On Search Friction of Route Discovery in Offchain Networks

TL;DR

This paper analyzes the costs and tradeoffs involved in discovering efficient, private routes in large-scale offchain networks like Lightning, highlighting the search friction and evaluating different scenarios empirically.

Contribution

It provides a detailed analysis of search friction in route discovery for offchain networks, including empirical evaluation and discussion of alternative charging schemes.

Findings

Tradeoffs between cost efficiency and success rate in route discovery

Empirical evaluation of trampoline nodes in Lightning network

Discussion of privacy-preserving route discovery mechanisms

Abstract

Offchain networks provide a promising solution to overcome the scalability challenges of cryptocurrencies. However, design tradeoffs of offchain networks are still not well-understood today. In particular, offchain networks typically rely on fees-based incentives and hence require mechanisms for the efficient discovery of ``good routes'': routes with low fees (cost efficiency) and a high success rate of the transaction routing (effectiveness). Furthermore, the route discovery should be confidential (privacy), and e.g., not reveal information about who transacts with whom or about the transaction value. This paper provides an analysis of the ``search friction'' of route discovery, i.e., the costs and tradeoffs of route discovery in large-scale offchain networks in which nodes behave strategically. As a case study, we consider the Lighning network and the route discovery service provided by the trampoline nodes, evaluating the tradeoff in different scenarios also empirically. Finally, we initiate the discussion of alternative charging schemes for offchain networks.