Joint Combinatorial Node Selection and Resource Allocations in the Lightning Network using Attention-based Reinforcement Learning

The Lightning Network (LN) has emerged as a second-layer solution to Bitcoin's scalability challenges. The rise of Payment Channel Networks (PCNs) and their specific mechanisms incentivize individuals to join the network for profit-making opportunities. According to the latest statistics, the total value locked within the Lightning Network is approximately \$500 million. Meanwhile, joining the LN with the profit-making incentives presents several obstacles, as it involves solving a complex combinatorial problem that encompasses both discrete and continuous control variables related to node selection and resource allocation, respectively. Current research inadequately captures the critical role of resource allocation and lacks realistic simulations of the LN routing mechanism. In this paper, we propose a Deep Reinforcement Learning (DRL) framework, enhanced by the power of transformers, to address the Joint Combinatorial Node Selection and Resource Allocation (JCNSRA) problem. We have improved upon an existing environment by introducing modules that enhance its routing mechanism, thereby narrowing the gap with the actual LN routing system and ensuring compatibility with the JCNSRA problem. We compare our model against several baselines and heuristics, demonstrating its superior performance across various settings. Additionally, we address concerns regarding centralization in the LN by deploying our agent within the network and monitoring the centrality measures of the evolved graph. Our findings suggest not only an absence of conflict between LN's decentralization goals and individuals' revenue-maximization incentives but also a positive association between the two.

DyFEn: Agent-Based Fee Setting in Payment Channel Networks

In recent years, with the development of easy to use learning environments, implementing and reproducible benchmarking of reinforcement learning algorithms has been largely accelerated by utilizing these frameworks. In this article, we introduce the Dynamic Fee learning Environment (DyFEn), an open-source real-world financial network model. It can provide a testbed for evaluating different reinforcement learning techniques. To illustrate the promise of DyFEn, we present a challenging problem which is a simultaneous multi-channel dynamic fee setting for off-chain payment channels. This problem is well-known in the Bitcoin Lightning Network and has no effective solutions. Specifically, we report the empirical results of several commonly used deep reinforcement learning methods on this dynamic fee setting task as a baseline for further experiments. To the best of our knowledge, this work proposes the first virtual learning environment based on a simulation of blockchain and distributed ledger technologies, unlike many others which are based on physics simulations or game platforms.