Path Queries: Overcoming liquidity uncertainty and other routing limitations

It suggests an innovative approach through cooperative path queries which could significantly enhance payment routing efficiency and reduce associated costs.

Liquidity uncertainty emerges as a primary concern when routing payments, particularly with larger transactions through channels of lower capacity. This issue not only affects the sender's cost but also contributes to a centralizing tendency within the network, as nodes with higher capacity and shorter paths are favored for their reliability. The complexity escalates with the addition of more channels, making successful route prediction increasingly difficult. This unpredictability leads to higher fees and potential payment failures, burdening nodes with wasted resources and locked liquidity.

To address these challenges, the proposal introduces a set of optional messages that enable nodes to share routing information dynamically. These include path_query for requesting routes, path_reply for providing potential paths, and reject_path_query for unsuccessful requests. This model encourages nodes to engage in parallel path discovery, leveraging their knowledge of channel balances to reduce liquidity uncertainty and improve routing efficiency. By allowing concurrent queries, the system aims to expedite the discovery process and enhance the success rates of payment delivery without the need for a fully synced channel graph.

The proposal also underscores the benefits of this approach, such as improved routing for large payments, reduced reliance on a comprehensive channel graph—especially beneficial for mobile nodes—and the facilitation of more dynamic routing policies. Moreover, it promotes a more distributed routing landscape, allowing smaller nodes to compete more effectively and supporting overall network growth.

Privacy and denial-of-service concerns are acknowledged, with the proposal offering flexibility in how much information nodes choose to reveal and allowing them to tailor their response strategies to mitigate potential risks. Additionally, the document suggests expanding the message format to include filters, confidence scores, and time limits to further refine the system's effectiveness and user experience.

Comparatively, the proposed path query mechanism is positioned as a viable alternative to trampoline routing, promising similar benefits without necessitating extensive knowledge of the network's topology. It envisions a single 'trampoline hop' approach that could potentially offer greater efficiency and privacy.

In conclusion, while acknowledging the preliminary nature of the proposal and inviting feedback for refinement, the text emphasizes the potential of cooperative path queries to revolutionize payment routing within the network. By addressing key challenges through innovative messaging and routing strategies, the proposal aims to enhance performance, reduce costs, and support the continued growth and decentralization of the network.