This month saw the Lightning Network's latest upgrade, Wumbo Channels, receive a warm welcome from some of the largest players in the game. Specifically, the popular exchange Bitfinex welcomed the upgrade with open arms. Notably, Bitfinex was one of the first major exchanges to integrate the Lightning Network. At the time, executives stated that the move would:
“enable retailers and service providers to build new, innovative applications and sell high-value goods and services over the Lightning Network as they help to reduce the requirements to open and close multiple channels”
The developers hit the nail on the head with that prediction. This month saw this scenario playout as the exchange welcomed the Lightning Network Wumbo Channel upgrade. According to a company blog post, the firm now proudly operates two lightning nodes. These nodes hold a combined public capacity of over 100 BTC. Consequently, the integration of the nodes will provide the network with two reliable and stable LN-payment routing services. Best of all, since all transactions are off-chain, there are minuscule fees.
Bitfinex Integrates Wumbo Channels
Bitfinex Supports Lightning Network
The integration brings some exciting new capabilities to Bitfinex users. For one, the integration reduces the requirements to open and close multiple channels. It also provides exchange users the ability to deposit and withdraw large amounts of Bitcoin quickly and at a way better rate than from the Mainnet.
Bitfinex developers hope the introduction of Wumbo will provide users with more trading opportunities. Additionally, they believe that Wumbo can help push adoption in the commercial sector. Specifically, it enables retailers and service providers to build new, innovative applications.
Bitfinex Wumbo Details
According to company documentation, Bitfinex now allows users to open channels with up to 5 bitcoin capacity. To do so, users must link an LN-enabled wallet. Currently, the exchange supports a variety of wallet options including Bitrefill, LnMarkets, and Lightning Labs. This list is set to expand in the coming weeks.
What's a Wumbo?
Wumbo channels are simply Lightning Network channels with no limit restrictions. Notably, non-Wumbo channels are currently capped at 0.167 BTC. Additionally, these standard channels have a payment size cap of around $500. These caps were meant as a safety measure to protect users during the Lightning Networks Beta testing stage. While the network is still in BETA testing, it has matured enough to start to ease these restrictions.
Bitfinex Adds Wumbo Channel Support
Wumbo is an opt-in feature. Its name originates from a Sponge Bob Square Pants episode in which the characters walk around asking each other if they Wumbo. Technically speaking, Wumbo channels do a lot for the Lightning Network and its users. When you can send larger transactions and higher volumes, it decreases the overall fees and the work associated with larger payments.
Bitfinex is one of the most popular crypto exchanges in the market. The firm is best known as the first exchange to introduce the worlds to USDT. Notably, many consider Bitfinex as the sister company of Tether (USDT). The firm stays true to its pioneering spirit with its decision to adopt support for Wumbo channels. Likewise, the crypto community will continue to support this innovative exchanges.
Wumbo Time Baby
The addition of Wumbo to Bitfinex should provide other exchanges with the confidence to make this all-important step. At this point, any exchanges that don't support the Lightning Network are being irresponsible to their users. In the future, the Lightning Network is sure to be the standard for most Bitcoin transactions.