Scaling Lightning Safely With Feerate-Dependent Timelocks

Feerate-Dependent Timelocks (FDT) present a dynamic that is reshaping transaction processing within certain blockchain networks. The implementation of FDT has led to the emergence of a dual fee structure, where transactions can be processed faster if an out-of-band fee is paid, effectively reducing in-band fees. This system has been observed to mutually benefit both miners and transaction senders.

Miners are particularly incentivized by this model as they can offer a discount on fees—around 5% less than the standard in-band fee—which encourages users to opt for the out-of-band payment method. This not only increases the speed at which miners can execute these transactions but also has the potential to increase their profits beyond the savings afforded to the senders. From the perspective of the senders, the advantage is clear: a reduction in transaction costs by the same percentage as the miners' discount.

As empirical evidence suggests, the adoption of FDT has resulted in a general decrease in observed fees across the board. Moreover, transactions tied to FDT tend to reach maturity more rapidly compared to traditional ones. This acceleration in processing times combined with cost savings solidifies the attractiveness of the FDT mechanism for both parties involved. Consequently, this innovative fee structure is gaining traction due to its capacity to streamline mining operations while simultaneously providing economic benefits to users initiating transactions.