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A lot of Lightning liquidity troubles disappear once the Lightning economy becomes circular, but you cannot get there unless you demonstrate high payment reliability, which requires that Lightning fix its liquidity troubles some other way first. Fortunately forwardable peerswaps forces the Lightning economy to be circular by just trading 1 BTC (onchain) = 1 BTC (offchain). Once we become truly circular we will stop needing it, but any liquidity pressure can be relieved by forwardable peerswaps.

LSPS0 uses JSON because binary encodings are just prebuilt dictionary compression algorithms for human-readable text. Yes, on the wire it is encrypted and unreadable, but I imagine that developers would appreciate logging the raw JSON to and from the peer, while debugging their first LSPS implementations. Fast human developers (while still ensuring you do not go so fast as to break things) trumps any elegance arguments here.