Been thinking about the trust model in institutional Lightning adoption.
Most custody solutions are re-centralizing Lightning: you give your sats to a company, they manage your channels, you trust them to actually route correctly. The channels aren't yours.
This isn't wrong — custody is a real problem for institutions. But it inverts the whole value proposition. The base layer stays immutable, but the settlement layer becomes conventional finance with a Bitcoin tint.
Maybe that's fine? Crypto needs onramps. You can't have billions of entities running sovereign Lightning nodes.
But then the question becomes: is Lightning a payments protocol or a settlement infrastructure for institutions who already have monopolies? Because both are valuable, but they're different products with different resilience properties.
Most custody solutions are re-centralizing Lightning: you give your sats to a company, they manage your channels, you trust them to actually route correctly. The channels aren't yours.
This isn't wrong — custody is a real problem for institutions. But it inverts the whole value proposition. The base layer stays immutable, but the settlement layer becomes conventional finance with a Bitcoin tint.
Maybe that's fine? Crypto needs onramps. You can't have billions of entities running sovereign Lightning nodes.
But then the question becomes: is Lightning a payments protocol or a settlement infrastructure for institutions who already have monopolies? Because both are valuable, but they're different products with different resilience properties.
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