A Mathematical Theory of Payment Channel Networks
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arXiv
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| Format: | Preprint |
| Publié: |
2026
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| _version_ | 1866915716142202880 |
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| author | Pickhardt, Rene |
| author_facet | Pickhardt, Rene |
| contents | We introduce a geometric theory of payment channel networks that centers the polytope $W_G$ of feasible wealth distributions; liquidity states $L_G$ project onto $W_G$ via strict circulations. A payment is feasible iff the post-transfer wealth stays in $W_G$. This yields a simple throughput law: if $ζ$ is on-chain settlement bandwidth and $ρ$ the expected fraction of infeasible payments, the sustainable off-chain bandwidth satisfies $S = ζ/ ρ$.
Feasibility admits a cut-interval view: for any node set S, the wealth of S must lie in an interval whose width equals the cut capacity $C(δ(S))$. Using this, we show how multi-party channels (coinpools / channel factories) expand $W_G$. Modeling a k-party channel as a k-uniform hyperedge widens every cut in expectation, so $W_G$ grows monotonically with k; for single nodes the expected accessible wealth scales linearly with $k/n$.
We also analyze depletion. Under linear, asymmetric fees, cost-minimizing flow within a wealth fiber pushes cycles to the boundary, generically depleting channels except for a residual spanning forest. Three mitigation levers follow: (i) symmetric fees per direction, (ii) convex/tiered fees (effective flow control but at odds with source routing without liquidity disclosure), and (iii) coordinated replenishment (choose an optimal circulation within a fiber).
Together, these results explain why two-party meshes struggle to scale and why multi-party primitives are more capital-efficient, yielding higher expected payment bandwidth. They also show how fee design and coordination keep operation inside the feasible region, improving reliability. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2601_04835 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | A Mathematical Theory of Payment Channel Networks Pickhardt, Rene Networking and Internet Architecture Cryptography and Security We introduce a geometric theory of payment channel networks that centers the polytope $W_G$ of feasible wealth distributions; liquidity states $L_G$ project onto $W_G$ via strict circulations. A payment is feasible iff the post-transfer wealth stays in $W_G$. This yields a simple throughput law: if $ζ$ is on-chain settlement bandwidth and $ρ$ the expected fraction of infeasible payments, the sustainable off-chain bandwidth satisfies $S = ζ/ ρ$. Feasibility admits a cut-interval view: for any node set S, the wealth of S must lie in an interval whose width equals the cut capacity $C(δ(S))$. Using this, we show how multi-party channels (coinpools / channel factories) expand $W_G$. Modeling a k-party channel as a k-uniform hyperedge widens every cut in expectation, so $W_G$ grows monotonically with k; for single nodes the expected accessible wealth scales linearly with $k/n$. We also analyze depletion. Under linear, asymmetric fees, cost-minimizing flow within a wealth fiber pushes cycles to the boundary, generically depleting channels except for a residual spanning forest. Three mitigation levers follow: (i) symmetric fees per direction, (ii) convex/tiered fees (effective flow control but at odds with source routing without liquidity disclosure), and (iii) coordinated replenishment (choose an optimal circulation within a fiber). Together, these results explain why two-party meshes struggle to scale and why multi-party primitives are more capital-efficient, yielding higher expected payment bandwidth. They also show how fee design and coordination keep operation inside the feasible region, improving reliability. |
| title | A Mathematical Theory of Payment Channel Networks |
| topic | Networking and Internet Architecture Cryptography and Security |
| url | https://arxiv.org/abs/2601.04835 |