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Combined summary - A Lightning Network of multi-party mechanisms
The discussion on the incorporation of multiparty channel constructs within payment channel networks highlights both potential benefits and challenges.
The primary advantage of these constructs is their ability to enhance payment reliability and offer service level guarantees. However, there's a noted gap in the analysis regarding the downsides, specifically concerning on-chain bandwidth and the costs of unilateral exits. This lack of quantification introduces uncertainty about the trade-offs involved in adopting such constructs. Additionally, concerns have been raised about the compatibility of current pathfinding algorithms with multiparty channel constructs, given that most existing algorithms assume channels connect exactly two nodes. There's an underlying suggestion that creating virtual two-party channels within these multiparty constructs could potentially dilute the routing efficiency benefits they promise, indicating a need for further development and refinement.
Pathfinding algorithms, crucial for network design and optimization, typically do not account for the maximum size of edges, relying instead on preprocessing steps to exclude unsuitable channels. This approach maintains efficiency but may not be viable for more complex, multi-variable systems like those proposed. Flow-based pathfinding algorithms offer a solution by considering multiple variables and adapting to dynamic network capacities. These innovations necessitate a reevaluation of how network mechanisms are modeled, moving towards a more nuanced analysis capable of accommodating modern network demands.
The proposal to separate the link layer from the network layer in the Lightning Network aims to facilitate direct connections between multi-party mechanisms. This represents a significant shift from the current model, which primarily relies on two-party channels. Implementing this change would require modifications to gossip protocols and onion routing to support the complexity of multiparty mechanisms. For example, channel_announcement
messages might need to allow for a variable number of nodes, employing technology like MuSig2 for signature aggregation to keep communications efficient despite the increased node count. However, technical limitations, such as BOLT8's payload cap, restrict the number of nodes in a public multi-party mechanism. Additionally, the proposal suggests treating N-party mechanisms as linked to a common "virtual" node for pathfinding purposes, addressing how to identify the next hop in a route when dealing with multiparty mechanisms. These changes underscore the need for innovative solutions to integrate multiparty channels without compromising network performance.