A Lightning Network of multi-party mechanisms

The significance of expanding the protocol to incorporate multiparty channel constructs in payment channel networks is a topic that merits considerable attention. Multiparty channel constructions are heralded for enhancing payment reliability and providing service level guarantees within these networks, as highlighted in a detailed analysis available here. Despite these advantages, there's an acknowledgment of the lack of quantification regarding the potential drawbacks, especially in terms of on-chain bandwidth and the costs associated with unilateral exits from such constructs. This gap in analysis indicates an uncertainty about the balance of trade-offs involved in adopting multiparty channel constructs.

Furthermore, there are specific concerns regarding the compatibility of existing pathfinding algorithms with the proposed multiparty channel model. Most current pathfinding solutions are designed with the assumption that channels connect exactly two nodes, which aligns with engineering standards but might not be ideal for multiparty constructs. The suggestion that creating virtual two-party channels within these constructs could dilute the routing efficiency benefits they bring to the network adds another layer of complexity to the discussion. This concern underscores the need for further development and refinement of the proposal to ensure that the introduction of multiparty channels does not inadvertently compromise the network's routing capabilities.

Overall, while the move towards multiparty channel constructs promises substantial improvements in payment reliability and service level assurances, it also poses challenges that require careful consideration and innovative solutions, particularly in the areas of on-chain resource utilization and pathfinding algorithm adaptation.