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feelancer21 / Feelancer
npub17hp…4zs6
2024-09-30 22:32:24

feelancer21 on Nostr: I see an interesting game theory emerging if we ever have negative fees in the ...

I see an interesting game theory emerging if we ever have negative fees in the Lightning Network. What could happen: On larger channels, it already makes sense to charge higher outbound fees than on smaller ones, as larger HTLCs command a certain premium. However, inbound discounts will likely be smaller on larger channels, or the (negative) inbound fee rates higher, meaning a node with a large channel will tend to achieve a larger margin. For smaller payments, there's automatically an incentive to use smaller channels, particularly on the inbound side. This also means that liquidity in smaller channels can be more effectively managed through fee rates in the case of negative fees. Larger channels, on the other hand, will need to be actively rebalanced.
Author Public Key
npub17hpzkxxrks8r6gr7haz92f9nqlcpk2zfnsj3zl2xjn9ecdzvy87qlf4zs6