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On-Chain Protocol Overview

The on-chain protocol defines the smart contract interfaces and data structures that form the foundation of Nitrolite's security guarantees. This layer operates on the blockchain and handles:

  • Fund Custody: Secure locking and unlocking of participant assets
  • Dispute Resolution: Challenge-response mechanism for disagreements
  • Final Settlement: Distribution of funds according to validated states
  • Channel Lifecycle: State transitions from creation to closure

Key Responsibilities​

The on-chain layer MUST provide:

  1. Deterministic channel identifiers computed from channel configuration
  2. Signature verification to authenticate state updates
  3. State validation through adjudicator contracts
  4. Challenge periods to ensure fair dispute resolution
  5. Fund safety guaranteeing users can always recover their assets
EVM Compatibility

The initial version of Nitrolite is designed for EVM-compatible blockchains including Ethereum, Polygon, Base, and other EVM chains. Support for additional networks is continuously expanding.

Contract Interfaces​

The protocol defines three primary contract interfaces:

  • IChannel: Core channel lifecycle operations (create, join, challenge, close)
  • IDeposit: Token deposit and withdrawal management
  • IChannelReader: Read-only queries for channel state and status

These interfaces are implemented by the Custody Contract, which serves as the main entry point for on-chain operations.

Next Steps​

The following sections detail: