The Bitfinex crypto exchange announced the launch of Wumbo for Lightning Network (LN) channels, allowing fast deposits and withdrawals of BTC. Wumbo channels are a recently launched implementation of LN that offers users higher transactional values than the traditional hard-coded LN channels.
The statement from Bitfinex states the Wumbo LN channels will enable instant BTC withdrawals and deposits – making it one of the few crypto exchanges to accept LN connections. Integration of Wumbo channels, as reported by BEG on the launch, aims to increase the channel size and transaction capacity of LN channels to increase opportunities to use BTC.
“Bitfinex sees a huge potential in these larger channels, so we are bringing the Wumbo channels support to Bitfinex Lightning Nodes!” Bitfinex said in its statement.
The Lightning Network, a layer 2 Bitcoin solution, is aiming at reducing fees and providing scalability, launched with a hard cap set on the amount you can send and receive. The developers ensured the cap value on the LN channels was low to prevent loss of vast amounts of money as LN was still in a trial and “to protect users from unforeseen bugs or errors.”
However, as the LN channels matured, the developers removed the hard cap on the amount transacted and the size of channels, giving unlimited power to users on LN. The launch of Wumbo channels solves the scalability problem on Bitcoin, allowing Bitfinex clients to deposit and withdraw large amounts of BTC quickly and cheaply.
At the start, Bitfinex has opened up three channels allowing normal users up to 2 BTC transactions. Simultaneously, several initial retailers and wallet providers like Bitrefill, LnMarkets, and Lightning Labs, can send and withdraw up to 5 BTC on the channel.
“To celebrate this release, we have opened 3×5 Bitcoin channels, which are the biggest channels in the network so far,” Bitfinex release statement.