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Flow

Flow of the Proposed System​

  • A system that can be used by providers and customers with only an L1 wallet.
  • This system operates Hydra Head using an ESCROW L1 wallet managed by a third party for transaction purposes.
    • While Hydra is open, L1 UTXOs are locked, but the impact is minimized through ESCROW.
    • Prevents malicious transaction invalidation through forced aborts by Hydra Head participants.

Flow Diagram​

Flow Diagram

1. Transfer to ESCROW Wallet​

The customer transfers funds from their Cardano L1 wallet to the customer-specific ESCROW L1 wallet.
The provider registers their receiving L1 wallet with the system.

2. COMMIT​

A Hydra Head composed of the ESCROW L1 wallets of the customer and provider is initialized and opened.
From this point, the ESCROW wallet is locked on L1 until the Hydra Head is closed or aborted.

3. Service Usage​

The customer uses the provider's paid service (e.g., spinning a gacha).

4. Notification of Service Usage Results​

The customer notifies the bypp IoT solution of the service they consumed.

5. Payment Instruction​

The bypp IoT solution instructs a payment from the customer's L2 wallet to the provider's L2 wallet.

6. L2 Transaction​

An L2 transaction is executed, transferring funds from the customer's L2 wallet to the provider's L2 wallet.

7. Update of Results and Latest Status​

After the L2 transaction is completed, the latest state is reflected in the bypp IoT solution.

8, 9. Reflection from L2 to L1​

The Hydra Head is closed, and the results of the L2 processing are reflected on L1.

10. Withdrawal of Funds​

After the results are reflected on L1, payments are made to the provider's registered L1 wallet at a specific or optional timing.