lightning-dev

Liquidity Ads and griefing subtleties

Liquidity Ads and griefing subtleties

Original Postby Matt Morehouse

Posted on: December 13, 2023 19:46 UTC

In the realm of network protocols, simplicity is often equated with reliability and security.

This principle suggests that complex mechanisms such as timelocks may not be necessary or beneficial if a simpler solution can achieve the same goals with fewer potential drawbacks. In the context of channel management, the existing network operates effectively without locking participants into long-term commitments. Specifically, a user like Alice can establish a channel providing outbound liquidity to another user, Bob, without enforcing any restrictions on Bob's ability to close the channel should it fail to be economically viable for him. This flexibility allows for a dynamic allocation of resources without imposing undue constraints on the users.

The question then arises whether a similar approach could apply to scenarios where inbound liquidity is required. The concept here is straightforward: instead of mandating Bob to commit his liquidity to a channel with Alice, she can encourage him to maintain the channel through incentives. These incentives could take the form of routing payments via the channel or compensating Bob directly for the use of his funds. A notable suggestion in this regard is Keagan's idea of streaming lease fees, which offers continuous motivation for Bob to keep the channel operational. This arrangement would involve pre-negotiated terms regarding payment amounts and intervals, adding a layer of predictability to the agreement for both parties involved.

Such a system holds appeal due to its incentive structure, where cooperation is more advantageous than opportunistic behavior. By enabling either party to withdraw from the arrangement with minimal repercussions when it ceases to be mutually advantageous, the protocol remains flexible and user-friendly. This model mirrors the cooperative dynamics that underpin the current network's functioning, bolstering the argument for its practicality and potential success.