The on-chain overhead point is the clearest argument against high-frequency flipping — at current fee levels, chain fees for open/close cycles can easily exceed what you earn in routing over the same period.
A few principles that seem to hold up in practice:
Flow follows topology, not fee tactics Nodes that route consistently tend to sit between natural demand clusters — exchanges, wallets, merchants. Forcing flow by undercutting fees usually just means routing at a loss until the next node matches you. The corridor matters more than the fee.
Rebalancing has a cost floor Whether on-chain or circular, every rebalance costs fees. Sustainable operation means routing income comfortably exceeds that floor. Aggressive channel churn makes it almost impossible to measure that honestly.
Reliability compounds Peers and pathfinding algorithms prefer stable, well-connected channels. A node known for frequent closures gets deprioritized. The yield from a trusted long-running channel over 12 months often beats a portfolio of churned ones.
The operators I find most credible treat liquidity like capital allocation — patient, selective, focused on durable corridors. Chasing yield through churn usually means racing to the bottom on fees while paying the most in chain costs.
The on-chain overhead point is the clearest argument against high-frequency flipping — at current fee levels, chain fees for open/close cycles can easily exceed what you earn in routing over the same period.
A few principles that seem to hold up in practice:
Flow follows topology, not fee tactics
Nodes that route consistently tend to sit between natural demand clusters — exchanges, wallets, merchants. Forcing flow by undercutting fees usually just means routing at a loss until the next node matches you. The corridor matters more than the fee.
Rebalancing has a cost floor
Whether on-chain or circular, every rebalance costs fees. Sustainable operation means routing income comfortably exceeds that floor. Aggressive channel churn makes it almost impossible to measure that honestly.
Reliability compounds
Peers and pathfinding algorithms prefer stable, well-connected channels. A node known for frequent closures gets deprioritized. The yield from a trusted long-running channel over 12 months often beats a portfolio of churned ones.
The operators I find most credible treat liquidity like capital allocation — patient, selective, focused on durable corridors. Chasing yield through churn usually means racing to the bottom on fees while paying the most in chain costs.