Demand Matrix Optimization for Offchain Payments in Blockchain

Abstract

Offchain networks are dominant as a solution to the scalability problem of blockchain systems, allowing users to perform transactions without their recording on the chain. Offchain networks consist of channels connecting pairs of users with frequent transactions. Transactions between users without a direct channel are also supported through paths of multiple channels but involve payment of fees to intermediate users. A set of pending transactions (the demand) is typically served one by one. This paper proposes a novel approach to reduce the number of offchain transactions and their corresponding fees while preserving the requested impact on user accounts, by performing optimizations directly on the demand matrix. We contribute an analytical characterization of the properties of such offchain payments demand matrix optimizations, present efficient algorithms and report on an empirical evaluation, demonstrating the simplicity and effectiveness of the approach.