Lightning Finance: Yield Farming on Bitcoin Network Opens With a Marketplace for Payment Channel Liquidity Providers
Lightning Finance (LiFi), the new yield farming on Bitcoin Network opens with a marketplace for Liquidity Providers.
Lightning lab yesterday announced the release of Lightning Pool, a non-custodial, peer-to-peer marketplace for Lightning node operators to buy and sell channels.
Lightning Pool makes it easier to instantly accept Lightning payments, and opens up the new possibility of earning a yield on bitcoin by selling access to liquidity on Lightning.
Olaoluwa Osuntokun, San Francisco based Nigerian and Co-Founder at Lightning Lab took to the agencies’ blog to announce its alpha release of lightning pool “a new non-custodial marketplace that connects people who want to buy inbound liquidity with those looking to earn a return on their bitcoin in Lightning channels, promoting more efficient capital allocation on the Lightning Network”.
Lightning Pool is a non-custodial marketplace consisting of auctions that allow participants to buy and sell Lightning Channel Leases (LCL).
This new release of lighting pool marketplace will connect people who want to buy inbound liquidity with those looking to earn a return on their bitcoin in Lightning channels, promoting more efficient capital allocation on the Lightning Network.
Lightning Labs is marketing the service as a flagship for Lightning Finance or “LiFi,”.
Quick Facts: Lightning Finance is a new way for Bitcoiners to generate non-custodial yield on their bitcoin holdings on Bitcoin Network, instead of lending them through a custodian like BlockFi or turning them into wrapped bitcoin (WBTC) for DeFi yield farming on Ethereum Blockchain.
This new development will revolutionize Lightning financial products, making Lightning liquidity an incredibly tradeable asset. Clients will be able to still earn a return on their capital while keeping custody of their funds.
With Pool, Lightning businesses and node operators can manage their channels and focus on building and serving their customers instead of worrying about liquidity. When node operators can more efficiently deploy their capital, it improves the network liquidity, making it more buoyant and reliable for everyone.
Popular Lightning service providers like Strike, bitfinex recorded an increase in demand for their lightning service. This new development has prompted them to quickly open channels in order to accommodate the overflow.
Using Lightning Pool, node operators can now be paid for opening up new channels and providing inbound liquidity. This also opens the door to new sources of revenue for leasing out liquidity by bitcoiners (LiFi) and providing capital on Lightning.
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