It does not need an onchain channel
It is basically a custodial protocol that allows *proving* wrongdoing with a scheme similar to LN channels
The problem is that the service operator won’t trust any mint other than their own, if they can
Discussion
How is that any better than cashu, from a risk-of-rug point of view?
The cashu folks are working on a proof of liabilities scheme to work alongside the obvious proof of reserves that mints could run (link below) . I haven't studied that yet, but I should and it might solve those problems
https://gist.github.com/callebtc/ed5228d1d8cbaade0104db5d1cf63939
And it's not a problem if the service provider trusts only one mint. We just need one mint that is trusted by both parties, and the negotiation to find a trusted mint could be done automatically
The probability of a common mint approaches zero with more users and more service providers.
With each service wanting self-custody, the user would have to approve every mint for every service one by one.
PoL has been "coming" for a while now, and could have been implemented many times in the last 2.5 years it was proposed. I still have yet to see an implementation of it.
The problem with all of these systems in general is that they are inefficient after a few payments per day and unnecessarily complex to implement.
For a service, custodians are very hard to trust, and using Cashu or similar schemes have a lot of potential failure paths and edge cases that can be handled. And a service running their own mint would not want to offer withdrawals.
At that point, you may as well use a credit stored in a DB. There is a reason you see disposable account numbers everywhere and ecash based systems nowhere: It is pointless and a hassle for the average user and the service.
You can always create a new account number for each payment.
"A service running their own mint would not want to offer withdrawals"
Maybe, but then why would anyone use that service?
"PoL has been coming for a while now"
Maybe. But so have its alternatives 😃.
What's your alternative, that works today?
"inefficient after a few payments per day"
Where did that come from? The channel I'm working on allows dozens of payments to be made per second, where the recipient can immediately verify the signature and, assuming the receiver trusts the mint, they can unilaterally exit at any time. Even without this channel, I don't see how cashu can only do "a few payments per day"
If we accept some rug risk, cashu appears to be great at optimising other things (privacy, ease of use, and speed)
If you can point to an existing scalable solution that has zero rug risk, that is easier to use - and to develop for - than Lightning, then I'd like to see it
I love Ark, it does a lot of things very well, but the privacy isn't great there