Bi-Directional Payment Channel

Bi-directional payment channels allow participants Alice and Bob to repeatedly transfer Ether off chain.

Payments can go both ways, Alice pays Bob and Bob pays Alice.

// SPDX-License-Identifier: MIT
pragma solidity ^0.6.10;
pragma experimental ABIEncoderV2;

Opening a channel
1. Alice and Bob fund a multi-sig wallet
2. Precompute payment channel address
3. Alice and Bob exchanges signatures of initial balances
4. Alice and Bob creates a transaction that can deploy a payment channel from
   the multi-sig wallet

Update channel balances
1. Repeat steps 1 - 3 from opening a channel
2. From multi-sig wallet create a transaction that will
   - delete the transaction that would have deployed the old payment channel
   - and then create a transaction that can deploy a payment channel with the
     new balances

Closing a channel when Alice and Bob agree on the final balance
1. From multi-sig wallet create a transaction that will
   - send payments to Alice and Bob
   - and then delete the transaction that would have created the payment channel

Closing a channel when Alice and Bob do not agree on the final balances
1. Deploy payment channel from multi-sig
2. call challengeExit() to start the process of closing a channel
3. Alice and Bob can withdraw funds once the channel is expired

import "";
import "";

contract BiDirectionalPaymentChannel {
    using SafeMath for uint;
    using ECDSA for bytes32;

    event ChallengeExit(address indexed sender, uint nonce);
    event Withdraw(address indexed to, uint amount);

    address payable[2] public users;
    mapping(address => bool) public isUser;

    mapping(address => uint) public balances;

    uint public challengePeriod;
    uint public expiresAt;
    uint public nonce;

    modifier checkBalances(uint[2] memory _balances) {
            address(this).balance >= _balances[0].add(_balances[1]),
            "balance of contract must be >= to the total balance of users"

    // NOTE: deposit from multi-sig wallet
        address payable[2] memory _users,
        uint[2] memory _balances,
        uint _expiresAt,
        uint _challengePeriod
    ) public payable checkBalances(_balances) {
        require(_expiresAt > block.timestamp, "Expiration must be > now");
        require(_challengePeriod > 0, "Challenge period must be > 0");

        for (uint i = 0; i < _users.length; i++) {
            address payable user = _users[i];

            require(!isUser[user], "user must be unique");
            users[i] = user;
            isUser[user] = true;

            balances[user] = _balances[i];

        expiresAt = _expiresAt;
        challengePeriod = _challengePeriod;

    function verify(
        bytes[2] memory _signatures,
        address _contract,
        address[2] memory _signers,
        uint[2] memory _balances,
        uint _nonce
    ) public pure returns (bool) {
        for (uint i = 0; i < _signatures.length; i++) {
            NOTE: sign with address of this contract to protect
                  agains replay attack on other contracts
            bool valid = _signers[i] ==
                keccak256(abi.encodePacked(_contract, _balances, _nonce))

            if (!valid) {
                return false;

        return true;

    modifier checkSignatures(
        bytes[2] memory _signatures,
        uint[2] memory _balances,
        uint _nonce
    ) {
        // Note: copy storage array to memory
        address[2] memory signers;
        for (uint i = 0; i < users.length; i++) {
            signers[i] = users[i];

            verify(_signatures, address(this), signers, _balances, _nonce),
            "Invalid signature"


    modifier onlyUser() {
        require(isUser[msg.sender], "Not user");

    function challengeExit(
        uint[2] memory _balances,
        uint _nonce,
        bytes[2] memory _signatures
        checkSignatures(_signatures, _balances, _nonce)
        require(block.timestamp < expiresAt, "Expired challenge period");
        require(_nonce > nonce, "Nonce must be greater than the current nonce");

        for (uint i = 0; i < _balances.length; i++) {
            balances[users[i]] = _balances[i];

        nonce = _nonce;
        expiresAt = block.timestamp.add(challengePeriod);

        emit ChallengeExit(msg.sender, nonce);

    function withdraw() public onlyUser {
            block.timestamp >= expiresAt,
            "Challenge period has not expired yet"

        uint amount = balances[msg.sender];
        balances[msg.sender] = 0;

        (bool sent, ) ={value: amount}("");
        require(sent, "Failed to send Ether");

        emit Withdraw(msg.sender, amount);

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