Exciting New Partnership Announcement for Hive Power & Liquidity.Network

We are thrilled to announce a strategic partnership between Hive Power & Liquidity.Network.

Why Hive Power and Liquidity Network perfectly fit together?

Crafting and maintaining energy communities that collaborate through a public blockchain requires a scalable, congestion resilient and secure payment settling system. As participants will develop their respective optimizations and efficient trading strategies, the settlement system has to remain responsive and cost-efficient, even in the event of a significant growth.

Liquidity.Network’s off-chain payment system is the current state of the art real-time off-chain payment solution that has already been deployed on the Ethereum Testnet. Opening payment channels is performed off-chain, and thus for free, which allows the Hive Power communities to grow significantly while keeping operating costs to a minimum. Liquidity.Network’s trustless solution moreover features no rigidly locked funds, low maintenance costs, easy routing and off-chain refills. As such, Liquidity.Network’s solution perfectly fits Hive Power’s market solution.

Energy Market Disruption

Energy markets are undergoing enormous changes, pushed by the increase of renewable generation and the emergence of innovative smart grid solutions. It’s likely that we will move towards a regional approach to grid control and security of supply. Newly improved price signals will be needed at a local level and energy markets will develop in the distribution grid to efficiently deal with problems like balancing and demand-side management. A higher number of stakeholders will be involved in these markets, as small producers and consumers will join them.

As a consequence, the amount of energy traded per market participant will decrease but, at the same time, real-time pricing will become more important, especially for grid balancing.

Let’s summarize:

  • Local energy markets are coming
  • Trading will be fast, to respond to rapidly changing price signals
  • Many stakeholders will be involved
  • The amount of the energy per trade will be small, corresponding to micro payments

Hive Power aims to lead this transition. Hive Power’s core business is the development of a turnkey solution for the creation and management of local energy communities on the blockchain, providing an economic optimization through the development of efficient trading mechanisms. For such solutions to work, there is the fundamental need for an efficient way to transfer money between the market participants in a fast, secure and cost-efficient manner.

Liquidity.Network for Scalable Payments

When one attempts to implement local energy markets on a public blockchain purely based on smart contracts, one systematically clashes with the reality of having to pay too high transaction fees (both in money and in energy) and with a clear lack of scalability. Among the strategies proposed to deal with these issues, off-chain transaction systems are at moment those with the highest odds of success, at least in the short term.

That’s where Liquidity.Network comes into play. Liquidity.Network off-chain payment network is perfectly tailored to Hive Power’s market solution, as it allows real-time small value transfer at very low transaction costs in a secure and transparent way (actions are auditable). Another important innovative aspect of Liquidity.Network’s solution, which distinguishes it from other off-chain payment solutions, is the implementation of n-party payment hubs. This is ideal for Hive Power’s use case, in which the number of market players can be high and, under certain circumstances, they will not know a priori with whom they will trade.

Liquidity.Network’s Competitive Advantages

This Section outlines the competitive advantages of Liquidity.Network with respect to alternative off-chain payment systems. As Hive Power’s platform is based on the Ethereum blockchain, we compare Liquidity.Network with Raiden, a known off-chain payment solution for Ethereum, and discuss why we believe that Liquidity.Network offers a better alternative.

Low Maintenance Costs

In Raiden for any payment channel (PC), a user has to deploy a new contract on the blockchain. This design choice results in a huge number of equal contracts deployed, instead to have a unique one able to manage (i.e. open/close/refill) many PCs. Besides, the contracts proliferation has no benefits in terms of security, being all of them equal and so vulnerable to an eventual bug.

Liquidity.Network provides a light and secure approach to the creation of new PCs. Opening a payment channel is free and instantaneously done off-chain (see https://wallet.liquidity.network). Opening a payment channel moreover does not require the deployment of new contracts, avoiding to have a huge amount of equal contracts operating on the blockchain.

No Rigid Funds Locked

In Raiden, only 2-party payment channels can be established and each one of them requires collateral to be locked up. Using this solution for the implementation of a local market with a decent amount of users would require a huge amount of collateral to be staked.

Liquidity.Network provides n-party payment hubs. No collaterals are required for the channel openings, while trustlessness is retained. The overall collateral requirements of a Liquidity.Network hub are significantly lower than if Raiden were to build a hub using their 2-party payment technology.

Off-chain refill

A refilling of an open PC can be performed in Raiden, but only with an expensive on-chain transaction.

In Liquidity.Network refills of the PCs can be performed without on-chain transactions.

Easy Routing

Being based on a hub-network structure, Liquidity.Network requires significantly less routing than non-hub solutions like Raiden. Indeed, practically the routing acts at the hubs level, which can be efficiently interconnected in terms of decentralization and redundancy.

As it can be seen, the benefits of implementing Liquidity.Network as an off-chain payment system are substantial. With this solution, the energy sharing communities are guaranteed the ability to transfer money between the market participants in a fast, secure and cost-effective manner. For this reason both the Hive Power and Liquidity.Network teams are thrilled to work together towards the revolution of the energy market, where local energy communities will prevail, trading will be faster, and a lot of stakeholders will be involved.

We refer you to learn more about Blockchain payments for everyone by Liquidity.Network:

To learn more about the energy sharing communities by Hive Power go here:

Don’t forget to join our Telegram Channel: https://t.me/hivepower

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