Author: Antoine Riard 2023-05-17 18:52:22
Published on: 2023-05-17T18:52:22+00:00
The email thread discusses the vulnerability of the Lightning Network's endorsement scheme due to the lack of transitivity of the reputation acquisition cost between payment path hops. If a node gains reputation during low fee times, they cannot use it when fees are high. However, if there is a fee spike, the reputation will change. Nodes can go rogue, but the price of a good reputation aims to be similar to the amount of damage they can create. The endorsement scheme assumes some synchronicity in the setting of routing fees by the hops, but there will be variations based on pricing of liquidity, historical view of LN gossips, and downstream link topology. The effect of dynamic reputation windows on payment reliability is also observed, as sudden changes in links throughput might break the historical liquidity buckets of routing scoring algorithms. The Lightning Network uses fees as a native way to put a price on having a good reputation. Reputation gained today cannot be used in the distant future, and funds need to be invested continuously to keep a good reputation. Nodes do not gossip about their peers' reputation, but only communicate whether an HTLC is endorsed or just neutral. The thread concludes with a discussion on how large routing nodes may have sufficient data for informed decisions, while edges may be more vulnerable.
Updated on: 2023-06-03T12:51:54.486715+00:00