Amboss, a data analytics provider for the Bitcoin Lightning Network (LN), has introduced LINER (Lightning Network Rate), an innovative index designed to measure bitcoin returns on the Lightning Network and showcase its potential for low-risk enterprise yield. According to a press release shared with Bitcoin Magazine, LINER serves as a benchmark interest rate for bitcoin without credit risk, similar to the traditional finance’s LIBOR (London Interbank Offered Rate). The index aims to provide an alternative to enterprises seeking exposure to bitcoin while avoiding the credit risk associated with CeFi yield platforms.

“By communicating real yield rates from bitcoin held on the LN, enterprises will recognize the strategic error in trusting CeFi yield platforms while capturing the benefits of payment network disruption that is decades overdue,” said Jesse Shrader, co-founder and CEO of Amboss. Nik Bhatia, creator of The Bitcoin Layer, praised LINER as a first-of-its-kind reference rate derived from the Lightning Network, contributing to the establishment of unmanipulated money markets independent of a central authority.

Allen Farrington, a Bitcoin writer and investor, acknowledged the value of a reference rate like LINER for assessing the true cost of capital, highlighting the Lightning Network’s growth as a self-sustaining financial ecosystem for both retail and enterprise needs. 

Amboss also operates Magma, a marketplace facilitating the buying and selling of Lightning channels, enabling bitcoin holders to earn BTC from opening Lightning channels to various destinations. “Since Lightning channels are self-custodial ways to hold bitcoin, Magma enables novel bitcoin yield without custodial risk, avoiding the pitfalls of failed CeFi yield platforms like Celsius and BlockFi,” the press release stated.

LINER comprises two insightful metrics: LINER Cost and LINER Yield, which provide enterprises with valuable insights into the lightning market. These metrics allow for comparisons between LINER Cost and traditional payment card fees, empowering large bitcoin holders to make informed decisions regarding their bitcoin holdings.

Jonathan Bier, an author and investor, noted the potential future significance of the LINER index as a reference rate for Bitcoin-based investment decisions. The introduction of LINER opens up possibilities for portfolio managers, investors and businesses to leverage the index in their decision-making processes.

With LINER, Amboss aims to encourage enterprise adoption of the Lightning Network by demonstrating the cost savings and low-risk yield potential offered by Lightning-enabled payment infrastructure. The index provides a clear incentive for large bitcoin holders to utilize self-custodial strategies and earn higher returns while minimizing risk. To access more information about Amboss and LINER, interested parties can check out the overview and https://amboss.space/stats/liner.

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Filed under: Bitcoin - @ June 6, 2023 4:03 pm