Author: Mark Friedenbach 2018-01-17 04:42:15
Published on: 2018-01-17T04:42:15+00:00
The concept of negative fees arises in the context of peer to peer credit using self-issued IOUs that are atomically swapped via a lightning HTLC. Negative fees may be the norm here as there is an incentive to rebalance from higher to lower interest IOUs. Negative shadow prices are important for optimality of constrained network markets where flows in opposite directions cancel, such as with lightning. It is unclear how well the analogy holds, but it is worth considering. The routing protocol difficulty for supporting negative fees is not documented, but it is suggested that the protocol should support negative fees even if an individual routing implementation prefers to treat it as zero for simplicity. The decision should be up to the implementation rather than a protocol constraint.
Updated on: 2023-05-24T18:35:03.328284+00:00