One of the greatest strides being made on bitcoin’s second layer is the development of a market for liquidity. Bitcoin is a scarce commodity and can be “pointed” in channels to other peers on the lightning network. The open bitcoin lightning network is now beginning to price the demand for scarce liquidity in lightning channels. The toolset is expanding rapidly and @LightningLiquidityBot is a great place to start.
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Lightning channels allow near-instant settlement of bitcoin transactions, which is a valuable service, especially to retailers and exchanges. Similar to how retailers will pay credit card fees to provide convenience to their customers, retailers will buy lightning channels that provide rapid settlement for their bitcoin patrons. The pricing is very different though: Credit Card companies will often charge 2-4% fees, while Lightning Liquidity is market-driven and currently less than 0.2% fees.
Offer Markovich, an enterprising developer from Israel, assembled the Lightning Liquidity Bot (@LightningLiquidityBot) as a way to create an open market for liquidity. The bot is based in Telegram and is an attractive alternative to Lightning Lab’s Pool service.
How to use @LightningLiquidityBot:
This bot lists paid requests for liquidity on the lightning network. Using @LightningLiquidityBot bot is a lightweight and friendly way to get exposure to lightning liquidity buys/sales.
The bot supports node filtering based on a node’s betweenness centrality measure. It ranks each node as A,B,C,D, or E, where A is best. Use @ln_name_server_bot to check a node’s ratings.
How to sell liquidity using the bot:
- Make sure that you have keysend enabled. In your LND.conf file, make sure that it contains the line accept-keysend=true so you can receive your payments.
- Start a DM conversation with @LightningLiquidityBot and use the command /signals to list the current requests for liquidity.
- Zoom to a specific request using the command /signal .
- If you find an attractive offer listed, add the node as a peer. Make sure you are able to add them as a peer before you proceed!
- Use the command /accept to accept the offer.
- Open a channel to the peer and keep the channel open to receive payments via keysend over the order duration. If the channel is closed prematurely, the order will be relisted automatically with the bot. Payments will occur weekly once the earnings are >1000 sats.
How to buy liquidity using the bot:
- Start a DM conversation with @LightningLiquidityBot.
- Use the following command to request inbound liquidity:
/invite <pubkey> <total amount requested> <days> <min chan size> <max chan size> <node centrality rating A-D> <payment offered for channel>
Example: (10M capacity for 30 days, 1M minimum, 3.5 maximum, minimum C rating, and 10K total reward)
/invite 0349382bd894403988032f446cd2ad58a311685260885f50b483807ff356caf108 10000000 30 1000000 3500000 C 10000
- Pay the generated invoice to list your order with the bot.
This bot was created by @offerm so please reach out for help or troubleshooting.
Costs
For those selling liquidity, costs are limited to channel open costs, which can be minimized by using smart mempool techniques ( Satbase.org/the-mempool-and-lightning ) or by using batched channel opens ( Satbase.org/bos-open ).
For those buying liquidity, there is a flat 5000 sat listing fee in addition to the payment made to the liquidity provider.
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