Security Model

BTC OmniLayer inherits Bitcoin’s security guarantees and layers additional protections that match its modular architecture. This section presents (i) the formal threat model, (ii) the cryptographic primitives employed, (iii) independent-audit results, and (iv) mitigation and upgrade strategies.

Threat Model

Threat Class	Targeted Layer	Impact if Unmitigated
Key Compromise	Vault & Assets	Theft, asset freeze, loss of control
State Revocation	Lightning++	Channel funds stolen via outdated commitment
Protocol Downgrade / Replay	All RPC channels	Forced use of weaker cipher-suites, replay of signed messages
Double-Mint / Inflation	Assets Module	Undercut asset supply integrity
DoS & Resource Exhaustion	Service Layer	Payment latency spikes, mint/transfer stalls
Supply-Chain Attack	Dev-Hub templates & SDKs	Injection of back-doored dependencies

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Cryptographic Foundations

• Schnorr Signatures (BIP-340) – Deterministic, linear-in-nonce signatures enable MuSig2 aggregation and PTLC adaptor keys.

• MuSig2 – Two-round multisignature protocol securing vault policies with low interactive overhead.

• Taproot Tweaks – Assets are committed in Taproot leaves, producing short proofs with native key-path spending for simple sends.

• Adaptor Signatures (PTLCs) – Route-blinded, asset-aware Lightning swaps with minimal value-correlation leaks.

• Noise_KX Handshake – Authenticated gRPC streams between modules, binding channel keys to TLS certs and thwarting replay/downgrade.

Mitigation Strategies

Threat	Primary Mitigation	Secondary Controls
Key compromise	Hierarchical MuSig2 + Shamir offline shards	Time-delayed exits; watchtower sweep scripts
State revocation	Breach remedy transactions embedded by default	Third-party watchtowers monitor 24/7
Replay / downgrade	Channel-binding tokens & nonce curtains	Versioned protobuf schemas, HSTS for APIs
Double-mint	Single-use GenesisDescriptor signed by issuer	Merkle indexers cross-validate supply in real time
DoS	Adaptive token bucket per peer & gRPC stream	Horizontal scaling via stateless micro-services
Supply-chain	Reproducible builds, sigstore attestations	Template CI scans (SCA + fuzz) before merge

Upgrade & Recovery Path

• Semantic Version Fences – Clients can interact only within a ±1 minor-version window; older nodes default to receive-only mode, never risking fund loss.

• Shadow Migrations – New cryptographic primitives introduced behind feature flags; dual-signing (old + new) for one release cycle ensures safe rollout.

• Emergency Revocation – A two-of-three multisig of core maintainers can publish a “freeze script” disabling new mints or channel opens in the rare event of critical exploit discovery—funds already on-chain remain spendable.

Through layered cryptography, conservative engineering, and transparent third-party review, BTC OmniLayer delivers a security posture that matches Bitcoin’s own ethos: assume hostile networks, minimise trust, and keep the exit keys in the user’s hands.