Settlement Intents (BIP322)

Arkd settlement intents coordinate batch swaps and VTXO renewal. They are distinct from Arkade Intents, the application-level payment and exchange protocol.

When a user wants to settle funds onchain through a batch swap, they submit a settlement intent to the operator. Settlement intents are valid-but-unmineable Bitcoin transactions that encode an ownership proof of the inputs a user wants to redeem - whether it’s offchain VTXOs, an onchain UTXO or recoverable VTXOs (i.e. expired outputs) - and define the outputs they wish to receive. Settlement intents are based on BIP322, a standardized Bitcoin message signing protocol. The system was introduced with the v0.7.0 arkd release.

The usage of BIP322 enables users to choose between renewing their expiring offchain funds themselves or delegating the renewal of such VTXOs. The delegated intent workflow can be found under Settlement Intent Delegation

Intent Structure

The intent schema expresses what is being spent and where it goes. Its top-level fields include the Receiver format (onchain address or offchain public key) and the IntentMessage execution parameters and validity window.

Intent structure

The Intent domain is a user-submitted presigned Bitcoin transaction that:

Contains an IntentId (UUID)
Specifies the Inputs (VTXOs, UTXOs, or expired coins)
Specifies the Outputs (via Receivers). Either:
- onchain (via OnchainAddress)
- offchain (via PubKey to create new VTXOs)
Contains a Proof of ownership of those funds via a BIP322 signature
Contains a Message (BIP322 message) with intent details

type Intent struct {
    Id        string
    Inputs    []Vtxo
    Receivers []Receiver
    Proof     string
    Message   string
    Txid      string
    // hex-encoded extension OP_RETURN script to be added as output of the vtxo tree leaf transaction
    LeafTxExtension string
}

Receiver Structure

Receivers is defined via an Amount, an OnchainAddress, and a PubKey. At least one of OnchainAddress and PubKey must be present at submission. They construct Arkade transaction outputs or direct onchain payments.

type Receiver struct {
    Amount         uint64
    OnchainAddress string // onchain
    PubKey         string // offchain
}

IntentMessage Format

IntentMessage contains intent details in JSON structure:

The Type indicates if the intent is for renewal or ownership proof to delete another
OnchainOutputIndexes: Indicates which outputs become onchain outputs; the others become virtual outputs
ValidAt: Time (seconds) when the intent becomes valid; 0 = valid right away
ExpireAt: Time (seconds) when the intent expires; 0 = no expiry
CosignersPublicKeys: Public keys signing the virtual transaction tree; typically one, but can be more to support flexible user needs

type RegisterMessage struct {
    BaseMessage
    // OnchainOutputIndexes specifies what are the outputs in the proof tx
    // that should be considered as onchain by the Ark operator
    OnchainOutputIndexes []int `json:"onchain_output_indexes"`
    // ValidAt is the timestamp (in seconds) at which the proof should be considered valid
    // if set to 0, the proof will be considered valid indefinitely or until ExpireAt is reached
    ValidAt int64 `json:"valid_at"`
    // ExpireAt is the timestamp (in seconds) at which the proof should be considered invalid
    // if set to 0, the proof will be considered valid indefinitely
    ExpireAt int64 `json:"expire_at"`
    // CosignersPublicKeys contains the public keys of the cosigners
    // if the outputs are not registered in the proof or all the outputs are onchain, this field is not required
    // it is required only if one of the outputs is offchain
    CosignersPublicKeys []string `json:"cosigners_public_keys"`
}

Intent Lifecycle

The batch swap lifecycle, coordinated over the GetEventStream RPC:

Create a BIP322 Signature

Intents use BIP322 message signing protocol for proving ownership of coins.

Code example: BIP322 signature implementation from the TS-SDK

export function create(
  message: string | Message,
  ins: (TransactionInput | ExtendedCoin)[],
  outputs: TransactionOutput[] = []
): Proof {
  if (typeof message !== "string") {
    message = encodeMessage(message);
  }

  if (ins.length == 0)
    throw new Error("intent proof requires at least one input");
  const inputs = ins.map(prepareCoinAsIntentProofInput);
  if (!validateInputs(inputs)) throw new Error("invalid inputs");
  if (!validateOutputs(outputs)) throw new Error("invalid outputs");

  // create the initial transaction to spend
  const toSpend = craftToSpendTx(message, inputs[0].witnessUtxo.script);

  // create the transaction to sign
  return craftToSignTx(toSpend, inputs, outputs);
}

Source: TS-SDK

The create function takes a string message for the associated Register or Delete action.

Register an Intent

The core of intent registration is the RegisterIntentRequest which contains a Bip322Signature field and an intent message:

Code example: RegisterIntentRequest

message RegisterIntentRequest {
// BIP322 signature embeds the outpoints to be spent and new ones to be created, as well as the
// the proof of funds.
Bip322Signature intent = 1;
}
message RegisterIntentResponse {
string intent_id = 1;
}

Intent message format

The intent message structure includes:

InputTapTrees - Taproot trees for spent inputs
OnchainOutputIndexes - Which outputs should be considered onchain
ValidAt/ExpireAt - Timestamp validity windows
CosignersPublicKeys - Required for offchain outputs

Messages are JSON string encoded with a static format, making the order of the fields relevant

Example: intent message

const message: Intent.RegisterMessage = {
  type: "register",
  onchain_output_indexes: onchainOutputsIndexes,
  valid_at: validAt ? Math.floor(validAt) : 0,
  expire_at: 0,
  cosigners_public_keys: cosignerPubKeys,
};

Source: Typescript SDK

The server then responds with a RegisterIntentResponse containing an intent_id string for tracking.

Confirm Registration

After receiving a BatchStartedEvent containing their intent ID hash, clients must call ConfirmRegistration with a ConfirmRegistrationRequest containing the intent_id to confirm participation. The server responds with an empty ConfirmRegistrationResponse.

Delete Intent

The DeleteIntent method accepts a DeleteIntentRequest with a Bip322Signature proof that demonstrates ownership of any input VTXOs from the original intent. The server responds with an empty DeleteIntentResponse upon successful deletion.

Code example: delete from Typescript SDK

const message: Intent.DeleteMessage = {
  type: "delete",
  expire_at: 0,
};

Source: Typescript SDK

Recovery Mechanisms

The operator request system provides additional options for edge cases like recoverable virtual outputs:

Expired virtual outputs: recover unspent and swept outputs (recoverVtxos)
Sub-dust virtual outputs: amounts below the Bitcoin dust threshold

Virtual Mempool

Arkade Script

Settlement Intents (BIP322)

Intent Structure

Intent Lifecycle

Create a BIP322 Signature

Register an Intent

Confirm Registration

Delete Intent

Recovery Mechanisms

​Intent Structure

​Intent Lifecycle

Create a BIP322 Signature

Register an Intent

Confirm Registration

Delete Intent

​Recovery Mechanisms

Intent Structure

Intent Lifecycle

Recovery Mechanisms