Channeling Interest: How Companies Are Monetizing the Lightning Network | Bitcoin 2026

Uh I'm Sean Anste, the CEO of LQWD. We are a Bitcoin lightning network service provider. Really focused on uh AI, the agentic web. We've got uh systems in 18 countries all over the world and thousands of channels and we know these these guys here. We work with them as part of a great network and uh we're excited to be here. >> Awesome. Uh I'm Jesse Schrader, CEO, co-founder of Inbos Technologies. What we do is we use data to help people allocate Bitcoin on the Lightning network and now stable coins including trading natively on Lightning. >> All right. Hey everyone, I'm Tyler Wood and I am a data scientist and product at block. So we work on the lightning infrastructure that helps cash app users send lightning payments and square businesses receive lightning payments. >> Awesome. Thank you. Um so the focus of this panel is really around looking at lightning and specifically kind of on the liquidity side and how uh there's some unique opportunities popping up or just how things have evolved ever since the network first got created and what are the opportunities that are kind of presenting themselves um in that. So I think first the great place to start here is on the business model of like I think that each business here incorporates lightning in a very unique way. Some it's at the forefront and it's the core, some it's less like core, but it's a very important piece. Um, so I'd love to hear from each one of you kind of how does Lightning fit into your business and how do you actually kind of use Lightning and then ultimately liquidity and routing and all these things to to make money? How does it kind of work for you in that way? >> Sure. So we are a liquidity service provider. So we are all about routing and we we get a little few sats every time a transaction goes across one of our hops. So we have 18 18 nodes 18 hops around the world thousands of channels. So we look at that as this longer term volume game. We see the volume for the lightning network climbing quite quickly. We think the AI agentic age which is already happening now. We just announced an AI only wallet because agents AI wants mathematically pure money and we see it transacting over there. So we for us it's all about maintaining the network seeing it grow. The lightning network is just you know a continuation of the revolution of the internet. This is the open payment rail that we wanted in the '90s. it's finally here and we can see it mass mass uh take off in a really great way. So >> for for Ambos what we do is we provide data and historical data as well as the largest liquidity marketplace out there. So we connect LSPs or light uh liquidity service providers with uh a whole base of customers that need liquidity that supports businesses that are accepting lightning payments into self- custody. >> Yeah. And at Block um we I guess incorporate lightning into our products. And so our main products are Cash App and Square. And um for us, we our monetization strategy with Lightning tends to be like when a Cash App user wants to send Bitcoin with a payment, they purchase it from us. And so we're not like trying to earn any money on the routing or anything like that. Just the lightning infrastructure is the thing that facilitates those transactions. And similarly with Square, um you know, when we facilitate card payments, for example, I think we tend to take like a 2 to 3% fee and pay some of that to the card networks. With Lightning, we can provide uh payment services for a lot cheaper and charge a lower fee. And Lightning is just kind of the underlying layer there and we don't need to monetize it at the routing level. Although sometimes we do incidentally earn some routing income based on just the activity that's happening across our nodes. >> Awesome. Yeah, I think that that's something. Um, so in my company, Voltage, we're very focused on the payment side and we work with basically all all the parties up here to provide the right kind of connectivity to help payments succeed. And that's that's the really really important bit about Lightning is that your payments are not going to work unless you have liquidity in the right place. And so, um, being able to focus on that, uh, to solve users problems, I think is an incredibly important piece. Um, Tyler, last year you guys announced like at the Bitcoin conference last year. Uh, I can't remember what the number was, nine some percent return on uh on the Bitcoin that you put into your channels via routing and just charging these fees and things like that. Are you able to share anything about where that stands today? Do you do you track that? How does how does Cash App think about that? Is that something you guys are looking at consistently or is that a nice just kind of passive thing that you guys uh kind of highlighted last year? Yeah. So, we announced that last year and I think it turned some heads a little bit of people being like, "Whoa, that can you can do that on the lightning network." Um, and so I can help maybe dispel some of the ambiguity around how that works. The first thing I want to do is kind of reframe the conversation away from yield for us and more towards routing revenue. And the reason for that is because this quantity that we're earning from routing, it isn't scaling with the amount of capital that we put on the node. it actually scales in proportion to the amount of real transaction activity that's happening with Cash App. Um, and so if you call it a yield, that might suggest that we could put more money into our nodes and we would be able to earn that same figure. Um, but that's not necessarily the case. And so how we actually earn routing income from the cash app activity is that cash app users are uh sending a lot of payments. They can send and receive, but on net they send way more than they receive. And so when we open a lightning channel, all the balance starts on our side. On net, the cash app users push it out to the other side of the channel and we end up with all of this inbound liquidity. And cash app users are sending payments so consistently outbound that we just kind of accumulate inbound liquidity. And I think that we're probably one of the, you know, lowest cost inbound liquidity uh generators on the whole network. So I tend to call Cash App the inbound liquidity generation engine. uh and we have all this inbound liquidity piling up and basically we can use that inbound liquidity to receive payments on Square as kind of the highest use of it for us. Uh but right now the Square volumes aren't quite as big as Cash App. So we still have kind of a net sending activity. Uh and in the meantime we can monetize that by offering that inbound liquidity to other nodes on the network by opening channels to swap services. And so you can open a channel to something like lightning loop and uh set a channel fee on that of 2 to 3,000 ppm. That's like 0.2 to.3%. Uh and then when a node that needs inbound liquidity uses the loop service, they can use that channel. We get paid a little bit for that liquidity. And if you do that high velocity cycle through it a lot, that's how you end up with um earning routing revenue that looks really nice as a function of how much capital that you put on the node. Um so that's how it works. And then the other thing I want to mention is just that for us the like number one P1 goal for running our lightning infrastructure is to make uh payments reliable for Cash App users and Square users. And if I had to put like earning routing revenue as a prioritization there, it wouldn't even necessarily be like a P2 or a P3. It's kind of something that just incidentally happens. And it's like something that we almost need to do as part of a good practice of managing our node to keep the channel balances balanced. Um but for us it always comes back to providing reliable service for cash app users and Square users. >> Yeah. Awesome. Yeah, I think that that's a great great to highlight the flywheel that has to happen. Like obviously Lightning is a payments network. Bitcoin is made for payments. We want to keep payments front and center, but to make payments successful, you got to have the liquidity in the right places and you got to have all this other things um set up. Um so that no that sounds um great. And so from thinking about just like kind of a little bit not not too technical but like kind of how do you guys in each business use liquidity from like ways that your your product operates or the ways the solutions that you're offering for your customers? How do you actually use Bitcoin in Lightning to do what you do? >> I'll answer that because we actually use some of your services too, Jesse. So they've got a great great service there. But so you know as a public company we used our public treasury to buy Bitcoin. We don't have no debt but we continue to add to that. So we just make sure we have enough on the balance sheet there. Uh we deploy it across thousands of channels but we actually use AI because we have all this kind of we have a lot of data from our network that we're able to actually then have intelligent rebalancing using AI uh which is actually very great for us. We use the loop services and we certainly use uh Jesse's uh the Ambos services and the the stuff that he'll get into there. But um you know to uh to his point previously um we're not so focused on just how much money we can make off the network. We're focused on how reliable and how great we can make it and the rest is coming naturally to us and we see it just growing very growing naturally and we do see the big push right now is uh certainly AI and the agentic web agents actually using it as a native payment uh payment layer because it is instant not just for payments AI is using it for identification au authentication and other things like that and then they need this incredible network they can settle in a millisecond with a single sat uh to do what they do and this is the I think a big component of growth component for the lightning network coming up here uh that's going to affect all of our companies in in a big way. In fact, we use uh we use LDK as well from uh frame blocks. Thanks, guys. Um and that's a big part of it. For us, uh liquidity is kind of a denomination of connectivity because this is a peer-to-peer payments network and now it's a trading network as well. So, we're using liquidity. We have uh liquidity providers like LQWD and others uh through our own Rails product to deploy Bitcoin in strategic locations so that you can have very high payment reliability and we've used uh machine learning to train it on increasing the throughput so you can have larger and larger payments happen over lightning and so lightning is no longer just a payments network for microp payments but you can also buy hotel rooms plane flights, uh maybe even purchase a house natively over the lightning network. And that means instant settlement for payments that large. And to make those things happen, you need quite a bit of liquidity. And so this is really our role in creating a liquidity marketplace so that you could be able to purchase that whenever you need it for your payments operations. >> Awesome. And anything to add on that Tyler? how you guys kind of you like I think Cash App is really unique in that you know Cash App isn't made for Lightning liquidity or anything but how do you guys kind of just use it to make Cash App so good at just being Cash App. Yeah. Um so like Jesse we use uh data to try to inform our liquidity allocation. I think his stuff is uh probably a little bit more sophisticated than our stuff. Um which is awesome. Uh, but we kind of do it on easy mode honestly because cash app is a custodial wallet. So we know where people are sending payments to and so we can know ahead of time where we should put channels and also because cash app is this net sender that means that we almost always just need to create channels and we don't need to acquire inbound externally. Um, so it's pretty simple for us and that enables us to provide a really good experience. Uh, but I think things will get more complicated in the future when Square potentially uh gets bigger and maybe it starts to dominate that equation and uh receive more than Cash App is sending. Then we're going to be a net sync on the network and need to acquire inbound. That makes it a lot harder. I'm excited for that future. You should all go buy goods and services out in the real world at Square and try to grow that so that I have this new fun problem to solve. >> Yeah. Awesome. Um, great. And so thinking about I think that something that is very topical that a lot of people are kind of interested in looking at is like yield from the from the other side not from the business side but whether it's a consumer or a business or something like that wants to hey put my Bitcoin to work and earn yield on it. Um what does that landscape look like today? Like what is feasible? What is not feasible? How does that kind of look like for anyone that is thinking about like this yield earning inside of lightning and and how can they participate and does it make sense? >> Yeah. So certainly we our company we've been approached by a number of other companies that have Bitcoin on their balance sheet saying hey we want to be able to put a bitcoin to work on the lightning network in a passive way earn something like a money market fund uh type yield on it and so you know for our company we've seen you know yields anywhere between 3 and 6% and we also calculate a weighted APR which is a higher number but that's about short-term velocity how much uh APR you get on a channel just opening so we have a few ways of calculating the metric but the only one that really matters is is the the full-on APR itself but what we you see in the future and we've actually looked at it is the thing called chain liquidity. So a company like a mining company or another treasury company could potentially put their Bitcoin on a node have chain liquidity. It's still non-custodial but we can draw off their liquidity as we need to and then down the line you may see see things where there is a an actual bear bond market. So companies like ours could actually produce a where you can you could actually literally have a custodian service have a bearabond token and I hate to use the word token but it would be an actual security would have to be cleared by the regulators. It would trade on the market and then you the person could either redeem the bitcoin off the network when they want it back still earn yield on it or trade it on an aftermarket. Now you have a true Wall Street bear bond that actually earns yield in bitcoin that'll probably come down the line. There are a lot of regulations in the way but I think the non-custodial thing is the most exciting for me in the short term. Uh last year at this conference we we announced Rails our liquidity provider product and that allows people to keep self-custody and deploy their bitcoin on lightning and the interest that we've gotten from that product you know essentially has acred to a weight list of 400 bitcoin. Uh there's there's essentially unlimited demand for yields on your bitcoin denominated in bitcoin and that's really what this product offers. However, like the the yields or the fees that are derived from payment activity are completely tied to payment activity. So the more lightning traffic, the more transactions, the more trading, the more payments that happen on Lightning natively, that drives the fees that can be derived from this uh allowing a passive vehicle for someone to start acrewing additional bitcoin or stable coins through uh this this vehicle without putting their funds at risk in some uh strange DeFi protocol where they have to give up custody, but they can keep it in self-custody and still benefit from the activity of the network. I love your point, Jesse, about growing the lightning economy. And to me, that's what it all comes back to is if we want these opportunities to exist where you can earn a return on your Bitcoin, we just need more and more real economic activity happening on Lightning because that's what's going to drive value and allow you to deploy more Bitcoin. So, block, we have a corporate treasury of about 8,000 Bitcoin. Uh we have 240 Bitcoin capacity on our node. And so, that tells you a little bit about how saturated we think our, you know, revenue earning opportunity is. If we could put 8,000 Bitcoin on the Lightning Network and scale that uh you know 9% number, obviously we would do that. But right now it would just dilute that revenue uh because I think that the the PI is just not big enough right now. So for us, we're super focused on just growing that pie, growing the Lightning economy, getting more activity on there. And then I think as we actually grow the activity of real transactions for real goods and services that are happening with Bitcoin on lightning that some of this monetization stuff will just naturally follow. But I think we got to put the value creation first. >> Yeah, absolutely. And I think that that's uh definitely important is that none of this yield stuff matters or liquidity stuff matters if we don't have the payments to support it. Like we got to have the activity um for any of this to really u matter and make sense. Um, so no, that sounds great. And I love I love the the call out on like being able to that people have always wanted to get some kind of yield or return on their Bitcoin and we saw the block fies and all of these things come and come and go and ended up very bad for a lot of people. Similarly in the the DeFi ecosystem just like last week or something a whole a whole protocol went went um underwater because it was like a one of one like there's just so many problems out there and this is uh definitely a a better alternative um as we look to the future. So shifting gears a little bit, how do we think about, you know, there's a lot of new things happening on Bitcoin like stable coins via taper assets or newer other pro like side chain protocols and things like that as well as you know you're mentioning AI. Tons of new stuff happening. How does that kind of affect yield and liquidity and things on lightning? Does it help it? Does it hurt it? Is it a new problem to solve? Like how do we think about these new things? Yeah, I mean it certainly it adds to more things we have to look at, but I think a lot of these things will continue to increase the overall uh um activity on the network itself. Uh and we're excited to see that. So, but in terms of like you know the the the APRs and the actual traffic that's been driving it and it's still still our biggest view, it's going to be AI that's going to drive it over the longer term here. But we've got uh you know stable coins are going to be active. The way I look at the lightly network and I look at it from my own past history um it is an open payment layer of the internet itself. if it is the true port, you know, for this true payment that we wanted to do back in the 90s. So, I'm dating myself, but we didn't exist. And now it has the magic of Bitcoin, which is a trust protocol where its first use case is money. And now we're scaling Bitcoin the same way we scaled the internet by having multiple layers of technology. It is a true peer-to-peer is a it's architected like the internet because it is the internet. And so this this kind of stuff here is coming naturally to it because this pay there is it's a frictionless payment system. And we really saw in in our in our own ecosystem where we had just in time channel show up the last couple years where the iteration of the software went from 30% of the payments would work back in 2015 when it was very experimental. Now it's 99.9999 whatever and and it works like magic behind the scenes. And that's the thing people were going to use it. They won't even know they're using it. And that's where the adoption is going to continue to go up. I think for merchant adoption a lot of people have been afraid of Bitcoin's volatility and really that that ends today because uh we just launched Rails X which is the peer-to-peer trading layer uh that is available through Thunderhub. So this is your own node your own keys and that you're able to use the Lightning network as a peer-to-peer DEX. So this is the first DEX on Bitcoin. And so now you'll be able to use tapered assets uh swap between Bitcoin, USDT, USDC available as wrap stable coins uh natively on Lightning. So you can execute trades far more efficiently than you could use any centralized exchange in order to do that. And that's all enabled by the atomic payments that are available on Lightning. And so this now this functionality is now available to anyone that wants to participate that wants to run a node and be able to manage their treasury, accept payments and stable coins. And really that is mapping to the 20 trillion dollar market that we're seeing in stable coins today. Uh and being able to move that activity onto Bitcoin where we really see Bitcoin as that fundamental technology for the global economy. >> Yeah. Um, I think that we have a version of, you know, stable coin payments on Cash App and Square right now that's kind of done at the app layer. And so we launched this, I think in November where Cash App users can basically pay a lightning invoice from their dollar balance and we're doing essentially like a just in time Bitcoin buy on their behalf and then sending it. And then we also have the reverse functionality in Square. Um, and I think that that functionality has shown really good adoption and product market fit. So if we can bring that to a more robust protocol level solution, that's awesome. Um and I think that one of the ways that Bitcoin wins at block, we believe that um lightning is going to be kind of the lingua frana of value transfer in the future. Uh and that will just be the you know the value transfer protocol for the internet. And if we can try to leverage the fact that this is going to be the best open money network and if we kind of co-opt other um you know stable coins and different things and make them interoperable with that network, it builds the network effect of lightning and it's going to be better for everyone that is participating. So, I kind of think that it's more of like an open tent mentality and it's like all of these things are welcome and if we can get more things, you know, settling value using lightning, using HTLC's, using lightning routing, that literally benefits everyone that's plugged into this network and that's how we win. Um, so love to see it. >> Welcome to predict. The world is a market. Everything is a market. Every headline moves the line. Every moment is your market. Call the moves. Bet on your instinct, your prediction, your edge. Dual bits. Predict where everything is a market. >> Yeah, I could couldn't agree more. And I think that that's something that um the the the payments use case and doing the more activity we can bring to Bitcoin from like the payment side also helps like the huddle uh kind of narrative of it has to has to have both for it to be uh this this the asset that we all want it to be you know ultimately. So I think I totally agree on being able to to the more we can bring to it the better. Um what what how are you guys thinking about things that are um the hurdles the things that are uh that we need to solve still the things that we need to do better on inside of lightning you know maybe from the liquidity spec perspective but also kind of more broadly what are the things that we need to solve for what are the things that we need to be looking to you know when we come to the Bitcoin conference next year what are the things that we want to be able to solve by then >> yeah and certainly uh you know the liquidity behind the scenes is just happening behind the scenes and end users don't care about that they do care about a a very easy to use interface case it just simply works and they don't know it. And and I think you know you're going to see stuff around we we get out of our own bubble in North America here and we get around the world where people want Bitcoin because they they don't trust the governments and nor should they their their currencies are going to zero. Uh and and ultimately this is this lightning network and Bitcoin network. It's mathematically pure money. It is it is the trust protocol. It could be used by anybody. Anyone can hop on. Anyone can hop off. There are no restrictions. And and the more people see see that understand that message, the more people are going to use it. And it's our job to make it as easy as possible for that to happen in an open- source format where it can really change how the world runs. >> As as we've been chatting with people about deploying their Bitcoin on Lightning, one of the barriers that we've run into is that many Bitcoin treasury companies need to use a custodian. Um, we built this self-custody product and that means that the people that we've actually been serving are the high netw worth individuals. um and smaller businesses that aren't so restricted. So, I think what we're seeing uh coming forward from this is that custodians will begin to uh integrate these types of systems and be able to deploy help help their customers deploy Bitcoin on the Lightning Network and tap into these uh low-risk opportunities to support the Bitcoin payments network. Yeah, I don't have that much to add to that, but at the risk of being a broken uh record, I think that still I'm just going to harp on like growing the size of the lightning economy using Bitcoin as everyday money and like if we have more people buying and selling stuff with Bitcoin, then I think a lot of this stuff will kind of like fall into place. >> Yeah, absolutely. um kind of some like closing thoughts, but you know, when you guys are thinking about, you know, the next like year or so, what kind of metrics are you thinking for? What are you tracking? What are what are you guys looking for in your companies to kind of track success or growth or whatever it is that you guys are looking at? Um and yeah, how do you guys think about like, you know, alongside the hurdles, what are you looking at to make sure that things are going correctly and that the the network is on the right trajectory? >> Sure. So we we look at the number of bit amount of bitcoin that's on the network itself. How much is being deployed uh and actually you know how efficiently is it being used and so you know the rebalancing we've talked about the number of channels certainly in the early days it was done by a lot of grassroots engineers from their homes you're now seeing it become a little more corporate you're going to get the mix of everything companies like ours and like Jesse we're we're the lightning we're the service providers behind the things of uh you know Verizon connected to Rogers and all the communication stuff that goes around the world for the internet as it is. These are the foundations of of the payment layers that's happening next year that's that's going on there. So, you know, right now we're seeing stable coins. Stable coin is a nice gateway drug to Bitcoin. Uh, you know, this is an open network and it's going to be used in the way people are going to use it. It is a morally agnostic network and uh eventually the mathematically pure money just continues to go through. >> Yeah, we're we're certainly watching the volumes grow. I think the river report was really helpful to show that, you know, lightning has gone up by, you know, 400x over the past year. Um, and I think we'll see more of that with uh with Square's continued adoption, being able to to do Lightning payments every day. And really, we're watching the entire capacity of the Lightning Network cycle uh sometimes multiple times per month. Uh, and like within our own cluster, we're we're cycling the entire 61 bitcoin that we've deployed every single month. uh and I think that trend is just going to continue as we see more and more payment volume adoption and trading volume adoption uh that is happening on this network. >> Yeah. So internally we're like laser focused on reliable payments uh for Cash App and Square. Um but I think also outside of that what I would like to see is for it to be economically rational for consumers to use Bitcoin payments. So, like consumers right now, if you ask them like, "Do you want to use Bitcoin?" They're like, "Well, I have my credit card. It gives me these awesome rewards. It has this amazing tap to pay user experience. Um, I can do chargebacks, like all this stuff. Why would I like pay bitcoin on cash app? It has a 3% fee and then send it and like maybe I have a tax liability, all that stuff." And so I think we're laser focused on trying to make that user experience like on par with cards and actually make it so that normal non- Bitcoin people think it's economically rational to pay via Bitcoin even if they don't know that it's Bitcoin. You know, it could just be something that's, you know, pay via Cash App at Square or pay via this external wallet or something like that. That's the beauty of an open network. But I think for us, we want to like actually shift um payment activity not just from people who are motivated to pay via Bitcoin because they're Bitcoiners, but I want it to be economically rational for the normal person to do that payment. And I think that's possible. >> Yeah, absolutely. Um great. Thank you guys for your answers. We got about 30 seconds here. I'd love just any kind of closing thoughts or, you know, shout out to where people can find you or learn more about your companies. >> Yeah, so uh I'm I'm going to be here. My name is Sean from LQWD. for publicly trade in on the TSX. Uh we've been around for a long time. If you have questions about Bitcoin itself, not even just about the company, come find me. Happy to talk and share share our experiences over the last uh long time in tech. So >> uh yeah, you can always find us at amboss.te. Uh and I would love it if uh you all try out some trading natively on Lightning without giving up your KYC information or any of that. It's all available through ThunderHub, which is an open source manager. Uh, and yeah, give it a try. Give us your feedback. Um, we'd love to see this take off. >> Yeah, thanks everyone. Uh, my name is Tyler and I work at Block. Um, the one parting thought I'd have is if you've never spent Bitcoin, now is your time to do it. Uh, we have a Block Village out there and then there's also the PTC Inc. stores. I think we're giving 5% back if you go make your first Bitcoin payment. So, go try it out. I think you'll be blown away by the UX and spending Bitcoin feels good and you should do it more. >> Awesome. Thanks everybody. Let's give him a round of applause. >> Every year this community comes together to celebrate, to debate, to build what comes next. And every year the stage gets bigger. Sound money center stage. So where do you go to celebrate the next chapter in Bitcoin history? You come home. Nashville, July 2027.