The Spider routing scheme uses a quarter of the funds, and processes four time the transactions, as existing Layer 2 solutions.
Researchers from the Massachusetts Institute of Technology claim that ‘Spider’ allows users to stump up just a fraction of the funds that other solutions like Lightning and Raiden currently require, and to process four times more transactions off chain, before rebalancing on the blockchain.
The Spider routing scheme has been likened to packet switching in the telecommunications industry and utilises queue management to mitigate congestion issues.
Through their simulations, the researchers demonstrated that Spider was able to process 95% of transactions using just 25% of the funds used in existing ‘payment channel networks’.
“And [it] requires only one on-chain transaction for every 10,000 transactions routed to achieve full throughput on imbalanced demands,” the researchers said.
What’s the problem?
Decentralised blockchains like Bitcoin and Ethereum are very secure but they’re also very slow and can only manage a handful of transactions per second, which doesn’t allow them to compete with traditional payment processors like VISA which does 1700 TPS on average.
Payment Channel Networks (PCNs) allow users to send money to each other off chain – but are complicated and require users to lock up funds in escrow accounts and for payments to be routed via a bunch of different users.
“Traditional schemes send transactions along the shortest path possible, without being aware of any given user’s balance or the rate of sending on that account,” writes Rob Matheson from the MIT News Office.
“This can cause one of the users in the joint account to handle too many transactions and drop to a zero balance, making it unable to route further transactions.”
About a third of transactions on Lightning fail. Searching for a path through the network slows things down.
Inspired by packet switching, Spider splits each full transaction into smaller “packets” that are sent across different channels at different rates.
“This lets the scheme route chunks of these large payments through potentially low-funded accounts. Each packet is then far more likely to reach its destination without slowing down the network or being rejected in any given account for its size.”
It sounds similar to the ‘multi path payments’ Blockstream is introducing with “C-Lightning v 0.8”.
The Spider topology uses an algorithm to help manage queuing delays of congested accounts.
“By monitoring the queues alone, Spider is able to ensure that the rate of transactions is both balanced and as high as possible,” Matheson wrote.
Lead author of the research Vibhaalakshmi Sivaraman, a graduate student in the Computer Science and Artificial Intelligence Laboratory (CSAIL) said: “This should be efficient and a lucrative business.
“That means routing as many transactions as possible, with as little funds as possible, to give PCNs the best bang for their buck.”
The researchers plan to present more details about the technology at USENIX Symposium on Networked Systems Design and Implementation in late February.