Flow 2.0 is the Voltage Just In Time liquidity service. This is LSP is able to automatically provision channels when it detects payments. Continue reading to learn more.
Flow 2.0 is a noncustodial Liquidity Service Provider that is made to automate liquidity needs by providing Just In Time channel creation. This means that our LSP will be able to detect a payment going to your Lightning node and make liquidity decisions to ensure the payment makes it to you. This solves a lot of headaches for node runners, merchants, and developers that are tasked constantly with managing their liquidity.
Watch this video to learn more about how it works
This LSP is created by leveraging zero-conf channels and preimage hashes. With these capabilities of Lightning, we can determine on the fly if a new channel is required, open it instantly if necessary, and send the payment to the receiver without ever taking custody of funds. Here's how it works:
- The Receiver generates an invoice on their node.
- The Receiver sends their invoice to the Voltage LSP.
- The Voltage LSP returns a new invoice with the same preimage hash but the LSP Pubkey.
- Receiver gives this new 'Wrapped Invoice' to the Sender.
- The Sender pays the invoice which goes to the LSP.
- The LSP detects the payment and opens a zero-conf channel to the Receiver.
- The LSP forwards the payment to the receiver and the payment is completed.
This process has several benefits to highlight. First, the Wrapped Invoice uses the same preimage hash as the original invoice. This means that the LSP can't settle the payment without the final Receiver completing the payment. Secondly, the invoice that's given to the Sender container the Voltage LSP's public key meaning an increase in privacy for the Receiver. The Voltage LSP knows the Receiver but no one else does. Finally, this works even if the Receiver has 0 channels. There is no requirement to have any kind of liquidity established, you can start from a brand new node. Of course, it's important to mention that zero-conf channels are a trusted mechanism until the channel has confirmations on the blockchain.