About this episode
The Stroom Network presents an interesting proposition: staking your bitcoin on the Lightning network, and earning yield from the transaction fees that routing nodes are collecting. To better explain how this system works, Slava and Ros join the show!
Time stamps:
00:01:17 - Introduction to Bitcoin Takeover Podcast Season 16 Episode 54
00:01:23 - Welcoming Slava Zhygulin and Ros from Stroom Network
00:01:52 - Overview of Stroom Network: Liquid staking on Lightning Network
00:02:38 - How Stroom works: Depositing BTC for yield via transaction routing
00:03:55 - Liquid token as receipt for deposited BTC
00:04:21 - Addressing Bitcoin purists' concerns about staking and yield
00:05:32 - Token issuance on Ethereum, redeemable 1:1 with BTC
00:06:37 - Custodian role: Fortuna Custody for secure setup
00:06:49 - User process: Staking BTC, receiving ST BTC token
00:09:06 - Stroom's Lightning node on 1ml.com: 180 BTC capacity, top rankings
00:10:06 - Background: Work with Lightning since 2016, ex-Bitfury team
00:11:15 - Lightning Network capacity: ~5,000 BTC total
00:12:18 - Bullish on Lightning: 4x payment volume growth per River Finance reports
00:14:33 - Lightning's infinite scalability vs. blockchains like Solana
00:16:20 - Node metrics: 127 BTC routed, 65,000 transactions in two months
00:18:00 - Yield source: Real economic activity from routing fees
00:19:06 - Unique BTC yield without proof-of-stake risks
00:19:48 - Comparison to other Bitcoin L2s like Citrea and Alpen Labs
00:22:57 - Custodian details: Fortuna, EU-compliant in Ireland
00:23:37 - Fee structure: 5-10% retained, rest to stakers (bootstrapped at 20%)
00:24:53 - Revenue share model based on routed volumes
00:25:43 - Timeline: Two years of development, challenges with Taproot channels
00:29:04 - Bitcoin covenants: Unlikely to eliminate custodians
00:30:36 - Competitors: Kraken (1% yield), Starkware (2%), Babylon
00:33:06 - Stroom's edge: Yield from real Lightning activity, no token incentives
00:35:24 - Node stats: 65,000 transactions, ~$15M volume
00:36:59 - Average fees: ~0.1%, varies by channel and size
00:38:15 - Profitability estimates: $7,000/month example calculation
00:41:35 - Block (Jack Dorsey's company): 10% APY on $10M node
00:43:32 - Node age impact: Older nodes like Alex Bosworth's attract more traffic
00:45:33 - Encouraging channels: Reliability and high liquidity
00:46:53 - Boosting Lightning adoption: Stablecoins via Taproot Assets, RGB, Lightspark
00:50:27 - Sponsors: Layer 2 Labs, Sideshift.ai, NoOnes.com, Bitcoin.com News
00:53:13 - Node connections: NiceHash, OKX, Kraken, Binance, Wallet of Satoshi
00:56:45 - Fee policy: Dynamic algorithms, 0.1-2 basis points
00:59:36 - Future if Lightning replaced: Bitcoin L2s, BTVM, crosschain swaps
01:00:07 - Long-term vision: Proof-of-stake L2s like Botanics, BTM operators
01:03:07 - Team: Nick Sterningard as advisor
01:03:54 - Challenges in Lightning businesses: LSPs like Phoenix, Breez
01:05:43 - Lightning quirks: Buggy experience
