Reimbursing funds locked in a lost payment channel

Off-chain balance can be recovered after wallet gets uninstalled or even after phone gets lost because encrypted channel snapshots are saved to Olympus server as well as to local file on a phone.

Note that mnemonic phrase is used as an encryption key in both cases so you still need to have it saved somewhere in order to decrypt your channel backups.

Restoring using local backup

BLW periodically saves encrypted channel snapshots to /storage/BLW/mainnet/encrypted.channels.bkp file. Once (re)installed wallet checks if that file is present and then applies user provided mnemonic phrase as a decryption key. Once decrypted BLW puts obtained channels back in place.

Restoring using Olympus backup

Olympus recovery is used as a measure of last resort in case when local backup is not available and works as follows: once a fresh payment channel is created it gets encrypted and sent to Olympus server, this operation is carried out once per channel. Olympus backup can later be retrieved and used to reimburse your lost channel balance back to your on-chain wallet using a data-loss-protection protocol. Olympus recovery should be initiated manually by tapping a button in a wallet settings page.

Please note that following conditions must be met for data-loss-protection to work:

• Olympus server does not store your data for free so saving one channel backup requires one storage token.
• The peer on the other side of the lost channel must be online in order to receive your recovery request and initiate a remote forced channel closure.