On Increasing Scalability and Liquidation of Lightning Networks for Blockchains

Abstract

The lightning network (LN) is a layer-two solution in Bitcoin for support scalability. LN uses offchain micropayment channels to scale the blockchain's capability to perform instant transactions without a global block confirmation process. However, micropayment scalability in a large LN is still limited by its relatively large searching space for a suitable route. Liquidation for small nodes still remains major challenges for the LN as the amount of transactions along a channel is predetermined by the channel capacity defined by two end nodes of the channel. In this paper, we introduce the notion of supernodes and the corresponding supernodes-based pooling to address these challenges. In order to meet the high adaptivity and low maintenance cost in the dynamic LN where users join and leave, supernodes are constructed locally to avoid global information or label propagation. Each supernode, together with a subset of (non-supernodes) neighbors, forms a supernode-based pool. These pools constitute a partition of the LN. Additionally, supernodes are self-connected. Micropayment scalability is supported through node set reduction as only supernodes are involved in searching and in payment with other supernodes. Liquidation is enhanced through pooling to redistribute funds within a pool to external channels of its supernode. Extensive simulations using LN simulator CLoTH have been conducted to validate the improvement in routing scalability and liquidation of the proposed architecture under different settings.