Definition
Liquidity ads are a way for Lightning nodes to advertise, directly over the network's gossip layer, that they are willing to contribute funds to a channel someone else opens to them, effectively selling inbound liquidity. They turn the gossip network itself into a decentralized marketplace for capacity, so a node that needs inbound liquidity can find sellers without relying on any centralized brokering service.
Built on dual-funded channels
Liquidity ads sit on top of dual-funded channels, where both peers commit capital to a single channel at open time, immediately creating liquidity in both directions. The interactive transaction construction and dual-funding machinery are specified in the Lightning BOLTs. A seller publishes the rate and terms at which it will match incoming channel-open requests with its own funds; a buyer reads those advertisements from gossip and opens a channel that the seller co-funds for an agreed fee.
Decentralized alternative to brokers
Centralized marketplaces such as auction houses and listing services also match buyers and sellers of inbound liquidity, but they depend on a trusted facilitator. Liquidity ads remove that middleman: every node can broadcast its offer and see all current offers natively. For sovereign operators this means sourcing inbound capacity peer-to-peer, in keeping with running infrastructure that answers to no central coordinator.
A liquidity ad results in a co-funded payment channel, and sellers can later adjust their committed capital without closing using our splice-in mechanism.
In Simple Terms
Liquidity ads are a way for Lightning nodes to advertise, directly over the network’s gossip layer, that they are willing to contribute funds to a…