Eltoo

Eltoo, also written LN-Symmetry, is a proposed upgrade to Lightning Network payment channels published in 2018 by Christian Decker, Rusty Russell, and Olaoluwa Osuntokun. It replaces Lightning's penalty-based channel updates with a simpler scheme in which the latest channel state can always be settled on chain, with no punishment mechanism. It requires a Bitcoin soft fork adding a new signature mode, SIGHASH_ANYPREVOUT, specified in BIP 118.

Why it matters

Today's Lightning channels rely on penalties: if a counterparty broadcasts an outdated channel state, the honest party can seize the entire channel balance. That keeps everyone honest but demands perfect bookkeeping, since accidentally publishing an old state, for example after restoring a wallet from an outdated backup, looks identical to fraud and triggers the same total loss.

Eltoo removes that hazard. Any newer state can simply spend and replace an older one on chain, so an honest mistake costs nothing and backups become safe. The design also simplifies channels among more than two parties, opening paths to shared channel constructions that could let many users share a single UTXO.

How it works

SIGHASH_ANYPREVOUT lets a signature remain valid regardless of which specific output it spends. Channel participants sign a sequence of numbered update transactions, each able to attach to any earlier one. If someone broadcasts state 40, the counterparty can attach state 45 on top before settlement, so the chain always converges on the latest agreed balance. As of early 2026 the required soft fork has not been activated.