Published on: 2022-06-29T15:34:21+00:00
In a recent discussion on optimizing Lightning Network payments, several ideas were presented. One suggestion involved generating local estimates for speed and reliability by regularly sending onion messages or designed-to-fail HTLCs. Another idea was to use feerate cards, which map probability of success ranges to a feerate. However, one participant pointed out that probability of success isn't a real measure for payers and instead suggested using fee budgets as the cost of failure.The feerate card is evaluated by plugging in the cost-of-failure-for-this-entry, obtained by multiplying (100% - middle probability of success) by the fee budget, into each entry of the feerate card and picking the lowest total fee. The goal is to optimize for low fee. The discussion also included a framework for optimizing base fees by setting F to be sats/tx and V to be txs/hour. However, it was noted that balanced flows are more important than maximally profitable ones, as they allow the channel to remain open. To achieve balanced flows, heuristics targeting a constant balance of 50% can be utilized.Additionally, all published nodes should support some kind of onchain/offchain swap capability to keep channels balanced and avoid needing to close them. ZmnSCPxj suggests that swap nodes may be more beneficial than LSPs in fixing fee imbalances and maintaining older channels. There is a need to address imbalances caused by collecting fees in order to preserve older channels, and this proposal could potentially provide a solution. However, further information is needed to fully understand the context and implications of this proposal.Recently, Rene Pickhardt presented a work-in-progress concept called "Price of Anarchy", which is similar to the cost of decentralization of Bitcoin and the cost of the Tragedy of the Commons. The Braess Paradox states that adding more roads can cause more traffic, which means that it may actually be better to have a centralized authority that assigns who can be a forwarding server because that worked so great with the Web. Fee setting as flow control is another concept presented by Rene Pickhardt. Every channel is a marketplace where the sats inside the channel are being sold.The strategy of setting fees based on the balance is expected to become a dominant strategy for forwarding nodes in the Lightning Network. The leakage of balance information through feerates creates privacy concerns, so some fuzzing and mitigations can be implemented to reduce the privacy leakage. The Lightning Network community is exploring various alternate strategies for fee-setting and improving gossip rates. One suggestion is to factor in the "fee budget" as the "cost of payment failure," which allows lower-success parts of the feerate card to be selected by rebalancer bots with low fee budgets, while actual payers with higher fee budgets tend to select higher-success entries of the feerate card.The Lightning Network has a problem where the network's liquidity is not balanced, causing nodes to become either a "sink" or a "source". To address this issue, it is proposed that all published nodes support onchain/offchain swap capability. Furthermore, the proposal improves the Price of Anarchy by reducing the economic rent imposed on all payers by the @zerofeerouting strategy. However, multiple people paying to the same node may worsen the effective Price of Anarchy.The article discusses the economic rationality of overcharging in Bitcoin's Lightning Network. The author argues that the overcharge strategy may not be a dominant long-term solution, but it can work effectively on a network where most people set their feerates irrationally. Another node operator shares his thoughts on the topic, agreeing with the idea of the fee-based balance leaking strategy. The author suggests that clboss fee adjuster could operate within the provided range, allowing operators to define the desired strategy and let the market win.In conclusion, the Lightning Network can be seen as an aggregation layer for ultimately onchain payments, and the proposal is intended to improve the efficiency of the network's liquidity.
Updated on: 2023-08-01T00:21:20.071257+00:00