Research

⚡ [Analysis] Routing Fee Economics of the Lightning Network

Messari

Mar 30, 2019 ⋅  1 min read

Lightning Network routing economics comes down to two issues: are there enough funds in a channel and do fees attract liquidity? Of the 7,615 Lighting nodes currently operating, only a handful are actively monitoring their channel liquidity. The checklist for managing a node is often to long, pointing towards an area of future investment and automation. To better understand Lightning fee economics, BitMEX played with its own node's fee rate, finding a general fee equilibrium point exists on the new market. These fees will change as investments move towards the 'risk free rate of return' Lighting promises Bitcoin ($BTC) holders. Investment in the network will be defined by larger financial and economic conditions and demand for Lighting transactions.

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