Lightning routing fees depend more on base level than balance skew
Trim: Fee Level Matters More Than Skew in Lightning Routing
Networking and Internet ArchitectureCryptography and SecurityComputer Science and Game Theory
Summary
Lightning Network nodes charge fees to forward payments, but it's unclear which part of the fee drives their earnings the most. The authors show that the main driver is the base fee level set by how often channels are replenished and how much demand there is. Adjusting fees based on the current balance skew only has a small extra effect. Their method, Trim, sets nearly optimal fees using this insight and works well on simulated data from 2026.
What this means in practice
- •For lightning network node operators: Set routing fees primarily by a fixed base level tuned to demand and channel replenishment to maximize revenue efficiently.
- •For payment network designers: Design fee schemes focusing on stable base levels before fine-tuning skew adjustments to improve routing efficiency and node profitability.
Tested on simulated data.
Authors
Huiping Sun, Peilu Guo, Yiming Zhu, Yueqi Wu, Zhong Chen
Abstract
Lightning routing nodes lend their channel balance for a posted fee. Operators' tools move that fee with the balance around a hand-set level, and which part of the fee drives revenue is unclear. We present Trim, which models a channel as a two-sided inventory with costly refills. Its optimal fee is a level, set by demand and replenishment, plus a balance skew, the shadow price of liquidity. The level is first order: no fee rule beats the ceiling demand and replenishment set, and on exactly solved channels the best flat fee comes within $1.6\%$ of the optimum at the median, whereas a level off by a factor of two loses tens of percent. The skew is second-order insurance: it adds at most what the flow-balancing flat fee loses to refused forwards. So the level should be chosen: Trim's rule traces the revenue--success frontier, posts one level on every channel, and adds a skew only where refills stay frequent and costly. On a 2026 snapshot with synthetic payments, no tuned tool beats that frontier by over a few percent, and a skew changes gross revenue by a few percent.