Welcome to the third edition of the Lightning Lab, a newsletter filled with Lightning Network updates, community coverage, and, of course, memes!
In this issue, we're announcing our new bitcoin yield-generating product called Lightning Pool, ecosystem updates, and celebrating the fact that bitcoin comes to global consensus without forking or demanding recounts.
Lightning Pool Is Open for Business
Last week, we announced the release of Lightning Pool, a non-custodial marketplace for Lightning node operators to buy and sell channels. Lightning Pool makes it easier to accept Lightning payments, and opens up the new possibility of earning a yield on bitcoin by selling access to liquidity on Lightning.
The response has been nothing short of amazing, from the community-built LightningPool bot on Twitter tracking every trade:
And here’s just a sample of the host of people that really get it:
Lightning Labs⚡️ @lightningAnnouncing Lightning Pool, a non-custodial marketplace to buy and sell #bitcoin liquidity on Lightning. With Pool, users can trade channels, making it easy to get access to liquidity or earn a bitcoin-native yield. 💱 Learn more and start trading today: https://t.co/tOe7xs6Rac
This release marks an important development in the evolution of Lightning financial products, making Lightning liquidity a tradeable asset and enabling users to earn a return on their capital all while keeping custody of their funds.
We expect the entire Lightning ecosystem to benefit from Pool: custodial wallets get a new source of revenue, non-custodial wallets get an improved onboarding flow, merchants get better connectivity to the broader network, and routing nodes get a measuring stick for their ROI. But most importantly, the memes are on point.
Pool makes a market for inbound liquidity so that anybody who wants to receive coins on the Lightning Network (new users, merchants, exchanges, etc.) can purchase channels from a variety of capital providers.
Our hope is that pooling liquidity in this manner will allow for fair price discovery for inbound liquidity, which will provide more routing nodes with an additional source of revenue, which will bring more nodes onto the Lightning Network and improve the experience for everybody.
LCLs [Lightning Channel Leases] introduce the concept of non-custodial risk-free rate: is this really risk-free? How could we mitigate the existing hot wallet risk of running a Lightning node in the future?
US Treasury bills are considered “risk-free” because the only circumstance in which they are considered worthless is if the US federal government defaults on its debts.
Most importantly, US federal government default risk is global - if the worst case occurs, it affects every US Treasury bill holder. Hot wallet risk is local - if the worst case occurs, only the single Lightning node that has been exploited is affected. This makes LCLs as an instrument much more risk-free than Treasuries, in my opinion.
Pool was all over the media with coverage by Bitcoin Magazine, the Block, BTC Times, CoinDesk, and Decrypt. And for the more technically-inclined, read our deep dive blog post and whitepaper for more details on how Lightning Pool works.
In the meantime, we also released Lightning Terminal v0.3.0 which includes the Pool daemon and enables remote node support (Pool UI coming soon!), and Loop v0.11.0 which enables the first version of Autoloop, our automated channel rebalancing feature.
News & Updates
Lightning chat app Sphinx.Chat announced an exciting partnership with Adam Curry, known as the father of podcasting. Listeners now have the ability to pledge streaming payments to the podcaster at rates like 100 sats/minute, and to tip for their favorite sections. Adam’s goal is to ensure podcasting stays decentralized, and what better way to compensate podcasters than with bitcoin? Last month’s newsletter discussed the Streaming Economy, and it’s happening at lightning speed! ⚡️
Breez released a massive update to their non-custodial mobile wallet with a host of new features: on-the-fly channel creation, zero-conf channels, MPP send, and a revamped UI. Breez is pushing the limits of what Lightning can do and we are here for it!
Zebedee shipped their gaming-focused wallet on their one year anniversary. They optimized the experience “to make it easy and fun for players to move money through games” with gamertags, static QR codes, and game-specific optimization. The Lightning gaming ecosystem keeps growing, last weekend’s MintGox showcase had 4,400 livestream viewers who made 6,800 LN transactions in 2 hours!
In other news:
⚡️ Voltage announced their non-custodial hosted node solution is open for business! The next wave of Lightning adoption will onboard through solutions that make it easy to run your own node. Voltage is providing just that.
📈 OpenNode went wumbo and raised the limits for the merchants on their platform to allow receiving Lightning payments up to 5 BTC. This is a testament to the maturity of the network.
🤖 LN Markets opened up their Lightning-based derivatives exchange’s API so that users can integrate trading bots. This takes maximal advantage of Lightning’s instant settlement feature.
🍭 Lolli announced their §SatsTags feature, so that users of their Bitcoin rewards app can easily claim sats through social media channels. Hidden at the bottom of the announcement were two of our favorite words: “Lightning integration”.
👹 Raspiblitz released v1.6.1 of their home node solution, and it was a monster. Updates to Loop, Faraday, Thunderhub, and the rest of your favorite apps, plus new additions like Circuit Breaker and Mempool Explorer. Plus Pool is already available!
🌩️ MyNode gave their home node solution a major UI update in v0.2.17, making it easier than ever for self-sovereign users to onboard themselves onto Lightning.
☂️ Umbrel, yet another home node solution, opened up their closed beta to the public to great fanfare from Bitcoin Twitter. It has never been easier for users to run their own node, nor have they ever had this many choices!
🏧 Future.Travel has listed the first Lightning Bitcoin ATM to appear in Asia! As on-chain fees increase, expect to see more and more applications with fee-sensitive users switch to LN.
📝 Version One VC wrote a bullish article describing the major developments on Lightning. Max Webster highlights six main verticals: payments, gaming, high-frequency trading, p2p derivatives, messenger apps, and identity issuance.
Lightning Labs News and Media
We’re excited that Ryan Gentry has joined us as Business Development Lead! He previously worked at Intel as a Controls Engineer and as Lead Analyst for Multicoin Capital. Follow him on Twitter for lots of great #LiFi insights.
We’re Hiring! We have a new job posting up for a designer. Know somebody skilled in UX and visual design that wants to make Lightning accessible to the world? Send them our way!
In the media:
Laolu Osuntokun appeared on Lightnite Sessions to play Lightning games and chat about the lnd v0.11 release.
Alex Bosworth spoke at the MoneyDance Summit about Building on the Market Dominance of Bitcoin.
Desiree Dickerson discussed Lightning, gaming, and MintGox on the Bitcoin And… podcast.
Thanks for reading… share with your friends, and scan this QR code from your Lightning wallet to stack a few sats. 💰