Lightning Liquidity

Fundementals

Running a Node

Can follow the lead of Ride The Lightning (RTL)

Customer Research

Market Sizing

On Merchants

Coinbase Commerce: $200M of transactions in over 2 years. 8k merchants. Many are using stablecoins (USDC, biggest rise).

What are people using LN today for?

Biggest channels,

General ~40M Exchange ~13M Wallet ~4M Commerce ~6M

Implementations

Design 1 - Centralized Service

High-Level Breakdown

  1. Market particpants send bid/ask orders to centralized service
     order_type:       {Bid|Ask}
     order_id:         unique nonce
     account_pub_key:  public key of account doing buying/selling
     account_endpoint: network endpoint of node doing buying/selling
     premium:          the liquidity premium being offered/asked for
     contract_size:    in units of 1000 satoshis
     lease_duration:   in units of 10 days
    
  2. Market finds bid/ask matches according to maintained (and transparent) CLOB
    • A 2-dimensional match between lease duration and order size
  3. Marketplace authority facilitates signing between parties
    1. Creates funding transaction with appropriate CLTV for lease duration (to prevent closing)
    2. Sends transaction to buyer and seller to sign
    3. Marketplace authority publishes transaction

Problems w/ Design:

Design 2 - Smart Contracts

Product

  1. Auction mechanics may (and likely will) impact technical design as is the case with [../lightning-pool