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Turning on a Lightning node to help route payments isn’t quite as simple as depositing funds and keeping your node plugged in. Routing is a lot more like market trading than it is running a networking switch. If you want to route with purpose, you have to take smart market risks.
At a basic level the way a payment works is by orchestrating a series of swaps between connected peers on the network. As a router you are a capital service provider. As a payer you are looking for a set of connected providers who will provide the best service at the lowest cost.
The first step to becoming a routing node is getting started. Get your node setup. Find the setup method that suits you best to get into it. Node launcher, node in a box, build from source, follow a blog, whatever works for you. Your node doesn’t have to be perfect at the start.
Assign significant, but not excessive (unbalanced) capital to the node to signal to the network your serious routing intent. Say 0.5 to 1 BTC spread amongst 10 to 15 peers. More than 0.05 per channel w/o activity is pointless since the largest possible payment cannot exceed that.
Seek to place your node in an environment where you can keep it up-to-date and also minimize all possible downtime. You want the node to stay available all the time forever. That involves good networking, stable hardware. Nothing too fancy, a couple cores, some gb of memory, etc.
What type of routing? Interior routers don’t need leaf channels like mobile wallets or private stores. Tor is ok, or no advertised network address. Interior routing struggles more for inbound liquidity. Exterior nodes do need advertised IPs. Dynamic IP is fine even with no domain
It’s probably most important to build your inbound liquidity by spending down your channels, buying inbound liquidity directly, or advertising yourself as a good target for outbound channels. You never ever want to get too far away from equal parts local balance to remote balance
Never let any of your outbound channels get depleted for too long due to forwarding activity. React quickly to forwards depleting the outbound channel liquidity by monitoring and adding more capital where needed. Reduce the liquidity in channels where it is not being used as well
Set min channel sizes to reduce the UTXO costs. Reduce your CLTV values, forwarding fees to the lowest amount that makes sense for your active operational costs. Unless you are looking to maximize short term profit you should recognize routing is destined to be a commodity market
Seek out new channel destinations actively. Whenever a new service launches, you hear about someone setting up a new store, see a node adding new capacity intelligently, there’s a chance they’ll be inbound constrained. These are your best opportunities to fill underserved niches.
Get familiar with either APIs and supporting libraries if you’re a dev or with tools being developed to help automate your node management. What you want is to focus on capital allocation decision making so you need to see high signal information and easily execute needed changes
Remember that potentially the highest return you earn from operating a routing node in a rapidly growing network is not the immediate route fees. It is the knowledge and data you can apply to be efficient in a future much bigger routing market. The best data will be self-observed
