Abstract: Blockchain interoperability solutions allow users to hold and transfer assets among different chains, and in so doing reap the benefits of each chain. To fully reap the benefits of multi-chain financial operations, it is paramount to support interoperability and cross-chain transactions also on Layer-2 networks, in particular payment channel networks (PCNs). Nevertheless, existing works on Layer-2 interoperability solutions still involve on-chain events, which limits their scalability and throughput. In this work, we present X-Transfer, the first secure, scalable, and fully off-chain protocol that allows payments across different PCNs. We formalize and prove the security of X-Transfer against rational adversaries with a game theoretic analysis. In order to boost efficiency and scalability, X-Transfer also performs transaction aggregation to increase channel liquidity and transaction throughput while simultaneously minimizing payment routing fees. Our empirical evaluation of X-Transfer shows that X-Transfer achieves at least twice as much throughput compared to the baseline of no transaction aggregation, confirming X-Transfer's efficiency.
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