Eltoo
Eltoo (also called LN-Symmetry) is a proposed Lightning Network channel update mechanism in which any later channel state can replace any earlier state on chain without a punitive justice transaction. The paper eltoo: A Simple Layer2 Protocol for Bitcoin by Christian Decker, Rusty Russell, and Olaoluwa Osuntokun described update and settlement transactions that rebind to prior outputs. Deploying that pattern on Bitcoin requires a consensus change that makes signatures rebindable across different prevouts, commonly discussed as BIP 118 SIGHASH_ANYPREVOUT or later Taproot-native covenant bundles such as BIP 448.
Today's Lightning channels use Poon–Dryja revocation. Each state update exchanges revocation secrets for the prior commitment. If an old commitment is broadcast, the other party can sweep the cheater's funds after a delay. Eltoo replaces punishment-as-primary-security with a latest-state-wins rule. Publishing an old update is mainly a fee cost if the honest party can still put a newer update on chain before settlement finalizes. Both parties can hold identical transaction sets. Without a soft fork, Bitcoin Script cannot express that rebinding behavior for Taproot spends in the form eltoo needs. Until such a rule activates on mainnet, eltoo channels remain limited to signet, regtest, and research implementations. Related channel factory and multiparty designs often assume eltoo or an equivalent covenant because revocation trees scale poorly with the number of participants.