Understand Outcomes

So far during this tutorial we have not concerned ourselves with specifying meaningful outcomes on any of our States. This has meant that although we have learnt to deposit assets, execute state transitions off chain, and to finalize an outcome via challenge or conclude, no participant could get their funds back out of the state channel and into their ethereum account.

The time has come to tackle this issue! Nitro protocol is an extension of ForceMove protocol that we have dealt with so far. ForceMove specifies only that a state should have a default outcome but does not specify the format of that outcome, and simply treats it as an unstructured bytes field. In this section we look at the outcome formats needed for Nitro.


Nitro supports multiple different assets (e.g. ETH and one or more ERC20s) being held in the same channel.

Outcomes that allocate

An Allocation outcome specifies

  • at least one asset holder (which in turn is tied to a specific asset type such as ETH or an ERC20 token)
  • for each asset holder, an array of (destination, amount) pairs known as an Allocation, and indicating a payout of amount tokens to destination.

The destination here might be an external destination (which means the assets will get paid out to an ethereum address) or a channelId. In the code snippet below, we import convertAddressToBytes32 to convert an ethereum address to an external destination.


In nitro protocol, channels can allocate funds to other channels!

To construct an outcome, you can import the Outcome type to ensure you're getting the basics right. Then go ahead and attach that outcome in place of the [] we used as a placeholder previously on our States:

// In lesson11.test.ts
const { HashZero } = ethers.constants;
import {
} from '@statechannels/nitro-protocol';
const assetOutcome: AllocationAssetOutcome = {
allocationItems: [
{destination: HashZero, amount: '0x03'}, // 3 wei
// other payouts go here,
// e.g. having destination: someOtherExternalDestintion
// or destination: someChannelId
const outcome: Outcome = [assetOutcome];
// Additional assetOutcomes could be pushed into this array
// Optional: this encoding function is a part of the getVariablePart helper function that we are already using
// So you most likely won't need to use it.
const encodedOutcome = encodeOutcome(outcome);

Outcomes that guarantee

Guarantee Asset Outcomes are similar to Allocation Asset Outcomes, only they not have any amounts. Their purpose is to simply express an ordering of destinations for a given asset holder (say, a given token).

A channel that has a guarantee outcome is said to be a guarantor channel.

Now while we can transfer assets out of a channel, the terminology is instead to claim on a guarantor channel. Assets will be paid to beneficiaries of the target channel, but in an order of precedence defined by the guarantor. More on this later.


For simplicity, the on-chain code assumes that neither kind of allocation has any repeated entries.

Constructing the right kind of object in typescript is straightforward:

// In lesson12.test.ts
import {GuaranteeAssetOutcome} from '@statechannels/nitro-protocol';
const assetOutcome: GuaranteeAssetOutcome = {
assetHolderAddress: process.env.ETH_ASSET_HOLDER_ADDRESS,
guarantee: {
targetChannelId: HashZero,
destinations: [

Encoding of all outcomes (including guarantee outcomes) is handled seamlessly by the getVariablePart function.

Don't worry if it is not yet clear why we need guarantor channels or outcomes that guarantee. They are a useful tool for virtually funding channels, but can be safely ignored if you are just trying to understand directly funded channels.

Last updated on by George C. Knee