T-Rex Protocol

T-REX is a privacy-preserving protocol that incentivizes Lightning Network liquidity provision to Citrea node hubs through DeFi rewards. Users pay Lightning invoices to increase node inbound capacity, then claim cBTC and reward tokens using Schnorr-Private-2.0 verification - keeping Lightning payment details completely private while enabling trustless on-chain reward distribution.

The protocol solves the liquidity asymmetry problem in Lightning Network by creating economic incentives for users to provide inbound liquidity to routing nodes. Unlike traditional approaches that expose payment details, T-REX uses arbitrary message hashes and Schnorr signature verification via Citrea's native precompiles, ensuring complete privacy while maintaining cryptographic security.

Key innovations include:

(1) Schnorr-Private-2.0 approach keeping Lightning invoice details only on L2,

(2) Dynamic reward calculation based on actual invoice amounts plus routing fees,

(3) Multi-minter token system supporting both public and private verification modes,

(4) Gas-efficient verification using Citrea's Schnorr precompile at 0x0200.

The system enables a symbiotic relationship between Lightning routing and DeFi incentives, where providing Lightning liquidity generates rewards in Citrea's DeFi ecosystem, creating sustainable liquidity mining opportunities while preserving user privacy.

Built on Citrea EVM with Foundry/Solidity smart contracts leveraging Schnorr precompiles for gas-efficient signature verification. Frontend uses vanilla JavaScript with ethers.js for blockchain interaction and @noble/secp256k1 for Schnorr signature generation.

Architecture: 3 core contracts (TrexToken, LightningOraclePrivate, DeFiContractPrivate) with multi-minter system enabling flexible reward distribution. Backend API built with Node.js/Express providing RESTful endpoints for private oracle operations.

Key technical innovations: (1) Schnorr signature verification using Citrea's 0x0200 precompile for 4600 gas cost vs traditional ECDSA, (2) Privacy-preserving message hash creation keeping Lightning payment details off-chain, (3) Emergency verification fallback system ensuring protocol functionality during signature compatibility issues, (4) Dynamic reward calculation: invoice amount + 1.5% routing fee + 10% reward tokens.

Notable hacks: Implemented dual verification system (regular Schnorr + emergency fallback) to handle Citrea precompile compatibility issues while maintaining production readiness. Used deterministic signing with extraEntropy: false for better precompile compatibility. Created arbitrary message hash system using keccak256(utf8Bytes(message)) for privacy preservation.

Deployed on Citrea testnet with verified contracts using Sourcify + Blockscout verification. Integration includes WebLN support for seamless Lightning payments and comprehensive test suite covering emergency verification, signature compatibility, and end-to-end flows.