Lee McCulloch and Alex Sharbena from the Stellar Development Foundation presented Starlight, a layer-2 payment channel protocol enabling millions of transactions per second off-chain while maintaining security through CAP-21 and CAP-40 protocol upgrades.
Starlight is a layer-2 payment channel protocol for Stellar that enables fast, off-chain payments between two parties without requiring trust. The protocol addresses Stellar's 1,000 operations per ledger limit by allowing high-throughput users to process payments off-chain while settling on-chain. The demo showed opening a channel, sending payments, and closing it, with participants achieving 1.2 million payments per second using payment buffering. Two core advancement proposals make this possible: CAP-21 introduces relative time locks and flexible sequence numbers for dispute resolution, while CAP-40 adds atomic signature disclosure to safely share signatures in single messages. The protocol requires minimal data storage, supports deposits at any time, and integrates with existing Stellar payment rails like anchors and wallets.
