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I’ve been thinking about extending the Cashu architecture by integrating mint services with LSP services (similar to zeus and breez) as a custodial solution for seamless onboarding into bitcoin without upfront fees. This approach uses Cashu Bitcoin tokens to initially onboard with custodying through the Cashu mint, allowing the user to eventually accumulate enough bitcoin to open their own Lightning channels.

By integrating an LSP (Lightning Service Provider) directly into the Cashu mint, we allow users to not only manage tokens but also benefit from self-custody of private lightning channels. The Cashu mint would essentially act as both a mint and an LSP, offering more incentives for honest operation (given the profitability of fees from both Lightning transactions and channel openings).

This dual functionality also enables zero-fee Lightning transactions between the wallet and the mint, making the user experience more seamless. Instead of requiring users to store tokens themselves, the mint could process these tokens immediately as Lightning payments to the wallet's channel, reducing custody overhead and eliminating onboarding fees.

The real innovation here is in the user journey. By accumulating Cashu tokens, a user could eventually open their own Lightning channel with minimal cost and hold their own keys. This system offers an easy path to self-custody while reducing the barriers to entry—giving Cashu mint more flexibility and financial incentives while users get lower fees and better security.

By offering liquidity provisioning for a fee on the mint’s side, we can create bidirectional channels, enhancing the overall Lightning experience for users. The potential for this integrated approach could reshape how we view custodial Lightning solutions, providing a clear path from onboarding to self-custody.

Would love to hear your thoughts on this. Could this architecture align with the broader vision of the Cashu protocol and Lightning adoption?

#minibits #cashu #ecash #enuts

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