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EOTS Manager

The EOTS daemon is responsible for managing EOTS keys, producing EOTS randomness, and using them to produce EOTS signatures.

⚡ Note: EOTS stands for Extractable One Time Signature. You can read more about it in the Babylon BTC Staking Litepaper. In short, the EOTS manager generates EOTS public/private randomness pairs. The finality provider commits the public part of these pairs to Babylon for every future block height that they intend to provide a finality signature for. If the Finality Provider votes for two different blocks on the same height, they will have to reuse the same private randomness which will lead to their EOTS private key being exposed, leading to slashing.

Once a Finality Provider double-signs, their voting power is immediately reduced to zero, while their private key is exposed. A Finality Provider that double-signs can never regain voting power (tombstoning). Additionally, the exposed private key of the Finality Provider can be used to fully sign the slashing transactions of all their stake delegations.

The EOTS manager is responsible for the following operations:

  1. EOTS Key Management:
    • Generates Schnorr key pairs for a given Finality Provider using the BIP-340 standard as its EOTS key pair.
    • Persists generated key pairs in the internal Cosmos keyring.
  2. Randomness Generation:
    • Generates lists of EOTS randomness pairs based on the EOTS key, chain ID, and block height.
    • The randomness is deterministically generated and tied to specific parameters.
  3. Signature Generation:
    • Signs EOTS using the private key of the finality provider and the corresponding secret randomness for a given chain at a specified height.
    • Signs Schnorr signatures using the private key of the Finality Provider.