Mitigating Channel Jamming with Reputation Credentials: a Protocol Sketch

Summary:

The Lightning Network developers have proposed a formalization of a reputation-based scheme that aims to solve channel jamming. The system relies on "credentials" issued by routing hops and requested to be attached to each HTLC forward request, which can be used by a reputation algorithm to reward/punish payment senders and allocate channel liquidity resources efficiently. The protocol description can be found in the GitHub repository along with few extensions already to the BOLTs. There is also a work-in-progress proof-of-concept in LDK.This work builds on previous reputation-scheme research and integrates the more recent proposals of upfront fees as a straightforward mechanism to bootstrap the reputation system. The proposal aims to use reputation credentials to allow HTLC traffic-shaping, which not only protects against jamming situations but also allows active HTLC traffic-shaping. The current reputation-credential architectural framework assumes credentials distribution at the endpoint of the network. However, the framework should be flexible enough for the credentials to be harvested by the LSPs and then distributed in a secondary fashion to their spokes.The mitigation is effective, incentive-compatible, can be made transparent from the user, and can conserve high-level privacy. About the ease of implementation, there are few protocol messages to modify, a HTLC intercepting API is assumed as supported by the implementation, onion messages support is also implied. There could be a concern about the centralization inertia introduced by a reputation system. On the ecosystem impacts, it should be studied that this proposal would impact things like inbound channel routing fees, ratecard, or flow-control valve and the whole liquidity toolchain.On the proposal modularity and flexibility, each routing node has oversight on its routing policy, acquisition methods, credentials to liquidity rate. The credentials framework can be extended beyond solving jamming as a generalized risk-management framework for Bitcoin decentralized financial network. Feedback is welcome.

Updated on: 2023-06-03T10:46:47.856687+00:00