🔒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:

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.