2. Retrospective of constructions

The CoinPool design builds on the research of Bitcoin Protocol Development community.

Lightning Network demonstrated the capabilities of Bitcoin off-chain protocols: it’s a network of interconnected bi-directional payment channels. The disadvantage of the LN is the complexity of routing payments and resulting low funds velocity.

Channel Factories were proposed to optimize establishing/closing the payment channels by batching them across many users and channels. The downside is substantial on-chain footprint every time a single channel is closed.

Joinpool utilizes Taproot tree to encode withdraw capabilities of several participants owning a single UTXO, although balance changes have to happen on-chain.

Radixpool allowed off-chain balances changes in a pooled construction. It assumes collocating participants in radix branches, which restricts the computational space. The disadvantage is requiring users of the same radix to rely on each other for leaving the pool.

CoinPool was proposed in mid-2020 resulting from discussions at Chaincode Labs and around.