Fiber Liquidity Tools

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Blockchain technology has revolutionized the way transactions are executed, but scalability remains a major challenge. Payment Channel Network (PCN), as a Layer-2 scaling solution, has been proposed to address this issue. However, skewed payments can deplete the balance of one party within a channel, restricting the ability of PCNs to transact through a path and subsequently reducing the transaction success rate. To address this issue, the technology of rebalancing has been proposed. However, existing rebalancing strategies in PCNs are limited in their capacity and efficiency. Cycle-based approaches only address rebalancing within groups of nodes that form a cycle network, while non-cycle-based approaches face high complexity of on-chain operations and limitations on rebalancing capacity. In this study, we propose Starfish, a rebalancing approach that captures the star-shaped network structure to provide high rebalancing efficiency and large channel capacity. Starfish requires only $N$-time on-chain operations to connect independent channels and aggregate the total budget of all channels. To demonstrate the correctness and advantages of our method, we provide a formal security proof of the Starfish protocol and conduct comparative experiments with existing rebalancing techniques.

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In this paper we examine the core inbound liquidity bootstrapping problem the Lightning Network faces, and frame it as a resource allocation problem to be solved by the application of market design and auction theory. We present Lightning Pool, a non-custodial channel lease marketplace, implemented as a sealed-bid frequent batched uniform clearing price auction which allows participants to buy and sell capital obligations on the network. We call these capital obligations channel leases. A channel lease can be viewed as a cross between a traditional fixed-income asset and an internet bandwidth peering agreement. Channel leases allow nodes on the network with idle capital to earn yield (based on a derived per-block interest rate) by selling channels to other agents in the marketplace. The duration of such contracts is enforced on-chain using Bitcoin Script. We construct Lightning Pool using a novel design for constructing overlay applications on top of Bitcoin: a shadow chain. Shadow chains allow users to remain in full custody of their funds at all times while also participating in higher level applications that scale via an optimistic transaction cut-through protocol.

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In this work, we revisit the severely limited throughput problem of cryptocurrencies and propose a novel rebalancing approach for Payment Channel Networks (PCNs). PCNs are a popular solution for increasing the blockchain throughput, however, their benefit depends on the overall users’ liquidity. Rebalancing mechanisms are the state-of-the-art approach to maintaining high liquidity in PCNs. However, existing opt-in rebalancing mechanisms exclude users that may assist in rebalancing for small service fees, leading to suboptimal solutions and under-utilization of the PCNs’ bounded liquidity.

We introduce the first rebalancing approach for PCNs that includes all users, following an “all for one and one for all” design philosophy that yields optimal throughput. The proposed approach introduces a double-auction rebalancing problem, which we term Musketeer, where users can participate as buyers (paying fees to rebalance) or sellers (charging fees to route transactions). The desired properties tailored to the unique characteristics of PCNs are formally defined, including the novel property of cyclic budget balance that is a stronger variation of strong budget balance. Basic results derived from auction theory, including an impossibility and multiple mechanisms that either achieve all desiderata under a relaxed model or sacrifice one of the properties, are presented. We also propose a novel mechanism that leverages time delays as an additional cost to users. This mechanism is provably truthful, cyclic budget balanced, individually rational, and economic efficient but only with respect to liquidity.

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Payment channel network (PCN) is a promising off-chain technology for blockchain scalability, but it suffers from poor sustainability in practice. In other words, due to the imbalanced transfer in channels, the balance in one direction of channels gradually becomes exhausted until the PCN is rebalanced via a consensus-based rebalancing protocol, during which the involved channels must be suspended. This paper presents CYCLE, the first off-chain protocol for a sustainable PCN. It not only keeps the PCN at a balanced level consistently but also avoids the channel freeze incurred by the rebalancing protocol, leading to minimum failed payments and sustained PCN service, respectively. CYCLE achieves these benefits based on a novel idea of asynchronous rebalancing. During the normal offchain running, the participants share the information about their payments and asynchronously rebalance the PCN following the principle that payments along circular channels can cancel each other out. To guarantee security, the protocol resolves the disputes resulting from network latency or malicious participants by a message mechanism for synchronization and a smart contract for arbitration. Moreover, to address the privacy concern during the information sharing, a truncated Laplace mechanism is designed to achieve differential privacy. Finally, we provide a proof-ofconcept implementation in Ethereum, over which a real databased simulation shows that CYCLE satisfies 31% more payments than the state-of-the-art technique.

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Payment Channel Networks (PCNs) have been highlighted as viable solutions to address the scalability issues in current permissionless blockchains. They facilitate off-chain transactions, significantly reducing the load on the blockchain. However, the extensive reuse of multi-hop routes in the same direction poses a risk of channel depletion, resulting in involved channels becoming unidirectional or even closing, thereby compromising the sustainability and scalability of PCNs. Even more concerning, existing rebalancing protocol solutions heavily rely on trust assumptions and scripting languages, resulting in compromised universality and reliability.

In this paper, we present Horcrux, a universal and efficient multi-party virtual channel protocol without relying on extra trust assumptions, scripting languages, or the perpetual online requirement. Horcrux fundamentally addresses the channel depletion problem using a novel approach termed flow neutrality, which minimizes the impact on channel balance allocations during multi-hop payments (MHPs). Additionally, we formalize the security properties of Horcrux by modeling it within the Global Universal Composability framework and provide a formal security proof.

We implement Horcrux on a real Lightning Network dataset, comprising 10,529 nodes and 38,910 channels, and compare it to the state-of-the-art rebalancing schemes such as Shaduf [NDSS'22], Thora [CCS'22], and Revive [CCS'17]. The experimental results demonstrate that (1) the entire process of Horcrux costs less than 1 USD, significantly lower than Shaduf; (2) Horcrux achieves a 12%-30% increase in payment success ratio and reduces user deposits required for channels by 70%-91%; (3) the performance of Horcrux improves by 1.2x-1.5x under long-term operation; and (4) Horcrux maintains a nearly zero channel depletion rate, whereas both Revive and Shaduf result in thousands of depleted channels.

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Off-blockchain payment channels can significantly improve blockchain scalability by enabling a large number of micro-payments between two blockchain nodes, without committing every single payment to the blockchain. Multiple payment channels form a payment network, so that two nodes without direct channel connection can still make payments. A critical challenge in payment network construction is to decide how many funds should be deposited into payment channels as initial balances, which seriously influences the performance of payment networks, but has been seldom studied by existing work. In this paper, we address this challenge by designing PnP, a balance planning service for payment networks. Given estimated payment demands among nodes, PnP can decide channel balances to satisfy these demands with a high probability. It does not rely on any trusted third-parties, and can provide strong protection from malicious attacks with low overhead. It obtains these benefits with two novel designs, the cryptographic sortition and the chanceconstrained balance planning algorithm. Experimental results on a testbed of 30 nodes show that PnP can enable 30% more payments than other designs.

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Payment channel networks are a promising solution to improve the scalability of blockchains. However, as the frequency of transactions increases, the channel funds in one direction may be exhausted, thereby preventing further transactions. Therefore, this paper proposes a split multichannel rebalancing strategy based on off-chain payments, utilizing channels with higher traffic load weights and lower loss probabilities to increase the balance of depleted channels. it uses algorithms to evaluate channel payment demands and balance capacities, providing a feasible and efficient rebalancing platform for users in need of balance. Simulation results demonstrate that compared to existing rebalancing strategies, this paper excels in improving channel imbalance and transaction efficiency.

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A leading approach to enhancing the performance and scalability of permissionless blockchains is to use the payment channel, which allows two users to perform off-chain payments with almost unlimited frequency. By linking payment channels together to form a payment channel network, users connected by a path of channels can perform off-chain payments rapidly. However, payment channels risk encountering fund depletion, which threatens the availability of both the payment channel and network. The most recent method needs a cycle-based channel rebalancing procedure, which requires a fair leader and users with rebalancing demands forming directed cycles in the network. Therefore, its large-scale applications are restricted.

In this work, we introduce Shaduf, a novel non-cycle off-chain rebalancing protocol that offers a new solution for users to shift coins between channels directly without relying on the cycle setting. Shaduf can be applied to more general rebalancing scenarios. We provide the details of Shaduf and formally prove its security under the Universal Composability framework. Our prototype demonstrates its feasibility and the experimental evaluation shows that Shaduf enhances the Lighting Network performance in payment success ratio and volume. Experimental results also show that our protocol prominently reduces users’ deposits in channels while maintaining the same amount of payments. Moreover, as a privacy enhancement of Shaduf, we propose Shaduf++. Shaduf++ not only retains all the advantages of Shaduf, but also preserves privacy for the rebalancing operations.