A Payment Channel Network Fee Allocation Strategy Integrating Auction Theory

The payment channel network is an auspicious approach to improve the blockchain scalability, by allowing multi-hop off-chain payments between any two nodes. Therefore, a good incentive mechanism is very important to encourage nodes to actively assist multi-hop payments. However, the current fee allocation strategies do not allocate the fee reasonably and lacks the actual incentive attribute.In this paper, we introduce the auction theory, and propose the second-price dynamic auction fee allocation strategy. This strategy includes node pricing and fee allocation. Specially, the pricing of nodes is determined by six parts: base fee, proportional fee, skew fee, density fee, time fee and other fees. The nodes in the path obtain fees according to its own bid and the lowest bid and the second lowest bid in the auction. Additionally, we find that there is an incentive explosion problem in the fee allocation strategy determined by intermediate nodes, and proposes a virtual fee mechanism to alleviate this problem. The simulation results show that our second-price dynamic auction fee allocation strategy has more fair allocation performance than the Lightning Network fee allocation strategy, and has the ability to resist incentive explosion.