TTC Protocol: Tondi Transaction Channel – A RGB-Native Off-Chain Channel for Scalable, Private, and Compliant Bitcoin Settlements

I. Project Overview

TTC (Tondi Transaction Channel), developed by Avato Labs, is an innovative off-chain protocol designed as a modern evolution of the Lightning Network (LN). Built natively for RGB ecosystems, TTC enables high-frequency, multi-asset transactions with enhanced privacy, reduced on-chain footprint, and built-in compliance features. By leveraging Tondi's high-performance DAG chain as the anchoring layer and RGBX's client-side validation, TTC addresses LN's limitations while preserving its core strengths in off-chain scalability.

TTC positions itself as a RGB-native channel protocol, facilitating instant, low-cost interactions for payments, asset swaps, and complex contracts. It supports seamless integration with BTC Taproot, RGB tokens, NFTs, and DAOs, making it ideal for Web3 applications requiring speed, privacy, and regulatory adaptability. Unlike LN's focus on simple BTC payments, TTC unlocks multi-dimensional state management, positioning it as a foundational L2.2 layer in the Tondi ecosystem.

II. Design Philosophy: Off-Chain Efficiency with RGB Purity

TTC draws from LN's bidirectional channel model but aligns deeply with RGB's principles: client-side execution, minimal on-chain commitments, and verifiable privacy. The philosophy emphasizes:

• Simplicity and Security: Use Taproot-only (P2TR) structures to minimize script complexity and attack surfaces.

• User Sovereignty: Eliminate the need for constant online presence through cryptographic proofs and delayed reveals.

• Performance Optimization: Achieve millisecond latencies via local validations and aggregated settlements.

• Compliance Balance: Incorporate selective disclosure without compromising default anonymity.

• Ecosystem Synergy: Integrate with RGBX for contract support and Tondi for high-throughput anchoring, avoiding LN's silos.

This approach critiques LN's coupled state management, which burdens users with watchtowers and exposes paths to analysis, while TTC decouples validation for true decentralization.

III. Core Principles of the Lightning Network (LN)

To contextualize TTC, we first outline LN's architecture as a reference prototype:

LN excels in reducing on-chain load for micropayments but introduces complexities in management and compatibility.

IV. Limitations of the Lightning Network

Despite its innovations, LN has notable drawbacks that TTC aims to overcome:

These flaws highlight LN's BTC-centric design, which TTC transcends for a RGB-native future.

V. TTC Design Goals and Core Improvements

TTC inherits LN's off-chain efficiency but introduces breakthroughs for RGB compatibility:

Inherited Elements from LN

TTC builds on LN's proven mechanics:

Key Improvements Over LN

TTC directly addresses LN's weaknesses:

VI. Technical Architecture

TTC's architecture fuses LN's channel model with RGBX's client-side features:

• Channel Establishment: Parties create a P2TR funding output on Tondi, committing initial RGB states via hash seals.

• State Updates: Off-chain negotiations produce signed commitments; each update generates a Merkle-proofed seal, ensuring non-revocable progression without watchtowers.

• Multi-Asset Handling: States support vectors of RGB assets (e.g., tokens + NFTs); validations use AluVM locally.

• Routing and Relays: Client-side relays for multi-hop; optional ZK proofs mask paths.

• Closure and Settlement: Aggregate updates into a single RGB seal; submit to Tondi for final anchoring. Schnorr batching optimizes fees.

• Privacy and Compliance: All interactions as commitments; viewing keys enable selective reveals for audits.

Performance Metrics: Millisecond latencies for updates; <1s settlements on Tondi; 95% on-chain reduction via aggregation.

VII. Positioning in the Ecosystem (Integration with RGBX and Tondi)

TTC fits as a layered extension:

This stack enables end-to-end RGB flows: off-chain via TTC, anchored on Tondi.

VIII. Core Application Scenarios

1. Avato Chat RGB Red Envelope System:

   • Establish temporary RGB token channels for instant red envelopes.

   • Recipients claim offline; aggregate 100+ transactions into one RGB seal for Tondi submission.

2. NFT Channel Swaps:

   • Peer-to-peer NFT ownership transfers via TTC.

   • Dual-signed seals create unified commitments; anchor once, saving 95% on-chain space.

3. DAO Off-Chain Voting:

   • Aggregate votes as seals in channels.

   • Anchor result hashes; optional RGB audits or ZK disclosures for transparency.

IX. Conclusion: TTC as a Superior, RGB-Native Alternative to LN

TTC redefines off-chain channels for the RGB era, blending LN's efficiency with modern enhancements:

TTC empowers a scalable, private Bitcoin future. We invite collaborators to advance this protocol toward widespread adoption.