Echoing this thought – with the new bidirectional algorithm we would start failing endorsed payments if any node on the payment path has insufficient outgoing reputation. So what benefit do we get from tracking incoming reputation? Could we drop it altogether without losing anything?
But if the sprayed payments fail quickly, does it really matter? This is what unconditional fees are for.
If you’re a node on an endorsed payment path, you only care about the remainder of the payment path resolving quickly. Previous nodes on the path are irrelevant to this goal, so why track incoming reputation at all? Local outgoing reputation seems sufficient – each node on the path makes the best decision they can about forwarding the endorsed HTLC or failing it back immediately.
Implications of Outgoing-Only Reputation
- Endorsing an HTLC no longer stakes your reputation on it resolving quickly, but rather communicates that you would like to try using endorsed slots along the entire payment path.
- If any node along the payment path has insufficient reputation as decided by the node before it, the entire payment gets failed. To save on unconditional fees, a node would prefer to send unendorsed payments during peacetime.
- New nodes can immediately pay using endorsed slots if the destination and all intermediate hops have good reputation. (Much better UX during wartime).
- New nodes cannot receive using endorsed slots until they have built enough reputation.