diff --git a/client_test.go b/client_test.go
index ba3ff6e..a6297dd 100644
--- a/client_test.go
+++ b/client_test.go
@@ -13,7 +13,6 @@ import (
 	"github.com/lightninglabs/loop/loopdb"
 	"github.com/lightninglabs/loop/swap"
 	"github.com/lightninglabs/loop/test"
-	"github.com/lightningnetwork/lnd/input"
 	"github.com/lightningnetwork/lnd/lnrpc"
 	"github.com/lightningnetwork/lnd/lntypes"
 	"github.com/stretchr/testify/require"
@@ -277,30 +276,13 @@ func testLoopOutResume(t *testing.T, confs uint32, expired, preimageRevealed,
 	// Expect client to register for our expected number of confirmations.
 	confIntent := ctx.AssertRegisterConf(preimageRevealed, int32(confs))
 
-	// Assert that the loopout htlc equals to the expected one.
-	scriptVersion := GetHtlcScriptVersion(protocolVersion)
-	var htlc *swap.Htlc
-
-	switch scriptVersion {
-	case swap.HtlcV2:
-		htlc, err = swap.NewHtlcV2(
-			pendingSwap.Contract.CltvExpiry, senderKey,
-			receiverKey, hash, &chaincfg.TestNet3Params,
-		)
-
-	case swap.HtlcV3:
-		htlc, err = swap.NewHtlcV3(
-			input.MuSig2Version040,
-			pendingSwap.Contract.CltvExpiry, senderKey,
-			receiverKey, senderKey, receiverKey, hash,
-			&chaincfg.TestNet3Params,
-		)
-
-	default:
-		t.Fatalf(swap.ErrInvalidScriptVersion.Error())
-	}
-
+	htlc, err := GetHtlc(
+		hash, &pendingSwap.Contract.SwapContract,
+		&chaincfg.TestNet3Params,
+	)
 	require.NoError(t, err)
+
+	// Assert that the loopout htlc equals to the expected one.
 	require.Equal(t, htlc.PkScript, confIntent.PkScript)
 
 	signalSwapPaymentResult(nil)
@@ -319,7 +301,7 @@ func testLoopOutResume(t *testing.T, confs uint32, expired, preimageRevealed,
 		func(r error) {},
 		func(r error) {},
 		preimageRevealed,
-		confIntent, scriptVersion,
+		confIntent, GetHtlcScriptVersion(protocolVersion),
 	)
 }
 
diff --git a/loopin_test.go b/loopin_test.go
index ca3b707..de4452b 100644
--- a/loopin_test.go
+++ b/loopin_test.go
@@ -8,10 +8,8 @@ import (
 	"github.com/btcsuite/btcd/btcutil"
 	"github.com/btcsuite/btcd/wire"
 	"github.com/lightninglabs/loop/loopdb"
-	"github.com/lightninglabs/loop/swap"
 	"github.com/lightninglabs/loop/test"
 	"github.com/lightningnetwork/lnd/chainntnfs"
-	"github.com/lightningnetwork/lnd/input"
 	invpkg "github.com/lightningnetwork/lnd/invoices"
 	"github.com/lightningnetwork/lnd/routing/route"
 	"github.com/stretchr/testify/require"
@@ -450,37 +448,10 @@ func testLoopInResume(t *testing.T, state loopdb.SwapState, expired bool,
 		pendSwap.Loop.Events[0].Cost = cost
 	}
 
-	var (
-		htlc *swap.Htlc
-		err  error
+	htlc, err := GetHtlc(
+		testPreimage.Hash(), &contract.SwapContract,
+		cfg.lnd.ChainParams,
 	)
-
-	switch GetHtlcScriptVersion(storedVersion) {
-	case swap.HtlcV2:
-		htlc, err = swap.NewHtlcV2(
-			contract.CltvExpiry,
-			contract.HtlcKeys.SenderScriptKey,
-			contract.HtlcKeys.ReceiverScriptKey,
-			testPreimage.Hash(),
-			cfg.lnd.ChainParams,
-		)
-
-	case swap.HtlcV3:
-		htlc, err = swap.NewHtlcV3(
-			input.MuSig2Version040,
-			contract.CltvExpiry,
-			contract.HtlcKeys.SenderInternalPubKey,
-			contract.HtlcKeys.ReceiverInternalPubKey,
-			contract.HtlcKeys.SenderScriptKey,
-			contract.HtlcKeys.ReceiverScriptKey,
-			testPreimage.Hash(),
-			cfg.lnd.ChainParams,
-		)
-
-	default:
-		t.Fatalf("unknown HTLC script version")
-	}
-
 	require.NoError(t, err)
 
 	err = ctx.store.CreateLoopIn(testPreimage.Hash(), contract)
diff --git a/loopout.go b/loopout.go
index ff9bd92..eca55bc 100644
--- a/loopout.go
+++ b/loopout.go
@@ -1355,12 +1355,28 @@ func (s *loopOutSwap) createMuSig2SweepTxn(
 		return nil, err
 	}
 
-	signers := [][]byte{
-		s.HtlcKeys.SenderInternalPubKey[1:],
-		s.HtlcKeys.ReceiverInternalPubKey[1:],
+	var (
+		signers      [][]byte
+		muSig2Verion input.MuSig2Version
+	)
+
+	// Depending on the MuSig2 version we either pass 32 byte Schnorr
+	// public keys or normal 33 byte public keys.
+	if s.ProtocolVersion >= loopdb.ProtocolVersionMuSig2 {
+		muSig2Verion = input.MuSig2Version100RC2
+		signers = [][]byte{
+			s.HtlcKeys.SenderInternalPubKey[:],
+			s.HtlcKeys.ReceiverInternalPubKey[:],
+		}
+	} else {
+		muSig2Verion = input.MuSig2Version040
+		signers = [][]byte{
+			s.HtlcKeys.SenderInternalPubKey[1:],
+			s.HtlcKeys.ReceiverInternalPubKey[1:],
+		}
 	}
 
-	htlc, ok := s.htlc.HtlcScript.(*swap.HtlcScriptV3)
+	htlcScript, ok := s.htlc.HtlcScript.(*swap.HtlcScriptV3)
 	if !ok {
 		return nil, fmt.Errorf("non taproot htlc")
 	}
@@ -1368,9 +1384,8 @@ func (s *loopOutSwap) createMuSig2SweepTxn(
 	// Now we're creating a local MuSig2 session using the receiver key's
 	// key locator and the htlc's root hash.
 	musig2SessionInfo, err := s.lnd.Signer.MuSig2CreateSession(
-		ctx, input.MuSig2Version040,
-		&s.HtlcKeys.ClientScriptKeyLocator, signers,
-		lndclient.MuSig2TaprootTweakOpt(htlc.RootHash[:], false),
+		ctx, muSig2Verion, &s.HtlcKeys.ClientScriptKeyLocator, signers,
+		lndclient.MuSig2TaprootTweakOpt(htlcScript.RootHash[:], false),
 	)
 	if err != nil {
 		return nil, err
@@ -1434,7 +1449,7 @@ func (s *loopOutSwap) createMuSig2SweepTxn(
 	// To be sure that we're good, parse and validate that the combined
 	// signature is indeed valid for the sig hash and the internal pubkey.
 	err = s.executeConfig.verifySchnorrSig(
-		htlc.TaprootKey, sigHash, finalSig,
+		htlcScript.TaprootKey, sigHash, finalSig,
 	)
 	if err != nil {
 		return nil, err
diff --git a/swap.go b/swap.go
index caa5d21..d816990 100644
--- a/swap.go
+++ b/swap.go
@@ -82,8 +82,15 @@ func GetHtlc(hash lntypes.Hash, contract *loopdb.SwapContract,
 		)
 
 	case swap.HtlcV3:
+		// Swaps that implement the new MuSig2 protocol will be expected
+		// to use the 1.0RC2 MuSig2 key derivation scheme.
+		muSig2Version := input.MuSig2Version040
+		if contract.ProtocolVersion >= loopdb.ProtocolVersionMuSig2 {
+			muSig2Version = input.MuSig2Version100RC2
+		}
+
 		return swap.NewHtlcV3(
-			input.MuSig2Version040,
+			muSig2Version,
 			contract.CltvExpiry,
 			contract.HtlcKeys.SenderInternalPubKey,
 			contract.HtlcKeys.ReceiverInternalPubKey,