Design proposal: Initiate withdrawals on the Stacks chain

[netrome]

Background

Marvin created a proof of concept for sBTC 0.1 in which withdrawals are initiated on the stacks chain here: https://github.com/Trust-Machines/stacks-sbtc/pull/595

For Mini it has turned out to be simpler to initiate withdrawals on Stacks, and we suspect that the final design would be simpler if that also were the case.

Let's explore the following three options

• Option 0: Don't change the design
• Option 1: Support initiating withdrawals on Stacks alongside bitcoin operations
• Option 2: Only support initiating withdrawals on Stacks

Definition of done

We have decided on one of the options above and updated the design in line with that option, as well as provide an explanation in the design for the interested reader motivating the design.

[jcnelson]

The final system will likely support both Bitcoin-originated withdrawals and Stacks-originated withdrawals. The latter would be the happy path, and the former exists to force block producers to include the withdrawal tx in case censorship is a concern.

[muneeb-ali]

I think for Mini it might make sense to do whatever is faster (taking the MVP approach of Mini).

For the final system, it will help to support just Bitcoin-only withdrawals. We should assume that there will be some custody providers or wallets that can interact with Bitcoin but can't interact with Stacks L2 (at least in the initial months/years after Nakamoto release). So supporting Bitcoin-only deposits and withdrawals helps increase the potential use case of sBTC (folks on such wallets/custodians can also participate).

[netrome]

Then I think it makes sense to keep the scope narrow and aim for Bitcoin-only for 1.0 and having Stacks-originated withdrawals as a feature for 1.1.

So to summarize:

0.1: Stacks-originated withdrawals
1.0: Bitcoin-originated withdrawals
1.1: Both

[friedger]

sBTC DR 0.1 (alpha romeo) support Bitcoin-originated withdrawals only