Definition
Eltoo, also called LN-Symmetry, is a proposed replacement for the Lightning Network's channel-update mechanism in which any later channel state can directly override any earlier one. Today's channels rely on a penalty system: if a peer broadcasts an outdated state, the counterparty can claim the entire channel balance as punishment. Eltoo removes the need for that punishment, making channels simpler and far safer to back up and recover.
From penalties to simple replacement
Under eltoo, every state is numbered, and a newer state transaction can spend and supersede an older one regardless of which old state was published. Broadcasting a stale state is therefore harmless beyond wasting a little fee, because the honest peer simply attaches the latest state on top. Nodes only need to store the most recent state rather than the full history of revocation secrets, which is a large win for storage-constrained devices like hardware wallets.
The missing Bitcoin upgrade
Eltoo depends on a new signature-hashing mode, SIGHASH_ANYPREVOUT, defined in BIP 118. This lets a signature remain valid even if the exact transaction it spends changes, a capability eltoo calls rebinding, which is what allows a later state to bind onto any earlier one. As of 2026 SIGHASH_ANYPREVOUT has not been activated on Bitcoin, so eltoo remains a proposal, though one that would also make multiparty constructions like channel factories considerably easier.
Eltoo would change how each payment channel enforces its latest state, and its penalty-free design reduces the urgency of always-online monitoring services such as those in our watchtower entry.
In Simple Terms
Eltoo, also called LN-Symmetry, is a proposed replacement for the Lightning Network’s channel-update mechanism in which any later channel state can directly override any earlier…