Good morning aj,

> > Basically, the intuition "small decrease in `htlc_max_msat` == small 
> > decrease in payment volume" inherently assumes that HTLC sizes have a flat 
> > distribution across all possible sizes.
> 
> 
> The intuition is really the other way around: if you want a stable,
> decentralised network, then you need the driving decision on routing to
> be something other than just "who's cheaper by 0.0001%" -- otherwise
> everyone just chooses the same route at all times (which becomes
> centralised towards the single provider who can best monetise forwarding
> via something other than fees), and probably that route quickly becomes
> unusable due to being drained (which isn't stable).

All monetisation is fee-based; the question is who pays the fees.
Certainly gossiped feerates will work less effectively if fees are paid via 
another mechanism.

In particular, discussing with actual forwarding node operators reveals that 
most of them think that CLBOSS undercuts fees too much searching a short-term 
profit, quickly depleting its usable liquidity in the long term.
In short, they want CLBOSS modified to raise fees and preserve the liquidity 
supply.
This suggests to me that channel saturation due to being cheaper by 0.0001% is 
not something that will occur often, as most operators will settle to a feerate 
that maximizes their earnings per unit liquidity they can provide, not trying 
to undercut everyone.

In particular, the fact that rebalancing already exists as part of the network 
protocol means that anyone trying to undercut will find their liquidity being 
bought out by more patient operators, who are willing to sacrifice short-term 
profits for long-term consistent earnings.

In short, the market will fix itself once we have more rational automated 
actors in place (i.e. not CLBOSS).
Indeed, price signals are always places where you should pay attention to 
whether you need more of a good or not.

But maybe I am just modelling everything incorrectly.
Certainly the fact that fees can be paid by somebody else other than senders 
can make gossiped feerates (which are the sender-paid feerates) less effective.

Regards,
ZmnSCPxj
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