Hi,

This is unclear on which criterias the endorsement decision is made
>

A node endorses an HTLC if and only if it came from a neighbour that has
reputation 1 that endorsed it.


> Additionally, this is unclear how the available liquidity/slots on a given
> outbound channel are initially distributed between all the inbound channels
> (e.g proportional to the capacity) and how they're balanced once the
> inbound channels start to accumulate reputation.
>

The quotas are for any incoming HTLC that is either from a neighbour with
reputation 0, or is not endorsed. For each channel, the quotas
are independent of other channels and independent of the neighbour that
forwarded the HTLC.



> I don't know if this local reputation scheme precises how reputation is
> slashed in case of HTLC failure, and if any "grace" amount/rate is granted
> to the inbound channel counterparty, e.g Alice.
>
> Independently of those considerations, I think this local reputation
> scheme might suffer from exploitable reputation asymmetries by a jamming
> adversary.
> Let's say you have the topology:
>
> Alice - Bob - Caroll - Dave
>
> Alice accumulated a reputation of 1 towards Bob and same for Bob towards
> Caroll. As `fee_base_msat` Bob picked up 1000 msat and Caroll picked up
> 2000 msat. If Alice forwards a HTLC to Bob and it is endorsed by him
> before relay to Caroll, Alice can now inflict a 50 sat damage to Caroll,
> while only encumbering the lower-priced reputational cost towards Bob.
>
> This concern could hold in case of asymmetries arising from the dynamic
> adjustment of routing fees during an evaluated period of time. E.g both Bob
> and Caroll requires routing fees of 1000 msat. Alice builds up a reputation
> of 1 towards Bob during this period N. At period N+1, Caroll bumps her
> routing fees to 2000 msat. From now on, Alice can exploit this asymmetry.
>

In general, if Bob is a low flow node (resulting in it having a low
threshold for reputation), he cannot have a high reputation with Carroll as
he will never forward enough. Taking into account the differences in fees
is interesting, but should be checked further.
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