LNBϟG on Nostr: Another interesting thought came to me. If you run your personal node with the goal ...
Another interesting thought came to me.
If you run your personal node with the goal of using it to send payments from that node, perhaps it's a family server, and you decide to run it with public channels to also earn from routing, then here's another interesting rule for you.
Set a high outgoing fee for all the channels you have open to the public. Why do this? If you set a low fee—for example, by default, the LND server has very low fees like a Fee Rate of 1 ppm and a Base Fee of 1 millisatoshi—then your node could be used by other nodes in a way that’s not beneficial for you.
Quite quickly, a node might connect to you that has outgoing fees deliberately higher than yours. Such a node, connecting to you and opening a channel with you, can transfer its liquidity to you, squeezing out the liquidity that you have carefully distributed by opening channels to other nodes where you intended to pay for services. Liquidity from such channels will be redirected to these nodes, and your liquidity will be replaced by the liquidity of just one channel that is open with this malicious node. All the payments you want to make to vendors or services, with nodes you have diligently opened channels with, will be forced to go through only that single channel (because the liquidity will now be located only in that channel). You will have to use the fees set by that node further in other channels.
For what purpose might such a node do these bad things? There could be various reasons. For example, that node might just use your node to rebalance its channels. It uses its on-chain bitcoins to then put them in a channel with you, pump them through you to its other channels because your node had very low fees, and it would be financially profitable for it to thus rebalance its other channels through you.
Or perhaps it just opens this channel to you, and senders in the Lightning Network often choose this channel, as it promises cheaper routes.
Thus, we conclude. If you run your own node not with the goal of monetization, but to use your bitcoins for payment through the Lightning Network, always open outgoing channels and set them with deliberately high fees. Set fees that are even higher than the network average. In fact, you can use fees many times higher than the average. After all, if you pay from your node, then the first outgoing point, which is your node, incurs zero fees. So, no matter how much you increase the outgoing fee in your channels, it will not affect the fees of payments sent from your node. Therefore, in this scenario, you won’t make it worse for yourself. But by having deliberately high fees, you prevent such a scenario of liquidity pumping. And if someone still sends payments through you, you’ll at least earn decently, including on fees. However, of course, if you follow this advice, you're not likely to earn much from routing payments. But that’s not why we opened such a node. So everything will be fine here.
#LightningNetwork #tips #hints #LNBiG
If you run your personal node with the goal of using it to send payments from that node, perhaps it's a family server, and you decide to run it with public channels to also earn from routing, then here's another interesting rule for you.
Set a high outgoing fee for all the channels you have open to the public. Why do this? If you set a low fee—for example, by default, the LND server has very low fees like a Fee Rate of 1 ppm and a Base Fee of 1 millisatoshi—then your node could be used by other nodes in a way that’s not beneficial for you.
Quite quickly, a node might connect to you that has outgoing fees deliberately higher than yours. Such a node, connecting to you and opening a channel with you, can transfer its liquidity to you, squeezing out the liquidity that you have carefully distributed by opening channels to other nodes where you intended to pay for services. Liquidity from such channels will be redirected to these nodes, and your liquidity will be replaced by the liquidity of just one channel that is open with this malicious node. All the payments you want to make to vendors or services, with nodes you have diligently opened channels with, will be forced to go through only that single channel (because the liquidity will now be located only in that channel). You will have to use the fees set by that node further in other channels.
For what purpose might such a node do these bad things? There could be various reasons. For example, that node might just use your node to rebalance its channels. It uses its on-chain bitcoins to then put them in a channel with you, pump them through you to its other channels because your node had very low fees, and it would be financially profitable for it to thus rebalance its other channels through you.
Or perhaps it just opens this channel to you, and senders in the Lightning Network often choose this channel, as it promises cheaper routes.
Thus, we conclude. If you run your own node not with the goal of monetization, but to use your bitcoins for payment through the Lightning Network, always open outgoing channels and set them with deliberately high fees. Set fees that are even higher than the network average. In fact, you can use fees many times higher than the average. After all, if you pay from your node, then the first outgoing point, which is your node, incurs zero fees. So, no matter how much you increase the outgoing fee in your channels, it will not affect the fees of payments sent from your node. Therefore, in this scenario, you won’t make it worse for yourself. But by having deliberately high fees, you prevent such a scenario of liquidity pumping. And if someone still sends payments through you, you’ll at least earn decently, including on fees. However, of course, if you follow this advice, you're not likely to earn much from routing payments. But that’s not why we opened such a node. So everything will be fine here.
#LightningNetwork #tips #hints #LNBiG
quoting nevent1q…wjmzI want to share some insights that came to my mind.
For example, if you have a channel with a certain node and you have an outgoing fee on your side, say, 200 ppm, and the remote node has a higher fee on you than your value, for example, 500 ppm, then it can be said with certainty that it's unprofitable for you to rebalance other channels through this one (to let liquidity flow into this channel).
So if you want to rebalance any of your other channels so that sats flow from such channels into this channel, it will never be profitable for you because you'll pay at least the same fee as that set on the remote side of this channel for rebalancing. In our example, this is 500 ppm. Therefore, when sats flow into this channel of yours and it's time to use them, and you send them to that side via forwarding payments, this channel will only bring you profit determined by the fee on your side, which in our example is 200 ppm. So you will always lose.