Commitment Transaction

The commitment transaction represents the current state of a channel's balance.

Role of the Commitment Transaction

Each time a payment is made, a new commitment transaction is created and signed by both parties. It spends the funding transaction's output and distributes the funds back to the participants according to the latest balance.

Asymmetric Transactions

In Lightning, each party holds a slightly different version of the commitment transaction to enable the penalty mechanism. These transactions are never broadcast unless a party wants to close the channel unilaterally.