Author: ZmnSCPxj 2018-04-13 13:26:15
Published on: 2018-04-13T13:26:15+00:00
In an email conversation, ZmnSCPxj and Benjamin Mord discuss the importance of adjusting on-Lightning `fee_base_msat` and `fee_proportional_millionths` of channels as a critical signalling mechanism that can improve expected channel lifetime and routing efficiency. They also touch on the power law assumption of transaction size distribution and suggest permitting a price exponent which may be optionally set to something larger than 1. Larger payments have a lower chance of successfully propagating through the network as every channel in its route needs to have the requisite capacity, so it somewhat balances out. ZmnSCPxj notes that adding a nonlinear component would be difficult to add on to the protocol currently as there is no provision for it in the protocol. They further discuss combining nonlinear pricing with AMP proposal and how it could greatly improve economic efficiency. The earlier AMP proposal by roasbeef is back-compatible but does not support a proof-of-payment compatible with ZKCP protocols. In response to Mord's question about whether channels have the option of publicizing their balances to improve routing performance and competitive differentiation among competing routes while balancing privacy with efficiency, ZmnSCPxj suggests that to an extent, it is possible to hint the suitability of a channel for routing in a particular direction without completely leaking the balance in detail by adjusting the on-Lightning `fee_base_msat` and `fee_proportional_millionths` of channels. By having a high balance on a channel, you reduce your side of the fee for that channel, encouraging others to use it and hopefully pay you on a depleted channel. No current node software implements this yet.
Updated on: 2023-05-24T22:04:00.044053+00:00