Good morning aj,
> If you are committing to the script code, though, then each settlement
> sig is already only usable with the corresponding update tx, so you
> don't need to roll the keys. But you do need to make it so that the
> update sig requires the CLTV; one way to do that is using codeseparator
> to distinguish between the two cases.
> > Also, I cannot understand `OP_CODESEPARATOR`, please no.
> If codeseparator is too scary, you could probably also just always
> require the locktime (ie for settlmenet txs as well as update txs), ie:
> and have update txs set their timelock; and settlement txs set a absolute
> timelock, relative timelock via sequence, and commit to the script code.
> (Note that both those approaches (with and without codesep) assume there's
> some flag that allows you to commit to the scriptcode even though you're
> not committing to your input tx (and possibly not committing to the
> scriptpubkey). BIP118 doesn't have that flexibility, so the A_s_i and
> B_s_i key rolling is necessary)

I think the issue I have here is the lack of `OP_CSV` in the settlement branch.

Consider a channel with offchain transactions update-1, settlement-1, update-2, 
and settlement-2.
If update-1 is placed onchain, update-1 is also immediately spendable by 
But settlement-1 cannot be spent by update-2 and thus the invalidation of older 
state fails.

The `OP_CSV` in the settlement branch of the update transaction outputs exists 
to allow later update transactions have higher priority over settlement 

To ensure that a settlement signature can only take the settlement branch, we 
need a distinct public key for the branch, so at least `A_s` and `B_s` without 
rolling them for each `i`, if we use `nLockTime` on the settlement transactions 
and enforce it with `OP_CHECKLOCKTIMEVERIFY`.
It might be possible to do this with `OP_CODESEPARATOR`, but we do need the 
`OP_CSV` in the settlement branch.

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