Magma: A New Channel Marketplace on Lightning

We’re proud to announce that Amboss is launching Magma, a peer-to-peer channel marketplace for the lightning network. When new users join lightning, the biggest questions that come up are “Where should I open a new lightning channel?” and “How can I start earning bitcoin using the lightning network?” With Magma, you’ll be able to get paid to open new lightning channels where the market needs channels: no more guesswork.

We built this to be easy: all that’s required is that you run your own lightning node. If you have bitcoin that you are willing to put on the lightning network, you can create an offer and set a price. Anyone using Magma can now view your offer and create an order for a channel. Congratulations, now you’re selling liquidity on the lightning network like a professional channelmonger. Try it out at amboss.space/magma.

Magma is a peer-to-peer marketplace for liquidity on the lightning network under Amboss’s supervision. We know that there are bad actors out there, so we’ve implemented a few simple protections to keep the marketplace safer.

Simple Smart Contracting

Those that are familiar with lightning transactions know that lightning payments happen fast and that they are final. Meanwhile, if you’ve ever sent an on-chain bitcoin transaction, you should know that you need to wait for several confirmations before it’s considered final. Interfacing between a lightning payment and an on-chain transaction means that there are opportunities to cheat. Since opening a lightning channel uses an on-chain transaction, we’ve implemented a solution to build a simple smart contract on lightning: we’re using “HODL” invoices. Payments made to HODL invoices don’t resolve immediately into a completed payment and can be held for several hours. We’ve made it so that the person buying a channel will only pay if the purchased channel is final and confirmed with three confirmations. Amboss can act as a gatekeeper for the lightning payment without ever having custody of user funds. If the channel seller can’t open the channel in time, they won’t receive the lightning payment for the channel open and the HODL payment will be canceled. With a time limit in place, channels must be opened without delay, which results in this marketplace being very responsive to liquidity needs.

Reputation System

In addition to the invoice mechanism to protect users, we’re developing a reputation system to reward rule-following market participants and penalize those that don’t keep their promises. If you were promised a zero-fee channel and aren’t getting one, Amboss will be tracking the fee updates of the channel and reduce their earned reputation accordingly. Repeat offenders or confirmed cheats won’t be allowed to continue participating in channel buys and sells and will have to use one of the other myriad options to get liquidity to their lightning node. An Easy to Use, Inexpensive Marketplace Attracting new channels has been a difficult problem, especially for new lightning users. To date, the easiest tool has been Lightning Labs’ Loop Out, which swaps between bitcoin on lightning and on-chain bitcoin. With Magma, you’ll be able to find inexpensive market pricing for new channels with an easy-to-use interface. We’re really excited for you to try out Magma. We’ve worked tirelessly to bring you the best, but we’re just getting started. As always, reach out to us with any feedback or requests. We’re always open to new ideas!

I like reputation system.

Reminds me how @k00b said in one livestream that SN's daily Yield is the spiritual successor to Web of Trust. And it is true - Bitcoin enables the biggest incentivation for good behavior on the internet ever. (And humanity only really discovered this powerfull idea in the last few months - it's actually crazy if you think about it)

Love the new ideas here.

The escrow is really cool and managing reputation creates a nice network effect for Amboss.

If node is stuck on 1ppm and 1 base can you participate? I saw on Twitter it’s zero base and zero ppm.

It's not a requirement to have zero base fee or zero ppm. It's an optional promise that you can make that Amboss will monitor. It's not required to make these promises. Anyone can participate if they have a public lightning node.

Hopefully this incentivizes more Liquidity Ad development. There will be plenty of arbitrage to be had between LQ Ads and Magma.

https://twitter.com/ambosstech/status/1519030578569355264

The URL in the post is invalid. A working link is:

https://amboss.space/magma

Here's another post, here on SN, using the link for the announcement blog post:

Magma: A New Channel Marketplace on Lightning https://stacker.news/items/23210 https://ambosstech.medium.com/magma-announcement-559806978d44

Here is Amboss' Tweet that kicked off a Twitter thread announcing this:

Magma Announcement, @jackmallers style:

Yo. Today I am extremely excited to finally announce the biggest release that Amboss has ever been a part of. Our announcement of Magma brings us one step closer to a more fair and honest financial system.

https://twitter.com/ambosstech/status/1518970846399762432

And here is the full Twitter thread, unrolled:

Thread by @ambosstech on Thread Reader App https://threadreaderapp.com/thread/1518970846399762432.html

And another Tweet by Amboss kicks off a Twitter thread that describes the product further:

Lightning needs an easy solution to getting connected. For this, we built Magma 🌋.

Want to buy a channel? ✅ Want to sell channels? ✅

It's now a simple process for anyone that has a lightning node and one active⚡️channel.

Pay lightning, get a lightning channel. 🧵👇

[Image]

https://twitter.com/ambosstech/status/1518967839977205763

And here is the full Twitter thread for that, unrolled:

Thread by @ambosstech on Thread Reader App https://threadreaderapp.com/thread/1518967839977205763.html

Nice timing on the post too. Let this be a lesson to any product launchers: launch on SN's AMA day for maximum exposure. 😂

Speaking of which, maybe i missed it, but is it possible to announce the AMA dates in a centralised post? I often see them after the deed, lowering the chances to get answers if one has a question...

If you can elaborate on what you mean by centralized post or how you’d think you’d best learn about amas I’d be happy to try it.

Another thing we’re thinking of doing is having AMAs on one fixed time/day per week

A set time would be nice.

Maybe a sticky post? But typing it out, i don't like it that much actually... It would imply some moderation to decide what to sticky. Which is not really SN's leitmotiv...

Maybe just announce them over Twitter (unless you already do), couple of days ahead of time.

We do announce them on Twitter! Usually well in advance from the stacker_news acccount.

I like it! How would you impose that limit of how many days/months the channel must stay open? What happen if after 2 days the channel get force closed or simple the peer that open it just close it? The reputation system can't help in any way to prevent a force closed channel.

This is true and an area for further development. We can't see who closed the channel without someone telling us. But, we can report the history of early closures and users can come to their own conclusions. We can also allow users to report their consent with an early closure.

I think we need something at LN code level, that will "lock" that channel in some way, for a certain time, defined by both peers. You as mediator for those channels, you can't do much, just playing with that reputation score.

The nuclear option for us is banning someone from the marketplace where they'd have to use another service. We'd try to avoid this, of course, and being accused of "censorship"