To guarantee the safety of user funds, a watchtower/validator inscribes the state difference to bitcoin as a refundTx to safeguard user funds in case of liveness failure. This ensure the data availability of refund is guaranteed by the bitcoin blocks itself, ie. It uses bitcoin as a data availability layer to commit state difference transaction.
Some points to consider:
Inscription size of RefundTx is largely depended on number of accounts in the system = number of refund outputs.
Every refund output in the refundTx adds ~30vbytes
The size of the compressed refundTx can change based on ratio of compression.
The 4 byte identifier reduces the output size by 26 bytes per address.
Estimated fees in USD changes with BTC price and network fee rate. Calculations below assumes 36 sats/byte for the calculations. BTC/USD price and current fee rate in the network are variable parameters and will change fee in USD numbers.
This document assumes a bull case for Bitcoin. Assumptions may be different for a bear case.
What we don’t consider:
1. Consuming more than half the block space by other L2 projects will create fee pressure in the system, leading to much higher sats/byte
1
600
21600
14
585
21060
14
21
29
100
2760
99360
65
2748
98938
53
99
137
250
6015
216540
142
4768
171648
113
171
239
500
12015
432540
284
8970
322920
212
323
448
750
18866
679176
445
13170
474120
311
474
658
1000
24291
874476
572
17370
625320
411
625
868
For ~ 100 bitcoin blocks a day, we assume 100 inscriptions committing a state difference.
Per day cost of inscriptions for 100 inscriptions a day ~ $ 411 * 100 = $41,100
Per month cost if BTC/USD price remains the same = $41,100 *30 = $1,233,000
6 month estimate if price remains the same = $7,398,000
6 month estimate with BTC @ $100k and fee rate @ 36 sats/byte = $11,255,760
6 month estimate if fee rate rises to 50 sats/byte with BTC @100k = $15,633,000
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