Mitigating Channel Depletion in the Lightning Network: A Survey of Potential Solutions

In exploring the challenges and solutions associated with payment failures in Lightning networks, it's essential to acknowledge that addressing such issues inherently involves some trade-offs in privacy. However, the primary focus is not to eliminate onchain actions entirely but rather to minimize them to a level that supports effective scaling. The concept of forwardable peerswaps emerges as a notable solution in this context, offering a way to extend the impact of a single onchain action across multiple channels. This approach not only facilitates the rebalancing of several channels simultaneously but also maintains privacy since the specifics of in-Lightning payments remain unaltered. Unlike strategies that rely on local forwarding or centralized routing, forwardable peerswaps preserve the confidentiality of transaction details within the Lightning network.

Additionally, the introduction of sidepools presents another avenue for enhancing the scalability of Lightning payments without compromising existing privacy measures. Sidepools function as multiparty channels that remain unpublished, thus ensuring that the current routing mechanisms continue uninterrupted and that the privacy of routing information is safeguarded. Since these channels are designed exclusively for the purpose of rebalancing two-party channels, they offer a strategic method for consolidating numerous in-Lightning payments into fewer onchain actions. This strategy aligns with the overarching goal of scaling efficiently by reducing the necessity for onchain activities while avoiding a complete overhaul of the routing infrastructure. In essence, both forwardable peerswaps and sidepools exemplify innovative approaches to improving the scalability of the Lightning network through judicious management of onchain actions, all while upholding the principle of privacy preservation.