Zero-Conf Channels

Zero-conf channels (also called turbo channels) allow Lightning channels to be used immediately after the funding transaction is broadcast, without waiting for blockchain confirmations.

The Confirmation Problem

Standard Lightning channel opening requires:

Broadcast funding transaction
Wait for 3-6 confirmations (30-60 minutes)
Channel becomes usable

Impact: Users must wait before they can send or receive payments through the new channel.

How Zero-Conf Works

Zero-conf channels allow immediate use by accepting unconfirmed funding:

Standard Channel:
Fund tx broadcast → Wait 3-6 blocks → Channel active

Zero-Conf Channel:
Fund tx broadcast → Channel active immediately
                  → Funds usable right away
                  → Confirmation happens in background

Trust Requirement

Zero-conf requires trusting the channel funder:

Single-funded: The funder could double-spend before confirmation
Dual-funded: More complex trust considerations
Receiving side trust: Recipient trusts funder won't double-spend

Use Cases

Lightning Service Providers (LSPs)

Most common use case:

User → LSP: "I want inbound liquidity"
LSP → User: Opens zero-conf channel
User: Can receive payments immediately
LSP: Trusts their own funding tx won't double-spend

The LSP trusts themselves (they created the funding tx).

Merchant Onboarding

Fast onboarding for new merchants:

1. Merchant requests channel
2. LSP opens zero-conf channel to merchant
3. Merchant can accept payments in seconds
4. No 1-hour wait for first customer

Mobile Wallets

Instant setup for mobile users:

1. User installs wallet
2. Wallet provider opens channel
3. User can receive immediately
4. Seamless first-time experience

Trust Model

Who Trusts Whom?

Scenario	Trust Required
LSP opens to user	LSP trusts itself
User opens to LSP	LSP trusts user (risky)
Peer-to-peer	Mutual trust needed

Risk Assessment

The receiver of zero-conf funds takes the risk:

Attack Vector:
1. Alice opens zero-conf channel to Bob
2. Bob accepts, provides service/goods
3. Alice double-spends funding tx
4. Channel never existed, Bob loses out

Mitigation: Only accept zero-conf from trusted parties (typically LSPs opening TO users).

Implementation

LND Configuration

# lnd.conf - Enable zero-conf channels
[protocol]
protocol.option-scid-alias=true
protocol.zero-conf=true

# Per-peer trust (open with --zero_conf flag)
lncli openchannel --node_key=<pubkey> --local_amt=100000 --zero_conf

Accepting Zero-Conf

# Configure which peers you trust for zero-conf
# In lnd.conf or via RPC

# Accept zero-conf from specific peer
lncli updatechanpolicy --zero_conf_accepted=true --chan_point=<chan_point>

SCID Alias

Zero-conf channels use SCID (Short Channel ID) aliases because they don't have a confirmed funding transaction to derive a real SCID:

Real SCID: block_height:tx_index:output_index
           (requires confirmation)

Alias SCID: Randomly generated
            (works before confirmation)

Feature Negotiation

Zero-conf requires both peers to support:

Feature Bit	Name	Purpose
44/45	option_scid_alias	Alias-based channel IDs
50/51	option_zeroconf	Zero-conf support

Channel Type

When opening a channel, request zero-conf:

Channel Type Bits:
- 12: static_remotekey
- 22: anchors_zero_fee_htlc_tx
- 50: option_zeroconf (zero-conf request)
- 44: option_scid_alias (required for zero-conf)

Limitations

No Forwarding

Zero-conf channels cannot forward payments until confirmed:

Before Confirmation:
- Can send through channel: Yes
- Can receive to channel: Yes
- Can route THROUGH channel: No

This prevents routing nodes from being exploited.

Confirmation Still Matters

Zero-conf doesn't eliminate confirmation need:

Funding tx must eventually confirm
If it doesn't confirm, channel fails
RBF attacks can invalidate channel

Maximum HTLC Limits

Until confirmed, prudent to limit HTLC sizes:

Unconfirmed: Limit HTLCs to small amounts
Confirmed: Full channel capacity available

Security Considerations

Double-Spend Attack

Most significant risk:

1. Attacker opens zero-conf channel
2. Victim accepts and provides value
3. Attacker broadcasts competing tx (double-spend)
4. Funding tx never confirms
5. Channel never existed

Defenses:

Only accept from trusted parties
Limit value at risk before confirmation
Monitor mempool for conflicts

RBF Concerns

Replace-By-Fee can replace the funding tx:

1. Attacker opens channel with low-fee funding tx
2. Victim accepts zero-conf
3. Attacker RBFs with different outputs
4. Channel funding invalidated

Mitigation: Ensure funding tx is not RBF-signaling (nSequence).

Best Practices

For LSPs

Only open TO users: Don't accept zero-conf from untrusted peers
Monitor funding txs: Watch for conflicts in mempool
Limit exposure: Cap zero-conf channel sizes
Fast confirmation: Use appropriate fees for quick confirmation

For Users

Trust your LSP: Only use reputable providers
Small channels first: Don't open huge zero-conf channels
Verify confirmation: Monitor that channel eventually confirms

For Developers

Implementation Checklist:
□ Support option_scid_alias
□ Support option_zeroconf  
□ Implement alias-based routing
□ Disable forwarding until confirmed
□ Monitor funding tx status
□ Handle confirmation failures gracefully

Flow Diagram

Zero-Conf Channel Open:

User                    LSP
  │                      │
  │───Request channel───>│
  │                      │
  │<──Accept (zero-conf)─│
  │                      │
  │<──Funding tx created─│
  │                      │
  │<──Channel active!────│  (no wait)
  │                      │
  │   Use channel...     │
  │                      │
  │   (Meanwhile...)     │
  │                      │
  │<──Funding confirmed──│  (background)
  │                      │
  │   Full functionality │

Comparison

Aspect	Standard	Zero-Conf
Time to use	30-60 min	Seconds
Trust needed	None	Yes (funder)
Can forward	Yes	After confirm
Double-spend risk	None	Yes
Best for	Peer-to-peer	LSP services

Summary

Zero-conf channels provide:

Instant usability: No waiting for confirmations
Better UX: Seamless onboarding experience
LSP friendly: Perfect for liquidity providers
Trust trade-off: Speed in exchange for trust assumption

When to Use Zero-Conf

Good fit:

LSP opening channel to user
Merchant onboarding via trusted provider
Mobile wallet initial setup

Poor fit:

Peer-to-peer with strangers
Large channel amounts
When you're the one providing value upfront

Channels - Channel lifecycle
Anchor Outputs - Modern channel format