the USDT address on Asset Hub (same as DOT) and added the DOT % and indicated that we're willing to take 100% in DOT with 50% vested if that's possible. Maybe better to not squash future modifications so it's easier to keep track what has changed?

[keeganquigley]

Thanks @lukastanisic99 is there a chance that you'd be willing to come up with a proposal that is under $100k? As anything over this amount requires approval from the W3F council, and it could take a while to put it up for discussion. I will also say that we don't fund deliverables retroactively, so anything that has already been built could be removed from the milestone tables. Perhaps that would help to further reduce the scope/cost.

[lukastanisic99]

Hey @keeganquigley sure. I'll come up with a milestone that includes a minimal feature set so It's still runnable, but doesn't have all the features. I'll update the proposal later today or tomorrow. On the retroactive part - we did do some things (in private repos), we can always ctrl+A, delete and start from 0. Regardless that's not the point, there's still a lot of work to be done, so we'll try a figure out today a minimal set that works and update the proposal to reflect that, so we can continue and move on.

[keeganquigley]

Thanks @lukastanisic99 sounds good; you can always break it up and apply for subsequent grants down the line.

[lukastanisic99]

I've updated the proposal to be within budget and explained what's included in the milestone. Take a look and let me know what are the next steps.

[keeganquigley]

Sounds good @lukastanisic99 thanks for the changes. I will go ahead and mark the application as ready for review so other committee members can comment.

[takahser]

@lukastanisic99 feel free to have a look at my comments. Apart from that, I'm currently talking to W3F-internal researchers, will be back soon with additional feedback.

[lukastanisic99]

@takahser I've merged your recommendations and clarified the section around FTE

[burdges]

The performance hit to polkadot here is minimal since they'll run rarely, given the whole system is a state channel. In the longer term, I'll push cyril on the compiler side for this, but maybe he pivoted to targeting primarily polkavm over wasm, not sure.

[burdges]

Is it worth clarifying that the application's solidiy run primarily on the user's side here, in the optimimistic case?

[lukastanisic99]

Yes it runs on the users side. Only during a dispute, when proving an incorrect state transition, the same bytecode gets invoked on-chain.

[burdges]

I guess "fraud proof" is fine here, but mostly it just returns to running on-chain

[lukastanisic99]

Yes

[burdges]

At least in the obvious applciations, you could move everything back off-chain after doing the on-chain stuff resumting from a timeout claim. I'm not sure that optimization is worth the development costs though, exspecially if this rarely happens and everything eventually winds up compiled to polkavm.

[lukastanisic99]

Yes

[burdges]

Are the required to be linearly ordered? That's slightly more than what UTXOs do. It's also what you expect when doing full state. Assuming yes, anything else should proibably be future work.

[burdges]

We'll punt on this for now, because the simplest thing alraedy makes sense for initial applications.

[lukastanisic99]

yes

[lukastanisic99]

@keeganquigley can we use this link to KYB another entity we already have (same team)?

[keeganquigley]

@lukastanisic99 sure no problem, but in this case could you please update the team name on the application?

[lukastanisic99]

@keeganquigley updated the doc + all shareholders completed KYC

[keeganquigley]

Great thanks @lukastanisic99 I see it is pending now. Will let you know when we get a result, it can take up to three days but is usually faster.

[takahser]

Re-approving.

[keeganquigley]

Thanks @lukastanisic99 while waiting for KYB, could you also please add a Legal Entity section with the registered physical address as shown in the template? Thanks!

[lukastanisic99]

@keeganquigley done

[takahser]

Re-approving.

@lukastanisic99 please avoid force-pushing in case of future updates, to make it easier for us to review the changes. Note that the commits will be squashed anyway when merging to master.

[lukastanisic99]

@keeganquigley I've received an email that the KYB/KYC process in completed - double check on your end and let me know if there's anything else to do.

[keeganquigley]

Thanks @lukastanisic99 I can confirm it passed, so now just waiting on the last two approvals. I pinged the committee again w/ the status update.

[lukastanisic99]

@semuelle and @PieWol can you take a look - we have 3/5 approvals

[lukastanisic99]

@laboon @SBalaguer @aeronbuchanan @rrtti @PieWol can anyone take a look and approve since we have 4/5 and want to finish this?

[SBalaguer]

@lukastanisic99 I'm looking into it, should be able to provide feedback (if any) by end of day today.

[SBalaguer]

@lukastanisic99 forgive me if I missed this from the long previous discussion, but where are you planning on deploying the smart contracts for the on-chain part?

[lukastanisic99]

@SBalaguer just to clarify, this is a public good SDK/framework to develop and deploy pure p2p state channels as described above. As such, we don't impose any restrictions on developers where they should deploy (nor could we if we wanted to - permissionless). The contracts can run in any EVM, so we assume most people would deploy their contracts to Moonbeam, Astar or any parachain that implements the EVM pallet (which many if not most already do).

We also designed it to be VM agnostic so it can later support the PVM, but too early to cover that now.

[lukastanisic99]

@SBalaguer just to clarify, this is a public good SDK/framework to develop and deploy pure p2p state channels as described above. As such, we don't impose any restrictions on developers where they should deploy (nor could we if we wanted to - permissionless). The contracts can run in any EVM, so we assume most people would deploy their contracts to Moonbeam, Astar or any parachain that implements the EVM pallet (which many if not most already do).

We also designed it to be VM agnostic so it can later support the PVM, but too early to cover that now.

[lukastanisic99]

Sorry for the double comment - seems github mobile glitched out