Where the option contracts move sats

1. The oracle service issues one unit, then deploys the beacon

Vaults commit to an asset id, not to a script. The id is the issue’s txid, and the beacon script commits to that id, so the beacon cannot be an output of the issue itself. It takes two transactions. No covenant runs in either: the oracle service’s wallet signs both.

• No script checks either transaction. The desk takes BEACON_TXID as given.

• Oracle service
  −330
  keeps 9,670. The unit is on the beacon.
• Beacon coin
  +330
  and 1 identity unit

2. The ark client funds both intents and the desk

One ark send names three receivers. Fees are 0, so this no-change shape spends exactly their sum. A larger client coin would add change back to the ark client. Who is paid would not change. No option script runs. The round’s tree is not an OptionIntent leaf.

Same chapter, second shape. The desk’s vtxos sum to 1,330. The 330 above the premium is at or under dust, so selectFloat folds it into the writer’s output. A surplus above 330 would be spend.change back to the desk.

On Mutinynet the vault committed to asset 9b183c…50e0, group 0. The writer’s coin was 99,670, so the deposit returned 79,670 as change (4d6494…). The desk’s coin was 79,670, so finalize had a third output of 78,670, change to the desk script (7d59dc…). Who is paid does not change.

Desk change folded into the premium

• Finalize, side 0: !checkTime(deadline), input ≥ collateral, output 0 is the writer program and ≥ premium + (locked − collateral), output 1 is the vault program and ≥ collateral.
• The desk signs funding inputs on the forfeit leaf. The intent leaf is server and emulator.

• Writer, this shape then the 10,000,000 settle
  −1,170
  1,330 received, then 47,500 of the 50,000
• Desk, this shape then that settle
  +170
  paid 1,330, receives 1,500

Back to the 1,000 premium

After the exact fill the writer has 1,000 on hand and 50,000 still locked. A price of 10,000,000 cents, which the smoke test does not publish, would pay the holder 1,500 and return 47,500 to the writer after the 1,000 read fee. The chapter net is that whole path.

• Writer, exact fill then 10,000,000
  −1,500
  1,000 premium + 47,500 − 50,000 locked
• Desk, exact fill then 10,000,000
  +500
  paid 1,000, receives 1,500

3. The oracle publishes the strike

The smoke test uses one oracle key. POST /api/samples stores the strike, 9,700,000 cents, at the service clock, which is inside [expiry, expiry + 60]. POST /api/publish runs after checkTime(expiry + expiryLag). The sample digest is sha256(ctrlTxid || BTCUSD || price_le64 || time_le64). The vault’s 50,000 does not move.

• Price 1 to 1,000,000,000 cents. Sample time is inside [expiry, expiry + expiryLag]. At least threshold signatures from the first signersN keys. The smoke test uses one key and threshold 1.
• The new slot is (expiry, price || time). Expiry > 1,800, not already in a slot, and checkTime(expiry + expiryLag). Round + 1. Output 0 keeps the script, the value, and the unit.

4. Settlement spends the vault and the beacon together

Covered call: if the price is above the strike, the holder’s sats are Q × (price − K) / price, division truncating. Limited put: if the price is below the strike, min(Q, Q × (K − price) / price). A leg of 330 sats or less is folded into the other output. Output 0 is the beacon. Payouts start at output 1.

Input: kind 0, price 9,700,000 cents. Holder payoff 0 sats. Shape: writer. Writer receives 49,000.

The control starts at the strike, which is the price pnpm smoke:regtest publishes. Moving the price redraws this same transaction with holderPayoff and settlementOutputs, including the 1,000 read fee. A second output appears only when both legs are above 330 sats.

• Writer, exact fill then the strike
  0
  premium 1,000 + 49,000 − 50,000 locked
• Desk, exact fill then the strike
  −1,000
  paid 1,000, receives none of the collateral
• Beacon coin
  +1,000
  330 becomes 1,330

The settlement the smoke test runs, at the strike

At 9,700,000 cents the call payoff is 0, which is at or under dust, so the only payout is the writer. It is 50,000 − 1,000. The holder receives nothing of the collateral. The 1,000 premium and the 1,000 read fee cancel in the writer’s net.

• Writer
  0
  1,000 premium + 49,000 − 50,000
• Desk
  −1,000
  the premium, and none of the collateral
• Beacon
  +1,000
  the read fee

The dust kink, two prices

With Q = 50,000 and a 1,000 read fee, the call formula pays 330 at 9,764,641 cents. That leg is not its own output, so the writer receives 49,000, the same shape as the strike. At 9,764,642 cents it pays 331 and the outputs split. These prices were not published by the smoke test. The nets are the 331 split after the 1,000 premium.

• Writer, 331 split
  −331
  1,000 + 48,669 − 50,000
• Desk, 331 split
  −669
  331 − 1,000

Limited put, the holder takes the pot

Kind 1 at half the strike, 4,850,000 cents. The raw payoff is the whole 50,000. After the 1,000 read fee the writer’s leg is 0, so output 1 is 49,000 to the holder. This price was not published by the smoke test.

• Writer
  −49,000
  kept the 1,000 premium, settlement pays 0
• Desk
  +48,000
  paid 1,000, receives 49,000

5. The second intent is cancelled

The smoke test does this after the fill. checkTime has passed the cancel deadline, now + 45. cancel pays the 50,000 to the writer program. The writer key is not a signer. The ark client, who funded the intent, is not paid back.

• Writer
  +50,000
  the cancelled collateral
• Desk
  0
  never paid this intent

6. Recovery after 2,048 seconds

Each unilateral leaf is the owner’s signature after older(exit). The spent program stores that delay as seconds. The compiler artifact stores it as blocks; secondsExit flips the type and leaves the integer. Outputs are not pinned, so each picture returns the input amount and flags the destination. No caller sends these leaves.

7. The beacon can move without touching open vaults

migrate pays the identity unit to a new 32-byte program, for example one with other oracle keys. Three of the five oracle keys and the oracle service sign the migrate digest. Neither side can move the unit alone. Nothing limits the next program, so together they could move it anywhere, and vaults would read whatever it writes. The digest includes the round, so a signature is good for one state. The state packet is copied. Vaults commit to the asset id, not to the beacon script, so they keep reading after the move.

Swap and SingleSig

NonInteractiveSwap is the pattern OptionIntent copies. The desk does not send it. Asset amounts are the program check: offer 1,000, want 2,000. The script does not pin the sats on those outputs, so this picture does not invent a sat split.

SingleSig asks for the user’s signature and does not pin outputs. The swap source imports it. This repo does not load a SingleSig artifact, and the desk does not call either leaf.