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Upcoming Lightning Network Withdrawals FAQ

April 18th, 2024

Release Date

Thursday, April 18, 2024

Summary

Zero Hash is close to launching BTC withdrawals across the Lightning Network. This note serves as an update to the initial Lightning Network support note from January 16, 2024. The launch will occur in phases, each unlocking additional functionality:

  • April: Lightning Network Withdrawals to invoices
  • June: Universal Money Address invoice generation
  • Q3: Lightning Deposits, UMA support for withdrawals and deposits

API Endpoints

Are there new API endpoints I need to use?

  • NO, the API will use the existing withdrawals endpoints (/withdrawals/ and /convert_withdraw/) to perform these functions. For Lightning Network withdrawals, input an invoice address instead of a destination address. Destination addresses will continue to send BTC across the Bitcoin Network.
  • For Deposits and additional functionality, please refer to the Lightning Network Testing Guide

Asset Symbol

Is there a new asset symbol?

  • NO, Zero Hash's API will use the existing BTC symbol because that is the asset being sent across the Lightning Network. The destination or invoice address format that is input will be used to differentiate between networks automatically.

Lightning Balance

Will my platform or end customers have a separate Lightning balance?

  • NO, BTC is being transferred and will be deducted from the wallet before being sent.
  • When deposits are enabled in a later phase, any BTC sent across the Lightning Network will appear in the BTC wallet.
  • In the case of /convert_withdraw/ where an RFQ purchase is completed before the withdrawal, BTC is always the asset being purchased regardless of which network (Bitcoin or Lightning) is used.

Destination Address

What do I input as the destination address?

  • For Lightning Network withdrawals, input the destination INVOICE address generated to send BTC across the Lightning Network.
  • For regular BTC withdrawals, input an L1 destination address to continue to send BTC across the Bitcoin Network.
  • The address formats for invoices and addresses are unique, and the format will determine the intended network that is used.

Assuming the destination crypto address below is an LNURL invoice, a frontend could look like the following where the network would be inferred and would not need to be selected but is shown for illustration purposes.

Advantages of Using Lightning Network

What is the advantage of using Lightning Network to send BTC?
The Lightning Network is designed to facilitate fast and inexpensive transactions compared to Layer 1 blockchains like the Bitcoin Network. It achieves these goals by enabling network participants (nodes) to create channels with each other. When payments are made, they route along these paths. Note that network fees on the Lightning Network increase with the amount of value being sent, so for larger amounts a network fee estimate should be called for each network to determine the optimal network to use.

Channel Management

Do I need to do any channel management?
NO - Zero Hash abstracts away the complexity of Lightning Network channel management. You only need to worry about supplying the correct invoice address to the endpoints you are already using!

Supported Invoice Formats

What invoice formats are supported?
There are different types of Lightning Network invoices. Zero Hash plans to support withdrawals for two of these initially at launch: BOLT11, UMA, will follow in June, and LNURL in Q3.

Invoice Generation for Deposits

When will I be able to generate invoices in order to receive deposits?
The ability to generate invoices to receive deposits from the Lightning Network will follow the launch of withdrawals and is planned in June for UMA and Q3 for non-UMA Lightning Network deposits.

Support for UMA

Do you plan to support withdrawals and deposits using UMA?
Yes, the ability to register UMA names and use this format for Lightning Network transactions is planned for June. Zero Hash is open to beginning discussions with your team if this is something you may be interested in offering to your customers.

Geographic Restrictions

Will Lightning transactions be enabled in New York?
No - at this time Lightning Network transactions are not allowed for New York participants.

Additional Questions

What if I have additional questions?
Please reach out to your Zero Hash team, who will be happy to support you.