Balance-aware Cost-efficient Routing in the Payment Channel Network

Abstract

Payment Channel Networks (PCNs) have been introduced as a viable solution to the scalability problem of the popular blockchain. In PCNs, a payment channel allows its end nodes to pay each other without publishing every transaction to the blockchain. A transaction can be routed in the network if there is a path of channels with sufficient funds, and the intermediate routing nodes can ask the transaction sender for a compensatory fee. However, a channel may eventually become depleted and cannot support further payments in a certain direction, as transaction flows from that direction is heavier than flows from the other direction. In this paper, we discuss a PCN node’s possible roles and objectives, and analyze the strategies nodes should take under different roles by considering nodes’ benefits and the network’s performance. Then, we examine two basic network structures (ring and chord) and determine the constraints under which they constitute a Nash equilibrium. Based on the theoretical results, we propose a balance-aware fee-incentivized routing algorithm to guarantee cost-efficient routing, fair fee charging, and the network’s long lasting good performance in general PCNs. Testbed-based evaluation is conducted to validate our theoretical results and to show the feasibility of our proposed approach.