From a04da5412983cd8f00a6cdc3fcb214617ab97998 Mon Sep 17 00:00:00 2001
From: Prathamesh Musale <prathamesh.musale0@gmail.com>
Date: Tue, 17 Sep 2024 18:34:07 +0530
Subject: [PATCH] Add instructions for payments on L2 channel

---
 testnet-nitro-node.md | 142 +++++++++++++++++++++++++++++++++++++++++-
 1 file changed, 141 insertions(+), 1 deletion(-)

diff --git a/testnet-nitro-node.md b/testnet-nitro-node.md
index 05c56b8..b765781 100644
--- a/testnet-nitro-node.md
+++ b/testnet-nitro-node.md
@@ -176,7 +176,7 @@ Nitro nodes can be run using Ansible either locally or on a remote machine; foll
 
 Create a ledger channel with the bridge on L1 which is mirrored on L2
 
-* Run the following commands deployment machine:
+* Run the following commands deployment machine
 
 * Set required variables:
 
@@ -273,6 +273,146 @@ Create a ledger channel with the bridge on L1 which is mirrored on L2
   # ]
   ```
 
+## Payments On L2 Channel
+
+Perform payments using a virtual payment channel created with another Nitro node over the mirrored L2 channel with bridge as an intermediary
+
+* Run the following commands deployment machine
+
+* Check status of the mirrored channel on L2:
+
+  ```bash
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client get-all-ledger-channels -p 4005 -h nitro-node"
+
+  # Expected output:
+  # [
+  #   {
+  #     "ID": "0x6a9f5ccf1fa802525d794f4a899897f947615f6acc7141e61e056a8bfca29179",
+  #     "Status": "Open",
+  #     "Balance": {
+  #       "AssetAddress": "<l2-asset-address>",
+  #       "Me": "<your-nitro-address>",
+  #       "Them": "<bridge-nitro-address>",
+  #       "MyBalance": Xn,
+  #       "TheirBalance": Yn
+  #     },
+  #     "ChannelMode": "Open"
+  #   }
+  # ]
+  ```
+
+* Set required variables:
+
+  ```bash
+  DEPLOYMENTS_DIR=<path-to-deployments-dir>
+
+  cd $DEPLOYMENTS_DIR/nitro-node
+
+  export BRIDGE_NITRO_ADDRESS=$(yq eval '.bridge_nitro_address' nitro-node-config.yml)
+
+  # Counterparty to create the payment channel with
+  export COUNTER_PARTY_ADDRESS=<counterparty-nitro-address>
+
+  # Mirrored channel on L2
+  export L2_CHANNEL_ID=<l2-channel-id>
+
+  # Amount to create the payment channel with
+  export PAYMENT_CHANNEL_AMOUNT=10000
+  ```
+
+* Check for existing payment channels for the L2 channel:
+
+  ```bash
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client get-payment-channels-by-ledger $L2_CHANNEL_ID -p 4005 -h nitro-node"
+  ```
+
+* Create a virtual payment channel:
+
+  ```bash
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client virtual-fund $COUNTER_PARTY_ADDRESS $BRIDGE_NITRO_ADDRESS --amount $PAYMENT_CHANNEL_AMOUNT -p 4005 -h nitro-node"
+
+  # Follow your L2 Nitro node logs for progress
+
+  # Expected Output:
+  # Objective started VirtualFund-0x43db45a101658387263b36d613322cc952d8ce5b70de51e3a495513c256bef4d
+  # Channel Open 0x43db45a101658387263b36d613322cc952d8ce5b70de51e3a495513c256bef4d
+
+  # Set the resulting payment channel id in a variable
+  PAYMENT_CHANNEL_ID=<payment-channel-id>
+  ```
+
+  Multiple virtual payment channels can be created at once
+
+* Check the payment channel's status:
+
+  ```bash
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client get-payment-channel $PAYMENT_CHANNEL_ID -p 4005 -h nitro-node"
+
+  # Expected output:
+  # {
+  #   ID: '0xb29aeb32c9495a793ebf7bd116232075d1e7bfe89fc82281c7d498e3ffd3e3bf',
+  #   Status: 'Open',
+  #   Balance: {
+  #     AssetAddress: '0x0000000000000000000000000000000000000000',
+  #     Payee: '<your-nitro-address>',
+  #     Payer: '<counterparty-nitro-address>',
+  #     PaidSoFar: 0n,
+  #     RemainingFunds: <payment-channel-amount>n
+  #   }
+  # }
+  ```
+
+* Send payments using the virtual payment channel:
+
+  ```bash
+  export PAY_AMOUNT=200
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client pay $PAYMENT_CHANNEL_ID $PAY_AMOUNT -p 4005 -h nitro-node"
+
+  # Expected output
+  # {
+  #   Amount: <pay-amount>,
+  #   Channel: '<payment-channel-id>'
+  # }
+
+  # This can be done multiple times until the payment channel balance is exhausted
+  ```
+
+* Check payment channel's status again to view updated channel state
+
+* Close the payment channel to settle on the L2 mirrored channel:
+
+  ```bash
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client virtual-defund $PAYMENT_CHANNEL_ID -p 4005 -h nitro-node"
+
+  # Expected output:
+  # Objective started VirtualDefund-0x43db45a101658387263b36d613322cc952d8ce5b70de51e3a495513c256bef4d
+  # Channel complete 0x43db45a101658387263b36d613322cc952d8ce5b70de51e3a495513c256bef4d
+  ```
+
+* Check L2 mirrored channel's status after the virtual payment channel is closed:
+
+  ```bash
+  laconic-so deployment --dir l2-nitro-deployment exec nitro-rpc-client "nitro-rpc-client get-all-ledger-channels -p 4005 -h nitro-node"
+
+  # Expected output:
+  # [
+  #   {
+  #     "ID": "0x6a9f5ccf1fa802525d794f4a899897f947615f6acc7141e61e056a8bfca29179",
+  #     "Status": "Open",
+  #     "Balance": {
+  #       "AssetAddress": "<l2-asset-address>",
+  #       "Me": "<your-nitro-address>",
+  #       "Them": "<bridge-nitro-address>",
+  #       "MyBalance": <your-updated-balance>n,
+  #       "TheirBalance": <bridge-updated-balance>n
+  #     },
+  #     "ChannelMode": "Open"
+  #   }
+  # ]
+  ```
+
+  Your balance on the L2 channel should be reduced by total payments done on the virtual payment channel
+
 ## Clean up
 
 * Switch to deployments dir: