Dynamic Fee Calculation for Different Address Types

[bennyhodl]

The current fee calculation logic assumes all payout script pubkeys are P2WPKH, leading to inaccurate fee estimation when contracts use different address types such as multi-sig, legacy addresses, Pay-to-Script-Hash (P2SH), or Pay-to-Taproot (P2TR).

Problem

The codebase uses hardcoded assumptions about script pubkey sizes and witness costs:

❌ Current behavior:

• Assumes P2WPKH for all payout calculations
• Uses fixed weight/size values regardless of actual script type
• Results in under/over-estimation of required fees

✅ Desired behavior:

• Dynamic fee calculation based on actual script pubkey type
• Accurate weight estimation for different address formats
• Support for all common Bitcoin address types

Technical Impact

Fee Calculation Areas

• CET Output Fees: Payout script pubkey size affects transaction weight
• Refund Transaction Fees: Return address script type impacts costs
• Change Output Fees: Wallet change address type considerations
• Input Spending Fees: Different input types have different witness costs

Implementation Approach

Script Type Detection

• Analyze script pubkey to determine address type
• Use bitcoin::Script methods for type identification
• Handle both input and output script types

Dynamic Weight Calculation

• Replace hardcoded weight values with script-type-specific calculations
• Account for witness vs non-witness script types
• Include multi-sig threshold and key count in calculations

Fee Estimation Updates

• Update weight_to_fee calculations to be script-aware
• Modify party parameter calculations to use actual script costs
• Ensure accuracy across different contract configurations

Example Use Cases

• Multi-sig DLCs: Corporate contracts requiring multiple signatures
• Legacy Integration: Supporting older wallet infrastructure
• Taproot Contracts: Privacy-enhanced DLCs with script-path conditions
• Mixed Environments: Parties using different wallet types