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Bitcoin Blended Fee Estimator

This project provides bitcoin fee estimates using a blend of mempool-based and history-based estimations. The initial use case is to provide onchain fee estimates to lnd, however it could easily be adapted/extended to be used by other applications.

Fee Estimates

This application combines data from multiple APIs to provide fee estimates for Bitcoin transactions:

  • Mempool API: This API is used to get mempool-based fee estimates for upcoming blocks. The application fetches the fastestFee, halfHourFee, hourFee, economyFee, and minimumFee from the Mempool API and uses these estimates to calculate the fee for upcoming blocks.

  • Esplora API: This API is used to get history-based fee estimates for further future blocks. The application fetches fee estimates from the Esplora API (which gets its data from bitcoind) and adds them to the fee estimates if they are lower than the lowest fee estimate from the Mempool API.

  • Bitcoin Core API: This API provides an alternative source for fee estimates for further future blocks. The application fetches fee estimates directly from bitcoind and adds them to the fee estimates. You can choose between economical and conservative estimates.

Fee estimates are multipled by a configurable multiplier (1 by default) to allow a more conservative or aggressive approach, and cached for a configurable amount of time (15 seconds by default).

API

This application exposes a single API endpoint at /v1/fee-estimates. This endpoint returns a JSON object with the following structure, which is compatible with lnd's feeurl setting:

{
  "current_block_height": 831800,
  "current_block_hash": "000000000000000000028ff0332953ffd90c7146938231f4f2008e5e47f78754",
  "fee_by_block_target": {
    "1": 16000,
    "3": 15000,
    "6": 14000,
    "7": 13012,
    "11": 12278,
    "25": 11969,
    "144": 11030,
    "432": 10599,
    "504": 10598
  }
}

Setup & Usage

  1. Clone this repository to your local machine.
  2. Install the necessary dependencies (bun install)
  3. Set the feeurl in your lnd configuration to point to the /v1/fee-estimates endpoint of this server.

For example:

[Application Options]

; Optional URL for external fee estimation. If no URL is specified, the method
; for fee estimation will depend on the chosen backend and network. Must be set
; for neutrino on mainnet.
; Default:
;   feeurl=
; Example:
;   feeurl=https://nodes.lightning.computer/fees/v1/btc-fee-estimates.json
feeurl = http://localhost:3000/v1/fee-estimates

Replace http://localhost:3000 with the address of your server.

Please ensure that your server is properly configured to allow connections from the machine where lnd is running. You may need to adjust your firewall settings or other security configurations to allow this.

In addition, you may need to adjust the settings of your Mempool or Esplora instance to allow API requests from this integration. Please refer to the respective documentation for more information on this.

Note: By default, this integration connects to the public API of mempool.space and blokstream.info. However, for better performance and reliability, it is recommended to run your own instances of Mempool and Esplora and configure this integration to connect to those.

Configuration Options

This project uses the config package for configuration. The default configuration options are stored in config/default.json and config/custom-environment-variables.json. You can override these options by creating a config/local.json file or environment specific configuration files.

Here are the available configuration options:

Application settings

Config Key Description Default Value Environment Variable
server.port The port on which the server runs 3000 PORT
server.baseUrl The base url port on which the server is accessible http://localhost:3000 BASE_URL
settings.logLevel The log level to use for the application debug LOGLEVEL
settings.timeout Timeout to use when fetching data (ms) 5000 TIMEOUT
settings.feeMultiplier The multiplier to apply to the fee estimates 1 FEE_MULTIPLIER
settings.feeMinimum The minimum fee (sat/vB) to use for fee estimates if we could not determine from a configured data source 2 FEE_MINIMUM
settings.maxHeightDelta The maximum acceptable difference between the block heights of the most current fee estimates. 3 MAX_HEIGHT_DELTA
cache.stdTTL The standard time to live in seconds for every generated cache element 15 CACHE_STD_TTL
cache.checkperiod The period in seconds, used for the automatic delete check interval 20 CACHE_CHECKPERIOD

Mempool settings

Config Key Description Default Value Environment Variable
mempool.baseUrl The base URL of the Mempool instance to connect to https://mempool.space MEMPOOL_BASE_URL
mempool.fallbacekBaseUrl The base URL of the Mempool instance to fallback to if the primary instance is unavailable - MEMPOOL_FALLBACK_BASE_URL
mempool.depth The number of blocks to use for mempool-based fee estimates 6 MEMPOOL_DEPTH

Esplora settings

Config Key Description Default Value Environment Variable
esplora.baseUrl The base URL of the Esplora API instance to connect to. Set to null to disable. https://blockstream.info ESPLORA_BASE_URL
esplora.fallbacekBaseUrl The base URL of the Esplora API instance to fallback to if the primary instance is unavailable - ESPLORA_FALLBACK_BASE_URL

Bitcoin Core settings

Config Key Description Default Value Environment Variable
bitcoind.baseUrl The base URL of the bitcoind instance to connect to. - BITCOIND_BASE_URL
bitcoind.username The username to use for authenticating with the bitcoind instance - BITCOIND_USERNAME
bitcoind.password The password to use for authenticating with the bitcoind instance - BITCOIND_PASSWORD
bitcoind.confTargets The block targets to use for history-based fee estimates [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 144, 288, 432, 504, 576, 720, 864, 1008] BITCOIND_CONF_TARGETS
bitcoind.estimateMode The estimate mode to use for fee estimates (ECONOMICAL or CONSERVATIVE) ECONOMICAL BITCOIND_ESTIMATE_MODE

Development

This project is a lightweight and performant javascript app, built using Bun and Hono.

Prerequisites

Running the Server

bun run dev

Docker

This project includes Docker support and an official Docker image is available. You can run the Docker image with the following command:

docker run -p 3000:3000 lnzap/bitcoin-blended-fee-estimator:latest

This command will pull the latest lnzap/bitcoin-blended-fee-estimator image from Docker Hub and run it. By default, the Docker image runs the server on port 3000.

Please ensure that Docker is installed and running on your machine before running these commands.

Docker Development

You can build a Docker image from the source and run it with the following scripts:

  • docker:build: Builds a Docker image of the project. You can run this script with bun run docker:build.
  • docker:run: Runs the Docker image. You can run this script with bun run docker:run.

For example, to build and run the Docker image, you can use the following commands:

bun run docker:build
bun run docker:run

Contributing

We welcome contributions to this project. Please feel free to open an issue or submit a pull request.

License

This project is licensed under the MIT License. See the LICENSE file for more details.