Node runners: How to became a LSP \ stacker news ~bitcoin

9112 sats \ 21 comments \ @DarthCoin 26 Nov 2023 bitcoin

This mini guide is dedicated to all node runners that want to give a purpose more to their LN node.

I really hope that all those Plebnet node runners are reading this mini guide and give use of their LN nodes. This liquidity is what is needed right now for regular users.

I would like to explain some simple steps about how you can offer LN liquidity services for mobile node users. This could be also that "uncle Jim" scenario, where you are offering LN services for your family and friends, that do not/can't run their own node and just want a way to use LN in a safe and private way, self-custodial.

REMINDER:

LSP do not hold user funds! It just provide liquidity. This is NOT custody of users funds, is just a way to provide, fast opening channels and good routes for users payments. Read more here what is a LSP by @TheBTCManual
LSPs are very important for mobile private nodes users, to be able to open good channels that offer good liquidity. Not all LN node in the network are willing to offer this kind of services, because a private node is not always online and is not doing any routing, so those funds are exclusively for their own payments, so the LSP cannot use them for routing. So in some way they depend on users traffic. If the user is not using these funds to do payments, the LSP is not earning any fees. Or even worse, if is opening an inbound channel for the user, the LSP is literally putting money from his pocket into a channel that never move.
Is important that these channels services are for users that have most of the time traffic in and out.

Some requirements are to mention first:

you have a good LN public node, with history, with good channels, good liquidity, good maintenance.
you run a LND node. This scenario is only for LND node, no CLN, Eclair, LDK for the moment.
you know very well how to maintain your liquidity in such way that could offer smooth and fast payments.
fees you would apply are up to you, but I suggest to not let the greed controls you.
you are familiar with Linux and CLI, installing software. NO NEED for noobs that knows only how to use Umbrel and Windows.
willing to maintain the service for your users as long as you could. Be fair and help them as much as you can.

This solution is based on Dunder LSP specs, that are open source, made by @hampus , developer of Blixt Wallet. All contributions to improve the code are welcome!

This Dunder LSP is offering right easy onboarding for new Blixt wallet users, a full LND node on your mobile (I wrote a full step-by-step guide here).

I wrote all the documentation for Blixt wallet, with guides and FAQ. And here is one that specifically talk about how to use Dunder LSP in your Blixt wallet.

So what steps you should do as a LND node runner?

Install Dunder LSP software on your own node machine
Set your own Dunder rules for fees, size of the channels etc
Make some tests with your own Blixt wallet, opening an on-demand channel with 0-conf, instant
Make some more tests with your family/friends Blixt users, to be sure your node is responding well and can route well all the payments.
List your Dunder LSP services on the Blixt community peers - soon maybe this list will be integrated directly into Blixt UI so new users can pick easily their peers. Right now is just list where Blixt users are posting their preferred peers to use with Blixt, like a vouched list of peers.
Give feedback to Hampus, post issues on Dunder Github, if you have, participate with PRs for the code. being open source also can be extended to be a LSP standard for other LN implementations and LN mobile nodes (Zeus, Mutiny, Electrum, Breez, Phoenix).

Only by collaborating, testing, using and improving we can go forward !

Happy Lightning!

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362 sats \ 1 reply \ @justin_shocknet 26 Nov 2023

One of the things we hope to do with Lightning.Pub is enable bootstrap peering to/from other LPubs.

Using web-of-trust principles over the nostr's social graph, your node could identify good bootstrap peers endorsed by your follows list.

These "BSP's" would allow for more opportunistic liquidity options, rather than reliance on for-profit services. This would greatly increase decentralization while compressing costs.

There's a few things that need to be qualified of course as mentioned in the OP, which nodes could easily communicate over nostr, but mostly it's a matter of building out good automation.

21 sats \ 0 replies \ @DarthCoin OP 26 Nov 2023

Super cool idea !

198 sats \ 2 replies \ @Lederhosen 26 Nov 2023

@DarthCoin After spending several hours on reading your published posts and articles from the past over the last days, i have to say - kudos!

0 sats \ 1 reply \ @DarthCoin OP 26 Nov 2023

Did you read all of my 60+ Bitcoin and LN guides I wrote on substack? https://darthcoin.substack.com/s/english/archive?sort=new

btw are translated also in more languages...

188 sats \ 0 replies \ @Lederhosen 26 Nov 2023

I think i'm about half way through...

10 sats \ 0 replies \ @BlokchainB 26 Nov 2023

👏👏

10 sats \ 0 replies \ @nikotsla 26 Nov 2023

LFG! :)

60 sats \ 0 replies \ @jesse_amboss 26 Nov 2023

This seems like a part about specifically being an LSP to private, mobile nodes using the Dunder LSP spec.

To become an LSP that uses public channels, you can simply post an offer on Magma. The form will answer the questions about what fees you will charge. Once you've completed a couple orders in a timely fashion, you'll earn reputation and be recommended more often to buyers.

This is a competitive market, so aggressive pricing may be necessary to complete your first orders and earn reputation.

0 sats \ 2 replies \ @lada 27 Nov 2023

And open yourself to risk of force closures amidst high fee environment? No thanks.

Even having high quality peers can't guarantee not having force closes that costs up to 200k sats in sweep fees, what more offering yourself to be the channel initiator to unreliable noobs.

10 sats \ 1 reply \ @DarthCoin OP 27 Nov 2023

... then have fun staying onchain...

0 sats \ 0 replies \ @lada 27 Nov 2023

Unfortunately, that IS the rational decision for a working class sat-stacker like me.

I run a node. I buy coffee from my local cafe with lightning. I eat force close sweep fees.

But I can't afford to act philanthropically. I'm here to stack sats, not to lose em.

0 sats \ 1 reply \ @sime 26 Nov 2023

I guess Blixt is explicitly supporting Dunder LSP.

Meaning if other mobile node wallets wanted this functionality, they need to support Dunder LSP?

0 sats \ 0 replies \ @DarthCoin OP 26 Nov 2023

Dunder was made to easily onboard new Blixt users with opening channels from a LN payment. Same as is doing Zeus with embedded node. Only that Dunder is also offering little bit of inbound liquidity up to 400k per channel. This way new users could also being able to receive more after the first deposit.

Imagine you are onboarding a new user that have no coins whatsoever in onchain or LN. You, as his mentor, you pay his first LN invoice to Dunder server and he gets the sats straight into his new Blixt wallet.

This limit of max chan is set by each Dunder LSP operator..

Now, to answer your question. Any other mobile node could open a regular channel with Blixt node but not yet supported with 0-conf wrapped invoices. This will be fixed in the future by making a LSP standard code for all types of LSP.

0 sats \ 1 reply \ @nerd2ninja 26 Nov 2023

Careful not to get your 0-conf channel fullrbf'd but that's my only point of contention. Great article thanks.

753 sats \ 0 replies \ @DarthCoin OP 26 Nov 2023

That means you are choosing the wrong LSP. But the thing is that a LSP doing fullrbf on a 0-conf is against himself. Risking his whole reputation for a meaningless LN channel... from which can earn more sats in fees forever.

0 sats \ 5 replies \ @03dc32ac84 26 Nov 2023 freebie

I don't like this setup based on following excerpt of the docs.

Intercept the incoming HTLC

Settle it itself instead of continuing forwarding it (by giving preimage to LSP)

Open a channel to the wallet with push amount

The LSP can steal incoming payments.

In step 2 the LSP is granted custody of the incoming payment. The LSP-client can only hope that the LSP forwards the payment.

I am not a lawyer and just a dev. But processing payments on behalf of others and taking custody in the procesd might require a money transmitter license in your jurisdiction.