Watchtower Services

Watchtower Services are independent third-party entities that monitor blockchain channels or sidechains on behalf of users who are offline. If a malicious party attempts to close a channel with an outdated state to steal funds, the watchtower detects this broadcast and submits a challenge to the main chain.

This protects the user from losing assets while they are not actively monitoring their account. In the world of derivatives, where rapid price fluctuations might tempt a counterparty to act dishonestly, watchtowers provide essential security for off-chain positions.

They operate based on economic incentives, often charging a fee for their monitoring services. This creates a more robust and resilient ecosystem by ensuring that security is not solely dependent on constant user vigilance.

It is a critical component for the mass adoption of payment channels.