sBTC Withdrawal - Diagram and Flow

[netrome]

Goal

Define the sBTC 1.0 withdrawal flows and provide illustrations for these

Proposed withdrawal flow

The main steps of this flow are as follows.

1. Withdrawal request: An sBTC holder calls the withdraw-request function in the .sbtc contract.
   • This transfers the requested amount of sBTC to the .sbtc contract.
2. Withdrawal accept: If accepted, the following happens
   2.1. The signers create a "Withdrawal accept" transaction on Bitcoin which returns the requested amount to the designated address.
   2.2. Once the Bitcoin transaction is confirmed, the Stacks node burns the equivalent amount of sBTC in the .sbtc contract.
   2.3. Finally, the signers prove to the chain that they have fulfilled their duty by calling the withdraw-accept function in the .sbtc contract.
3. Withdrawal reject: If instead the request is rejected, the sBTC signers will call the withdraw-reject function in the .sbtc smart contract. This function does the following:
   3.1. Returns the sBTC to the holder.
   3.2. Records the signer votes.

Finally, here is a summary of the necessary contract functions.

Function name	Parameters	Description
withdraw-request	(recipient_address, amount, max_fee)	Transfers amount of sBTC into the .sbtc contract and records the request to withdraw returning a unique request_id. Also records the maximum fee that the user may accept to pay for the withdrawal.
withdraw-accept	(request_id, bitcoin_txid, output_index, signer_bitmap)	Records that the signers have accepted a withdraw request. request_id identifies the request, bitcoin_txid and output_index together identify the Bitcoin UTXO returning the requested amount of BTC to the user. signer_bitmap records what each signer voted if this information is not already provided in the Bitcoin transaction
withdraw-reject	(request_id, signer_bitmap)	Records that the signers have rejected a withdraw request, transferring back the sBTC to the principal who made the request. Must contain a bitmap of how the signers have voted.

Discussion topics

• What problems do we see with the current proposals?
  • Can we simplify any part?
  • Do we see any security risks?
• Any alternative withdrawal flows we'd like to consider?
• How do we ensure the bitmap of the signer votes is accurate?

[netrome]

Updated the withdrawal flow to omit the envisioned consensus-breaking changes.