2023.06 Vol.1

Bit of channel factories

Channel Factories

Channel Factories are another idea to try and limit the number of on-chain transactions necessary to use the lightning network. The jist is that N number of users create one N of N multisig address on-chain. Kinda like one big funding transaction. With this in place, a trustless protocol is used to create channels between the users which do not require any on-chain funding transactions themselves, they are all backed by the big original one.

This does sound pretty neat, but has the big caveat that all parties need to know each other ahead of time. I’ll dig into them later, but don’t think they will help the last-mile challenge.