Re: Economic crossover of Ark-funded vs. On-chain funded topologies
You make a compelling case for utilizing Ark to improve payment feasibility via compressed liquidity management.
I’m trying to model the economic crossover point for an LSP managing this topology.
In the Ark-funded model (the Factory), the LSP minimizes liquidity mismatch but incurs a perpetual “Liveness Tax”—the backing vTXOs must be refreshed/rolled over at every expiry (e.g., every 2-4 weeks). While efficient, this incurs recurring ASP fees and operational requirements.
In the On-chain funded model (Legacy channels), the LSP pays a high opportunity cost for locked capital (inefficient allocation) but incurs near-zero maintenance costs.
Does your model suggest that the entire network graph should remain Ark-funded to maximize payment feasibility? Or is there a threshold of predictable demand where a user achieves balanced flows (or high velocity) such that the operational overhead of the Factory outweighs the benefits of dynamic resizing, making a static channel the economically superior choice?
Effectively: Is the Factory a permanent home, or a staging ground for Liquidity Discovery?