Benha University

Lamiaa Said El-Sayed Salem

Lecturer

Faculty of Computers and Artificial Intelligence Information Systems

Extending PayJoin to Lightning Channel Funding: A Practical Method for Obfuscating Channel Opens on the Bitcoin Blockchain

• 2026
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Publication Information
Authors Lamiaa Said, Hatem Mohamed, Diaa Salama, Nesma Mahmoud
Keywords Bitcoin, Lightning Network, PayJoin, Channel Funding, On-Chain Privacy, Deanonymization
Journal Not Available
Publisher IEEE Int. Conf. Smart Sustainable Systems for Computer and Engineering Applications (3SCEA)
Volume Not Available
Issue Not Available
Pages Not Available
publication.type International
Paper Link Not Available
Supplementary Materials Not Available
Abstract
The Lightning Network (LN) promises scalable Bitcoin payments with stronger off-chain privacy. On the other hand, Standard channel funding transactions exhibit a distinctive on-chain structure that makes them easily recognizable, allowing adversaries to detect LN activity and associate channels with specific wallet clusters. This structural linkability exposes LN users to deanonymization through clustering heuristics and graph-based transaction analysis. This paper proposes a practical extension of PayJoin to the LN channel funding process, transforming the conventional single-funded channel open into a dual-input, collaboratively constructed partially signed Bitcoin transaction (PSBT). By allowing both channel participants to contribute inputs during channel creation, the resulting on-chain transaction becomes statistically and structurally indistinguishable from an ordinary Bitcoin payment. We implement and evaluate the proposed approach through repeated testnet experiments using Bitcoin Core and LND, comparing standard single-funded channels with the proposed PayJoin-funded channels. Through our evaluation of privacy metrics and clustering resistance, we demonstrate that PayJoin-based channel funding significantly reduces the on-chain identifiability, providing measurable anonymity gains over standard channel-opening methods. These results confirm that PayJoin-assisted channel funding provides a deployable and effective enhancement to Lightning’s on-chain privacy without modifying the underlying LN protocol.
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