From rusty at rustcorp.com.au  Fri Oct 11 02:33:41 2019
From: rusty at rustcorp.com.au (Rusty Russell)
Date: Fri, 11 Oct 2019 13:03:41 +1030
Subject: [Lightning-dev] Increasing fee defaults to 5000+500 for a healthier
	network?
Message-ID: <87wodcj9iy.fsf@rustcorp.com.au>

Hi all,

        I've been looking at the current lightning network fees, and it
shows that 2/3 are sitting on the default (1000 msat + 1 ppm).

This has two problems:
1. Low fees are now a negative signal: defaults actually indicate
   lower reliability, and routing gets tarpitted trying them all.
2. There's no meaningful market signal in fees, since you can't
   drop much below 1ppm.

Compare lightningpowerusers.com which charges (10000 msat + 5000 ppm),
and seems to have significant usage, so there clearly is market
tolerance for higher fees.

I am proposing that as of next release of c-lighting, we change defaults
on new channels to 5000 msat + 500ppm, and I'd like the other
implementations to join me.

Over time, that should move the noise floor up.  I picked 500ppm because
that's still 1% at 20 hops, so minimally centralizing.  I picked 5000
msat base for less quantifiable reasons.

Here's default fee a rate table in USD (@10k per BTC):

Amount   Before      After
0.1c     0.0100001c  0.05005c
1c       0.010001c   0.0505c
10c      0.01001c    0.055c
$1       0.0101c     0.1c
$10      0.011c      0.55c
$100     0.02c       5.05c
$1000    0.11c       50.05c

Thoughts?
Rusty.