Specific Baseline Reward

In addition, standard Lightning Nodes and Liquidity Makers receive a specific type of reward for channel capacity, the Baseline Reward. It is given as a minimum reward for standard Lightning Nodes that log payment channels with Lightning Oracles and is also granted to Liquidity Makers in the capacity market.

This specific type of reward serves as a basic compensation in addition to the Channel Rewards to make up for blockchain transaction costs. The Baseline Reward is a fixed amount (e.g. 250 PL2) and based on estimated average exchange rates. It offsets the cost of both Ethereum transaction fee (gas) and the Bitcoin on-chain transaction fee.

The fixed amount in PL2 is designed to be equal or higher than the estimated total cost of gas and bitcoin fees and is supposed to include a +20% bonus. The bonus covers currency risk to which the transaction-related costs of the Lightning Nodes are exposed.

Average exchange rates are used for the conversion to PL2. The costs for both blockchains are estimates that are regularly calculated off-chain by community members and can be adjusted by the community at any time. If exchange rates fluctuate, causing cost compensation to fall out of balance, the Baseline Reward is changed through calling for a governance vote.