{"about":{"site":"https://codewithpapers.app","non_affiliation":"Code with Papers and Syntology are not affiliated with, endorsed by, or sponsored by Papers with Code, Meta, or the pwc-archive mirror.","licence":"CC BY-SA 4.0","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","attribution":"https://codewithpapers.app/attribution","modified":"archive material modified by Syntology; see the attribution page"},"url":"/paper/deep-reinforcement-learning-based-rebalancing","title":"Deep Reinforcement Learning-based Rebalancing Policies for Profit Maximization of Relay Nodes in Payment Channel Networks","arxiv_id":"2210.07302","date":"2022-10-13","proceeding":null,"authors":["Nikolaos Papadis","Leandros Tassiulas"],"abstract":"Payment channel networks (PCNs) are a layer-2 blockchain scalability solution, with its main entity, the payment channel, enabling transactions between pairs of nodes \"off-chain,\" thus reducing the burden on the layer-1 network. Nodes with multiple channels can serve as relays for multihop payments by providing their liquidity and withholding part of the payment amount as a fee. Relay nodes might after a while end up with one or more unbalanced channels, and thus need to trigger a rebalancing operation. In this paper, we study how a relay node can maximize its profits from fees by using the rebalancing method of submarine swaps. We introduce a stochastic model to capture the dynamics of a relay node observing random transaction arrivals and performing occasional rebalancing operations, and express the system evolution as a Markov Decision Process. We formulate the problem of the maximization of the node's fortune over time over all rebalancing policies, and approximate the optimal solution by designing a Deep Reinforcement Learning (DRL)-based rebalancing policy. We build a discrete event simulator of the system and use it to demonstrate the DRL policy's superior performance under most conditions by conducting a comparative study of different policies and parameterizations. Our work is the first to introduce DRL for liquidity management in the complex world of PCNs.","url_abs":"https://arxiv.org/abs/2210.07302v2","url_pdf":"https://arxiv.org/pdf/2210.07302v2.pdf","source":{"archive":"pwc-archive (Hugging Face), CC BY-SA 4.0","snapshot":"2025-07-28","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","row_kind":"abstracts"},"code_links":[{"paper_slug":"deep-reinforcement-learning-based-rebalancing","repo_url":"https://github.com/npapadis/payment-channel-rebalancing","is_official":1,"mentioned_in_paper":1,"mentioned_in_github":1,"framework":"pytorch","reach":null}],"tasks":[{"task_slug":"deep-reinforcement-learning","task_name":"Deep Reinforcement Learning"}],"methods":[],"datasets_introduced":[],"methods_introduced":[],"results":[],"syntology":{"atlas_url":null,"mcp":null,"developers":"https://syntology.ai/developers"},"arxiv_metadata":null,"syntology_extracted_results":null}