Aligning incentives and resilience: joint node selection and resource allocation in the lightning network

Abstract The lightning network (LN) addresses Bitcoin’s scalability as a second-layer solution. While payment channel networks (PCNs) incentivize participation through profit opportunities, revenue-driven behaviour risks centralization, creating hub nodes that undermine decentralization and privacy. Current research inadequately models resource allocation and lacks realistic simulations of LN’s routing dynamics, limiting practical insights. This paper introduces a deep reinforcement learning (DRL) framework, enhanced by transformer-based architectures, to solve the Joint Combinatorial Node Selection and Resource Allocation (JCNSRA) problem. We refine an existing simulation environment by integrating enhanced routing modules, better aligning it with real-world LN behaviour and JCNSRA requirements. Our model outperforms baseline methods and heuristics across diverse network settings. To evaluate decentralization, we deploy revenue-driven agents in localized simulations and analyze network evolution using betweenness and closeness centrality, entropy, inequality measures, and modularity analysis. Results demonstrate that individual revenue-maximization incentives can align with LN’s decentralization goals. Our rational RL agents promote a more equitable and decentralized network structure. Overall, this work highlights the feasibility of incentive-compatible solutions to balance profitability and decentralization in PCNs, offering actionable insights for sustainable network growth.

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Publication Details

Journal
Journal of the Royal Statistical Society Series A (Statistics in Society)
Published
2026-02-03
DOI
https://doi.org/10.1093/jrsssa/qnag007
Primary Topic
Blockchain Technology Applications and Security
Type
article
Field-Weighted Citation Impact
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article

Aligning incentives and resilience: joint node selection and resource allocation in the lightning network

Mojtaba Tefagh, Amirahmad Shafiee, Mahdi Salahshour
Journal of the Royal Statistical Society Series A (Statistics in Society)
Blockchain Technology Applications and Security
article

Aligning incentives and resilience: joint node selection and resource allocation in the lightning network

Mojtaba Tefagh, Amirahmad Shafiee, Mahdi Salahshour
article en

Abstract

Abstract The lightning network (LN) addresses Bitcoin’s scalability as a second-layer solution. While payment channel networks (PCNs) incentivize participation through profit opportunities, revenue-driven behaviour risks centralization, creating hub nodes that undermine decentralization and privacy. Current research inadequately models resource allocation and lacks realistic simulations of LN’s routing dynamics, limiting practical insights. This paper introduces a deep reinforcement learning (DRL) framework, enhanced by transformer-based architectures, to solve the Joint Combinatorial Node Selection and Resource Allocation (JCNSRA) problem. We refine an existing simulation environment by integrating enhanced routing modules, better aligning it with real-world LN behaviour and JCNSRA requirements. Our model outperforms baseline methods and heuristics across diverse network settings. To evaluate decentralization, we deploy revenue-driven agents in localized simulations and analyze network evolution using betweenness and closeness centrality, entropy, inequality measures, and modularity analysis. Results demonstrate that individual revenue-maximization incentives can align with LN’s decentralization goals. Our rational RL agents promote a more equitable and decentralized network structure. Overall, this work highlights the feasibility of incentive-compatible solutions to balance profitability and decentralization in PCNs, offering actionable insights for sustainable network growth.

Journal of the Royal Statistical Society Series A (Statistics in Society)
Sharif University of Technology (IR)
Openalex Percentile: Top 76%
Blockchain Technology Applications and Security
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Aligning incentives and resilience: joint node selection and resource allocation in the lightning network — Mojtaba Tefagh, Amirahmad Shafiee, et al. · Journal of the Royal Statistical Society Series A (Statistics in Society) (2026) | TGRS Research Map | TGRS