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NLock Explanation - CLTV Finance

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18 views2 pages

NLock Explanation - CLTV Finance

Uploaded by

feutry.lau
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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10/06/2024 19:31 NLock explanation | CLTV Finance

CLTV Finance

🔒 NLock explanation
Introduction:
We utilize the nLock Time functionality, originally developed by Satoshi Nakamoto for
Bitcoin, to securely manage transactions. This feature has been adapted to enhance the
handling of BRC20 tokens and other assets on the Bitcoin blockchain.
nLock Implementation in CLTV Finance:
CLTV.finance has pioneered a non-custodial staking method using simple Bitcoin
transactions enhanced with nLock Time. Introduced first by Fairlight Protocol, this
method capitalizes on the creation of a time-locked UTXO (Unspent Transaction Output)
that prevents the spending of a transaction until a specified block height is reached.
This innovative approach not only potentially reduces the circulating supply but also
allows participants to engage directly with the protocol, earning a share of the fees
generated.
A new script address, or smart wallet, is created based on three parameters:
The user’s wallet public address,
The public key,
The signature linked to the user’s wallet private key.
The CLTV.finance protocol sends a Partially Signed Bitcoin Transaction (PSBT) that
includes the user's BRC20 transaction and nLock details (specifying the block number
until which the new script address cannot spend the transaction). Once this block is
confirmed in the mempool, only the user's private key can unlock and spend the
transaction, thus allowing fund recovery.
Funds within the CLTV.finance protocol remain locked until a predetermined date due to
the script's nLock time, preventing premature withdrawals. After this date, users can
sign a transaction considering the block number, which allows them to access their
funds.
Further Applications of nLock Tool:
https://cltv-finance.gitbook.io/cltv-finance/nlock-explanation 1/2
10/06/2024 19:31 NLock explanation | CLTV Finance

The nLock function is set to transform market practices by making tokens from the
Liquidity Locking protocol increasingly scarce. We offer a unique and secure solution
that mandates project founders to lock their funds upon project initiation, combating
fraud and enhancing trust in the cryptocurrency landscape. The nLock function operates
flawlessly on Bitcoin Layer 1, offering unparalleled security without the risk of hacks,
thus ensuring a safer environment for the community and promoting a sustainable future
for cryptocurrencies.

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