Flow and Pool: An Introduction
Get familiar with both Flow and Pool and how they work
Pool is an application and service built by Lightning Labs that enables a blind auction marketplace that matches nodes that are looking for inbound liquidity with nodes that are willing to provide inbound liquidity for a fee. Pool was launched in November 2020 and has seen a lot of activity and growth since then. A recent version of Pool added a feature called sidecar channels. A sidecar channel allows someone to generate a ticket order that anyone can redeem on Pool to acquire inbound and outbound liquidity from a liquidity provider.
At Voltage, we have developed Flow, our premier sidecar channel ticket generation and management tool. With Flow you can easily order a sidecar ticket and redeem it for your node to acquire inbound and outbound liquidity from the highest tier nodes on the network.
In the Lightning Network, inbound liquidity is required to receive payments, as well as route payments for others and generate fee income. Since Lightning has been around, the challenge of generating inbound liquidity for new nodes has been notorious in its difficulty. While tools like Loop and 3rd party services like Breez and LNBig exist, there has been no open market for liquidity matching until Pool. At Voltage we want to expand access to Pool so that node runners like yourself can obtain inbound liquidity with as little friction as possible.
- You do not need to create or configure Pool accounts
- Get inbound liquidity directly from top tier routing nodes
- Increased privacy for you. Use our UTXOs, not yours.
- API and Dashboard for ease of use
- Purchase channels funded on both sides
- With a Sidecar ticket, you can give out channels to your users for rewards or onboarding
- Corporate accounts available to easily order in bulk
Without Flow: The Pool Daemon must be installed and you must create a Pool account to secure funds with the Auction server. To open an account you must already have at least one channel with outbound capacity and fund the account via an on-chain transaction with a minimum of 100,000 sats.
After your account is open you can use your account funds to purchase channels based on fee rates that the liquidity provider is looking for. Your account will have an expiration block height determined by you at creation. After expiry the account will automatically close and must be reopened. Without Flow you must manage the pool account, lock up funds, and maintain a balance to purchase inbound liquidity channels.
With Flow: To take advantage of the benefits of using Pool by utilizing Flow, first install the Pool daemon on your node. You can then use our API or Dashboard UI to create an order for a new channel. You will be prompted to pay for the channel with Bitcoin either onchain or via Lightning.
As soon as your payment is received the order will generate what is called a Sidecar Channel Ticket. This ticket can be copied and used to access the Pool liquidity auction to receive a channel from a top tier node looking to provide liquidity to users like you. As soon as the order gets matched you will have a brand new channel.
Individual User: Whether you need capacity for your new node or just some extra channels with good peers, you can use Flow to easily get inbound or outbound capacity for a very low cost.
Company: As a Lightning company, you may be looking to onboard new users. Flow can help streamline this experience for your customers by providing them with liquidity without having to lock up your own funds. Additionally, sidecar tickets can be redeemed by anyone. This means you can easily give out channels to your users as rewards or benefits.