Subject: Re: [Ledger] Going Beyond Only Two Parties (Sender and Receiver): Enabling Multilateral Netting through implementing Liquidity-Saving Mechanisms (LSM) on Interledger

From: David Nicol <[email-masked]>
Date: Fri, 12 Oct 2018 14:03:51 -0500

I think this kind of thing would be handled by a Connector, within the
current interledger vision.

Please confirm?

On Fri, Oct 12, 2018 at 12:15 PM Nathan Aw <[email-masked]> wrote:

> Hi all,
>
> Today, interledger is able to connect a pair of sender and receiver via
> senders to deliver payment of value.
>
> In the financial markets, we need to go beyond only just two parties.
>
> Therefore, I am exploring if it is possible to enable a multilateral
> netting model through implementing Liquidity-Saving Mechanisms (LSM) on
> Interledger.
>
> Are there any similar thoughts around this area of research?
>

-- 
"I don't know about that, as it is outside of my area of expertise." --
competent specialized practitioners, all the time

---

From: Evan Schwartz <[email-masked]>
Date: Sat, 13 Oct 2018 09:17:59 -0700

That's correct. Interledger packets go between a single sender and receiver
but transactions can be done on credit and then netted and settled later.

If multiple connectors wanted to net out the obligations among themselves
automatically they could either track their balances separately and use a
service to find an optional way to settle, or they could use another
connector between them that would automatically track each of their
obligations and net them out. For the second option, nothing additional
would need to be built, but that connector would need to be capable of
processing all of the packets between the connectors (which may mean the
first option is a better approach).

On Sat, Oct 13, 2018, 9:00 AM Nathan Aw <[email-masked]> wrote:

> Hi David,
>
> Thats my guess too. Certainly this enhancement/capability will fall in the
> scope of connector and perhaps also sender and receiver as we are
> introducing a multilateral netting liquidity saving mechanism across
> different parties.
>
> For interledger to work within existing capital markets vis-a-vis cryptos,
> we will need such liquidity saving mechanisms to be implemented across
> sender, receiver and connectors.
>
> Can the interledger experts chime in as well?  On the possibility of
> implementing central banks liquidity saving mechanism within interledger --
> perhaps an additional layer/abstraction on top of today's interledger
> network.
>
> Would love to explore and deep dive into such a model/layer/abstraction.
>
> Nathan Aw
>
> On Sat, 13 Oct 2018, 03:04 David Nicol, <[email-masked]> wrote:
>