Author: Olaoluwa Osuntokun 2018-07-03 19:33:22
Published on: 2018-07-03T19:33:22+00:00
The Lightning Network has been a topic of discussion for many researchers and developers. One of the main topics is the re-balancing of the network, which involves sending cycle transactions to oneself. However, it has been suggested that this may not be necessary as the distribution of funds in channels does not really affect network liquidity. A smart fee strategy could potentially do the job instead. The current fee schedule for c-lightning and lnd uses a "risk factor" to factor in the impact of the time lock on the "weight" of an edge when path finding. In the future, nodes may be able to signal how they wish the fee to scale with the absolute CLTV of the HTLC extend. Additionally, if a "balance disruption" factor is factored in, the fee schedule may include a penalty for unbalancing a channel. This would allow nodes to quantify their apprehension to time locks and also channel balance equilibrium affinity. Some researchers argue that the setting in the Lightning Network is not exactly comparable to the one described in a 2010 paper, which stated that taking fees changes the nodes' balances, therefore selected paths affect the liquidity. Furthermore, the theorem and lemma quoted in a Medium post may not hold since routing fees exist in the Lightning Network. Finally, the use of HTLCs creates a situation where funds are being locked up while routing takes place, which has an impact on the entire flow of the network.
Updated on: 2023-05-20T08:31:35.190250+00:00