https://x.com/bitcoinerrorlog/status/1765274730469142546
My friends the secret to running an LSP is you don’t carry cost of capital for people who are filling up channels.
Channel “depleters” or in other words, people who stack on lightning are paying for those UTXOs then paying to take them from you. That liquidity goes back to a larger channel that has bidirectional flow.
LSPs are liquidity managers, having the mental model of this is important. An LSP only needs to keep capital in channels that are active and paying fees for activity, otherwise splice out. Inactive users can be the sole hodlers of their lightning liquidity.
This does not mean LSPs do not require a good chunk of capital. This means as an LSP you have to know and think deeply about lightning liquidity
nick / Nick Slaney
npub18ps…v73m
2024-03-06 12:29:59
Author Public Key
npub18psflzah8gjq54t4zyjhezghzg9pvpjhm894f4yex9wpl79t3uxq03v73mPublished at
2024-03-06 12:29:59Event JSON
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"content": "https://x.com/bitcoinerrorlog/status/1765274730469142546\n\nMy friends the secret to running an LSP is you don’t carry cost of capital for people who are filling up channels.\n\nChannel “depleters” or in other words, people who stack on lightning are paying for those UTXOs then paying to take them from you. That liquidity goes back to a larger channel that has bidirectional flow.\n\nLSPs are liquidity managers, having the mental model of this is important. An LSP only needs to keep capital in channels that are active and paying fees for activity, otherwise splice out. Inactive users can be the sole hodlers of their lightning liquidity.\n\nThis does not mean LSPs do not require a good chunk of capital. This means as an LSP you have to know and think deeply about lightning liquidity",
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