@ -326,6 +326,41 @@ On the other side we have a couple of downsides:
==== Rebalancing
In this chapter you have already learnt that the path finding problem on the lightning network is actually rather a problem of finding a flow - which consists of several paths.
Very early research about pathfinding in payment channel networks suggests \footnote{FIND LINK} that rebalancing channels does not change the flow properties between nodes.
With rebalancing we mean shifting liquidity from one channel to another channel for example via a circular payment.
There is also the notion of offchain / onchain swaps with swapping services.
This form of rebalancing certainly changes also the topological properties like the flow of the network.
As rebalancing via circular self payments would not change the overall amount that an arbitrary node can send to any other node people thought that rebalancing is not very useful.
However in practice a node hardly wants to find the perfect flow or multipath to be able to send the absolute maximum amount to another node.
Nodes are rather interested in quickly finding a sufficient large flow so that they can make a reasonable payment.
Research conducted by Rene Pickhardt (one of the authors of this book) indicated that circular rebalancing operations improve the overall successrate in the network for arbitrary payments.
It turns out that there is various ways how rebalancing can be used and in some form it even resembles the functionality of a multi path payment.
Thus we decided to devote a section here on basics about rebalancing and how it can be used to improve the pathfinding abilities of the network.
We made the experience that most people call their payment channel balanced if they own the same amount of bitcoin in that channel as their channel partner.
While this seems intuitive we want to show that this intuition does not seem to be the best intuition for our goals.
In order to see this let us assume the Lightning Network at some point in time looks exactly like that.
All channels split the capacity 50 - 50 dividing it into half between the channel partners.
It is quite clear that after already one single payment such a 50 - 50 state would be destroyed.
You can see this in the following graph
IMPORT picture
rebalancing will leave others with uneven state.
IMPORT PICTURE
even the most rebalanced state that cannot reach 50/50 everywhere for obious reasons
IMPORT PICTURE
a better goal is low imbalance measured via gini on relative funds. Explain why releative and how this is actually done
Show it still can lead into conflicting situations.
* (proactive / reactive) Rebalancing
* Imbalance measures
* goals for rebalancing (low Gini coefficient and not 50 / 50)
Rene Pickhardt
4 years ago