Author: René Pickhardt 2022-09-25 19:52:17
Published on: 2022-09-25T19:52:17+00:00
In a Lightning Network mailing list, Lisa Neigut proposed the idea of fee ratecards. These would replace the current fee calculation method and allow channel operators to specify four different rates for a channel's liquidity, which will automatically update depending on the current channel capacity. The four capacity bands are fixed at 0-25%, 26-50%, 51-75%, and 76-100%. Rene suggests that we investigate how fee rate cards interact with other proposals and how we can make them even stronger by combining some of the other ideas.Negative fees are also an interesting idea worth investigating, but there may be unintended side effects with strategic behavior of routing nodes if negative fees produce a negative cost cycle. Additionally, the virtualization of the channel into four smaller channels as suggested by ZmnSCPxj may increase payment latency and decrease reliability. Rene is uncertain if virtualizing the channel into four smaller channels is beneficial for the network. If we move forward with fee rate cards, we should make it an explicit requirement that the fees in higher bands must not decrease, which seems like a very sane requirement. Rene suggests that fee rate cards might actually be more powerful if various fee rate cards are used for various `htlc_maximum_msat` values rather than dividing the channel capacity. This would allow node operators to route large payments when setting up valves, reducing the guessing game and lowering failed attempts and latency.The Lightning Network specification meeting has proposed the use of feerate cards, which allow node operators to experiment with negative fees. The feerate cards would reduce the number of payment attempts required to find an exact channel balance by 2, as well as providing a lower-cost mechanism for discovering which band of payment is likely to succeed. Four evenly spaced buckets would also be used to make it easier to reason about information leakage. It is anticipated that feerate cards will greatly reduce the number of `channel_update`s issued by a node and reduce the need to rebroadcast a `channel_update` when a channel's capacity changes. Negative fees would allow node operators to price the liquidity available in their channel at a discount. However, payment base fees are going away as they do not work with negative rates. The proposal was made possible by Clara Shikleman's push to start thinking about negative fees and ZmnSCPxj's comments on the variability of value of a channel's liquidity based on current capacity. In conclusion, while Lisa's proposal is interesting, Rene suggests investigating how it interacts with other proposals and how we can make her proposal and others even stronger by combining some of the other ideas.
Updated on: 2023-06-03T09:49:04.200407+00:00