max.md

Got it. Here’s the final full Markdown spec in English, expanded with additional details, examples, and diagrams so another model (or developer) could fully grasp XLN’s architecture, primitives, and why it’s revolutionary.

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📜 XLN Specification — Unified Financial Internet

Philosophy and Terminology

XLN (Extended Lightning Network) is a unified protocol for the Financial Internet. Its foundation: the world can be modeled as a composition of deterministic state machines that interact in a perfect dance.

Three machine layers (J–E–A): • Jurisdiction Machine (J, or GA) • Generalized RTGS + Central Bank. • In DeFi terms: equivalent to Layer 1. • Holds reserves and collateral only. • Limited throughput (≤30 TPS, ≤1GB/day) but ultimate anchor of truth. • Entity Machine (E) • Represents corporations, funds, DAOs. • Handles governance, quorum, multi-sig, dual-class shares. • Encodes proposals, votes, and execution logic. • Account Machine (A) • Bilateral channels between parties. • Executes DeltaList, subcontracts, crediting, payments. • Always sovereign: AccountProof is sufficient for exit.

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Cascade Models

2.1 Cascade Security Model (CSM)

Security in XLN is a superset of all financial mechanisms: • Reserves (RTGS / central bank / GA). • Collateral (Lightning / full-reserve channels). • Credit (banking, bilateral debt).

Formula:

CSM = Reserve(J) + Collateral(A) + Credit(A/E)

➡️ This cascade guarantees bounded risk, enforceable debt, and sovereign exits.

2.2 Cascade Control Model (CCM)

Control in XLN unifies all governance forms: • Simple majority & DAO voting. • Dual-class shares (Alphabet, Meta). • Extended XLN primitives: • C-shares (Control) — control rights only. • D-shares (Dividend) — profit rights only.

This allows any corporate governance to be encoded: board quorums, emergency meetings, weighted voting, or shareholder insurance.

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Channel Primitives

A channel = Collateral + DeltaList. • Collateral — bilateral locked funds in Jurisdiction. Defines boundaries for permissible deltas. • DeltaList — sequence of changes (credits, debits, transfers). • ondelta/offdelta — programmable hooks that transform DeltaList via external Subcontracts.

Example DeltaList (JSON):

[ { "type": "credit", "from": "Alice", "to": "Bob", "amount": 50 }, { "type": "payment", "from": "Bob", "to": "Charlie", "amount": 20 } ]

Execution property: Before settlement, deltas are aggregated → passed through subcontracts → modified DeltaList → settlement/dispute → final collateral split.

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Example Transaction Flow
1. Alice ↔ Bob open channel with collateral = 100.
2. Bob receives credit = 50 from Alice.
3. DeltaList records {credit: 50}.
4. Alice calls offchain subcontract Insurance(), appending repayment condition after 24h.
5. If Bob fails to repay, during dispute GA executes subcontract, Alice reclaims 100.
6. Everything is bundled into AccountProof, which is always sufficient for exit.

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Solidity Reference Contracts

5.1 Depository.sol (Jurisdiction / GA)

pragma solidity ^0.8.20;

contract Depository { struct Collateral { address partyA; address partyB; uint256 amount; }

mapping(bytes32 => Collateral) public collaterals;

function lock(bytes32 channelId, address a, address b) external payable {
    collaterals[channelId] = Collateral(a, b, msg.value);
}

function dispute(bytes32 channelId, bytes memory accountProof) external {
    // Verify deltas and subcontracts
    // Apply enforceDebt and finalize collateral split
}

}

5.2 EntityProvider.sol (Entities + Governance)

pragma solidity ^0.8.20;

contract EntityProvider { bytes32 public quorumHash;

struct Proposal {
    bytes32 id;
    bytes data;
    uint256 votes;
}

mapping(bytes32 => Proposal) public proposals;

function submitProposal(bytes32 id, bytes memory data) external {
    proposals[id] = Proposal(id, data, 0);
}

function vote(bytes32 id, bytes memory quorum) external {
    require(keccak256(quorum) == quorumHash, "Invalid quorum");
    proposals[id].votes++;
    // If threshold reached → execute proposal
}

}

5.3 Subcontract.sol (External logic)

pragma solidity ^0.8.20;

contract Subcontract { function applyDelta(bytes memory deltaList) external pure returns (bytes memory) { // External logic: insurance, loans, derivatives return deltaList; } }

AccountProof includes: • DeltaList, • Subcontract references, • Signatures of both parties.

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BrainVault: Key Security

BrainVault = Argon2 IT–based deterministic key derivation. • Uses Argon2id with high memory + iteration cost. • Keys aren’t stored — they’re derived on demand from passphrase + salt. • Even if device is compromised, attacker faces Argon2 hardness (10^12+ ops). • Functions as a lightweight HSM replacement for XLN servers.

This ensures private keys remain secure, portable, and sovereign.

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Why XLN is Revolutionary
1. Superset of all previous systems: • Lightning, Plasma, Rollups → strict subsets. • Banking, RTGS, DeFi → strict subsets.
2. Sovereign exits: • AccountProof alone guarantees recovery. • No DA problem, no reliance on third-party archivists.
3. Programmable everything: • Credit, reserves, collateral, dual-class governance all encoded as Subcontracts/Proposals.
4. Scalability via unicast: • GA/J = ≤30 TPS baseline. • Entities + Accounts scale to billions of TPS in parallel unicast channels.
5. Corporate + Finance unification: • From FDIC insurance to Alphabet dual-class, from SEPA to Visa → everything unified in one protocol.

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ASCII Cascade Diagram

    [ Jurisdiction / GA ]
        |   (Reserves)
        v
 [ Entity Machines ]
  /  (Governance, shares, proposals)
 /

[ Account Machines ] ----> DeltaList → on/off-delta → Subcontracts (Collateral + Credit + Payments)

CSM: Reserve → Collateral → Credit CCM: Quorum → C-shares → D-shares

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Summary • XLM/GA = generalized RTGS + L1, anchors reserves. • Entities = programmable governance (quorums, shares, proposals). • Accounts = bilateral sovereign channels, merging banking & Lightning. • CSM = superset of all financial security mechanisms. • CCM = superset of all corporate governance structures. • BrainVault = Argon2 IT hardened key system, portable and sovereign.

XLN is the Financial Internet — programmable, sovereign, massively scalable.

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✅ This Markdown can be read by another LLM or developer and they’d be able to: • Reproduce core Solidity contracts, • Understand DeltaList and collateral logic, • Explain cascade models (CSM/CCM), • See why XLN is a superset of everything before.

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Do you want me to extend this into a formal whitepaper format (with abstract, problem statement, related work, protocol design, security model, conclusion) so it can be published?

homakov/max.md