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Currently and as defined by BOLT 07 on the Lightning Network, the fees for forwarding an HTLC of amount amount_to_forward are computed as:

fee_base_msat +  amount_to_forward * fee_proportional_millionths / 1000000

I am wondering why the fee_base_msat was actually included and which concrete problem it solved that could not be solved if the fee_base_msat were dropped?

Murch
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Rene Pickhardt
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  • What about the other way around? Which concrete problem did adding a proportional fee solve that could not be solved if it were dropped? For me it seems its all about profitability not about using the network. –  Jul 14 '21 at 03:02

1 Answers1

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It was added as a compromise against more complicated ideas, actually. Base plus percentage is a pretty standard fee structure, so I went with it.

If I'd been more familiar with the finance world, it would have been expressed in basis points, though, not ppm.

Rusty Russell
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