Integration of The Bitcoin Lightning network for deposit and withdrawal's
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Ritchie Williamson
Shapeshift integration of the Bitcoin Lightning network for faster and more efficient deposit and withdrawal processes. This move aims to leverage the Lightning network's scalability and reduced transaction fees, enhancing the overall user experience and making transactions on the platform quicker and more cost-effective.
0xFBL
As a Bitcoin enjoyoooor too I have been poking around the discovery of running our own LN node. Just wanted to let you know this is seen. 🫡
Fireb0mb1
EDIT: This answer bellow assumes you're talking about withdrawals/deposits to your own ShapeShift wallet. If you were talking about deposits/withdrawals from another wallet while using our on/off ramps partners you should specify it in your request. I know Mt Pelerin allow them, but you should be able to do it on your own, while using their platform.
Love the suggestion (as a resident Bitcoin supporter in the DAO) but to me at least it seems unlikely to happen in the current state of the LN technology in a web wallet like ShapeShift.
There are a lot of technical requirements for LN wallets if we intend to provide a non-custodial experience like the rest of the services/blockchains we support. Each wallet would need to become a LN node and communicate with a Bitcoin node. That last part could be ShapeShift's Bitcoin node, but not the LN node part.
To receive payments on LN, for the moment, you still need your node to be online and most mobile platforms do not allow such service to run in the background on phones to preserve battery, mobile data, and for safety (so you need to have the app open to run the node). On computers most people won't keep their browser open either.
The matter of backups for LN wallets is also more complex than just keeping your seed words. You need to either restore or force close LN channels your node manages in order to get the funds in them back. There are now mechanisms to safely/automatically (but not always quickly) getting back all your funds from a backup, but this adds a lot of complexity to wallet management and usually require infrastructure to store these backups (encrypted of course).
Lastly, most of the "web" LN wallets (and other "light" LN wallets) that exist are actually using one or more LSPs (Lightning Service Providers) that helps them manage the inbound/outbound liquidity of their channels. Although these can be interacted with in a non-custodial way most of the time, we'd either need to add a dependency to such LSPs or have to become one and provide that kind of service to our users. It can be a profitable avenue for the DAO, some large LSP are making money with fees they charge to their users, but that would be an ever larger change requiring capital to allocate and human resources to manage (LN routing node maintenance is a pretty involved task). Becoming a LSP would also most likely be the only way for the DAO to generate revenues for that integration of LN.
I'm not part of the Product team, but I thought I'd share some of my knowledge around this as I think most people in the DAO are more focused on Ethereum/EVMs and Cosmos these days.
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Ritchie Williamson
Fireb0mb1: Thank you for your input. I was considering transactions involving deposits and withdrawals from another wallet. Previously, I utilized Shapeshift to convert Litecoin to Bitcoin and subsequently withdrew the Bitcoin to my personal wallet. While this process seems straightforward, the key consideration lies in whether Shapeshift would opt to establish its own node as a Lightning Service Provider (LSP) or collaborate with a third-party Lightning Network provider for a quicker and simpler solution.