I woke up today to what appeared to be good news. Joseph Poon, a Lightning Network developer, Stephen Pair from BitPay, Christopher Jeffrey from Purse and Fedor Indutny, had published a seemingly interesting proposal.
In what appeared to be a compromise that may reluctantly get the support of both sides, they proposed both on-chain scaling and segwit activation through a mechanism called extension blocks. Importantly, it is all a soft-fork, but segwit’s 4:1 discount is removed, while on-chain capacity is increased.