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Even though I don't run lnd v0.18 on c-otto.de, yet, I already tweaked my scripts so that they are ready to set negative inbound fees once the feature is available. For this, I came up with the following rules (which, of course, are not set in stone) and I'd be very happy to hear your feedback.
Default 0. Obviously.
Still 0 if at least one of the following is true:
  • less than 15M sat on the remote side: those sats will flow naturally
  • more sats on my side than on the remote side: 50/50 is fine
  • channel is less than 45 days old: maybe the natural flow is good enough
  • I haven't earned at least 2,000sats routing to that peer: I don't feel the need to pay in order to have more sats on my side
Otherwise, I will set some negative fee rate, i.e. introduce a rebate for sats flowing from that peer. This negative fee rate is relative to the outbound fee rate, starting with -50%. This also means the rebate is low (possibly 0) if my outbound fee rate is low, and higher for lucrative peers where I charge a lot (like LOOP).
If, for example, I charge 800ppm for outbound traffic, I might set the inbound fee rate to -400ppm (-50%). For peers where I have lots of remote liquidity, I increase the rebate to -75% or, if there's even more remote liquidity, to -85%.
For very specific peers (like LOOP) I don't bother with this configuration and, instead, configure a fixed rebate of -1000ppm or so.
I can't wait to see how this works out in practice. What do you think?
Yeah. I tweaked charge-lnd yesterday. I am ready to go too. But will wait at least until v0.18.1 is shipped.
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It's a good start to see how the rest of the network respond. This negative fees give to a node operator a way to "manipulate" the fixed inbound rate set by the other side of the channel.
This is going to generate more flow of sats for sure in the global view of the network, successful nodes like your will route more.
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@C_Otto side question for those of us who develop node managment tools: did lnd also add/update a lncli/rest api so we can check if the feature is supported and enabled by the node, or do we have to rely on lnd version for now?
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It's part of the new proto file released with lnd v0.18, with additional parameters for updatechanpolicy in lncli and the APIs. I don't see the reason, but you could check the existence of these parameters if you don't know the version of lnd itself.
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There is one thing I will try with this update. The current fee strategy of lnshortcut.ovh is basically 0 base fee and 1 ppm for most channels, and 0 ppm if some channels need more inbound balance. What I want to try is to increase fees on channels that are sinks, up to to a point they still route a lot (let's call it a feerate of N ppm), but in the mean time, have a fee rate on source channels of -(N-1) ppm. So in the end, my effective feerate is still 1 ppm, but I get more traffic in the direction that didn't route, so also more traffic in the other direction that receives a fee
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Sorry to say, but can't understand
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Ask a question?
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Isn't it too complicated a payment system that you're suggesting? I mean to prevail Bitcoin against fiat, don't we need a much simpler solution?
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This only affects my node, not the whole lightning network. As such, I think you're dealing with philosophical questions, whereas I try find concrete answers to problems I face myself.
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Ohh, okay then. I thought it's for the whole network. Sorry, that's my bad. But still I would love to get your response on my questions.
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Still having a hard time understanding this inbound fee policy
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Ask a question?
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Yeah how does this differ from the current lightning fee settings
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Current fee settings don't allow inbound fees.
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No implementation supports it.
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Now i see it in my node. Reading this post I am setting my inbound fee at 0 for now. But if I want more sats for outgoing I can set the inbound fee to negative?
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No, that way you'd earn less instead of more.
@C_Otto Can you elaborate (or point me to other resources) where you state your goals or philosophy with these policies?