Full Mesh Inter-Ledger Banking Protocol

Endpoint

An end user on a single ledger, connected to one hub through a payment channel.

Hub

Serves local endpoints. Maintains direct relationships with other hubs for routing.

Connector

A hub that holds accounts on two or more ledgers. A role, not a separate node.

Every cross-ledger payment is Endpoint → Hub → Hub → Endpoint. Hops 1 and 3 are always intra-ledger channels. Only hop 2 crosses a ledger boundary, and at least one of those hubs must be a connector.

When sender and receiver share a ledger and a hub, the path collapses to two hops: endpoint → hub → endpoint.

• Multiple concurrent conditional payments (PREPAREs) in a channel.
• Resolve each payment by preimage (commit) or authorized signature / timeout (cancel).
• Cancel-beats-commit: once a cancel is authorized, a prior commit cannot override it.
• Atomic channel updates with sequenced commitments.

Payment amount N. Hop 1: Alice promises N, the hub deposits N, the hub can cancel. Hop 2: hub₁ promises N, hub₂ deposits 3N, hub₂ can cancel. That 3N equals Alice, hub₁’s deposit, and hub₁’s promise — 1 : 1 : 1. Hop 3: hub promises N, receiver deposits 0, timeout only.

Whoever can cancel has locked as much as everyone else combined. Griefing is economically irrational. A timeout exists only on the final hop.

The sender’s hub quotes source amount, destination amount, fees, and the rate before any hold is created. Once prepare begins, amounts are fixed. The connector absorbs conversion and bears rate risk for a short window — there are no chained timeouts.

If a connector cannot commit at the quoted rate, the payment cancels on the normal path.

1. Receiver generates a preimage and sends the hash to the sender.
2. Sender requests a quote from Hub₁ and accepts or rejects it.
3. Prepare forward: hop 1, hop 2, hop 3.
4. Commit backward: receiver reveals the preimage; each hop resolves.
5. Or cancel: hop 3 times out, then Hub₂ and Hub₁ sign cancel.

Hubs accumulate bilateral debts from routing. Three-party novation clears them: if A owes B and B owes C, the debt is rerouted so A owes C, and B drops out. Novation uses the same protocol — staggered deposits, commit via preimage, cancel via timeout or signature.

A ledger may have several hubs. Two endpoints on the same ledger can still take three hops if they sit on different hubs — hop 2 is then intra-ledger. A connector is not a separate kind of node: it is a hub that holds accounts on two or more ledgers and so can be the party that pays hop 2 in the destination payment channel.