Joint Combinatorial Node Selection and Resource Allocations in the Lightning Network using Attention-based Reinforcement Learning
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arXiv
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| Format: | Preprint |
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2024
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| author | Salahshour, Mahdi Shafiee, Amirahmad Tefagh, Mojtaba |
| author_facet | Salahshour, Mahdi Shafiee, Amirahmad Tefagh, Mojtaba |
| contents | 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. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2411_17353 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Joint Combinatorial Node Selection and Resource Allocations in the Lightning Network using Attention-based Reinforcement Learning Salahshour, Mahdi Shafiee, Amirahmad Tefagh, Mojtaba Machine Learning Computational Finance I.2.6; I.2.8 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. |
| title | Joint Combinatorial Node Selection and Resource Allocations in the Lightning Network using Attention-based Reinforcement Learning |
| topic | Machine Learning Computational Finance I.2.6; I.2.8 |
| url | https://arxiv.org/abs/2411.17353 |