diff --git a/lnwire/query_short_chan_ids.go b/lnwire/query_short_chan_ids.go
index 1f4c1d35..f9ff58b5 100644
--- a/lnwire/query_short_chan_ids.go
+++ b/lnwire/query_short_chan_ids.go
@@ -2,9 +2,11 @@ package lnwire
 
 import (
 	"bytes"
+	"compress/zlib"
 	"fmt"
 	"io"
 	"sort"
+	"sync"
 
 	"github.com/roasbeef/btcd/chaincfg/chainhash"
 )
@@ -20,8 +22,17 @@ const (
 	// encoded using the regular encoding, in a sorted order.
 	EncodingSortedPlain ShortChanIDEncoding = 0
 
-	// TODO(roasbeef): list max number of short chan id's that are able to
-	// use
+	// EncodingSortedZlib signals that the set of short channel ID's is
+	// encoded by first sorting the set of channel ID's, as then
+	// compressing them using zlib.
+	EncodingSortedZlib ShortChanIDEncoding = 1
+)
+
+const (
+	// maxZlibBufSize is the max number of bytes that we'll accept from a
+	// zlib decoding instance. We do this in order to limit the total
+	// amount of memory allocated during a decoding instance.
+	maxZlibBufSize = 67413630
 )
 
 // ErrUnknownShortChanIDEncoding is a parametrized error that indicates that we
@@ -144,6 +155,50 @@ func decodeShortChanIDs(r io.Reader) (ShortChanIDEncoding, []ShortChannelID, err
 
 		return encodingType, shortChanIDs, nil
 
+	// In this encoding, we'll use zlib to decode the compressed payload.
+	// However, we'll pay attention to ensure that we don't open our selves
+	// up to a memory exhaustion attack.
+	case EncodingSortedZlib:
+		// Before we start to decode, we'll create a limit reader over
+		// the current reader. This will ensure that we can control how
+		// much memory we're allocating during the decoding process.
+		limitedDecompressor, err := zlib.NewReader(&io.LimitedReader{
+			R: bytes.NewReader(queryBody),
+			N: maxZlibBufSize,
+		})
+		if err != nil {
+			return 0, nil, fmt.Errorf("unable to create zlib reader: %v", err)
+		}
+
+		var shortChanIDs []ShortChannelID
+		for {
+			// We'll now attempt to read the next short channel ID
+			// encoded in the payload.
+			var cid ShortChannelID
+			err := readElements(limitedDecompressor, &cid)
+
+			switch {
+			// If we get an EOF error, then that either means we've
+			// read all that's contained in the buffer, or have hit
+			// our limit on the number of bytes we'll read. In
+			// either case, we'll return what we have so far.
+			case err == io.ErrUnexpectedEOF || err == io.EOF:
+				return encodingType, shortChanIDs, nil
+
+			// Otherwise, we hit some other sort of error, possibly
+			// an invalid payload, so we'll exit early with the
+			// error.
+			case err != nil:
+				return 0, nil, fmt.Errorf("unable to "+
+					"deflate next short chan "+
+					"ID: %v", err)
+			}
+
+			// We successfully read the next ID, so well collect
+			// that in the set of final ID's to return.
+			shortChanIDs = append(shortChanIDs, cid)
+		}
+
 	default:
 		// If we've been sent an encoding type that we don't know of,
 		// then we'll return a parsing error as we can't continue if
@@ -173,6 +228,13 @@ func (q *QueryShortChanIDs) Encode(w io.Writer, pver uint32) error {
 func encodeShortChanIDs(w io.Writer, encodingType ShortChanIDEncoding,
 	shortChanIDs []ShortChannelID) error {
 
+	// For both of the current encoding types, the channel ID's are to be
+	// sorted in place, so we'll do that now.
+	sort.Slice(shortChanIDs, func(i, j int) bool {
+		return shortChanIDs[i].ToUint64() <
+			shortChanIDs[j].ToUint64()
+	})
+
 	switch encodingType {
 
 	// In this encoding, we'll simply write a sorted array of encoded short
@@ -192,13 +254,6 @@ func encodeShortChanIDs(w io.Writer, encodingType ShortChanIDEncoding,
 			return err
 		}
 
-		// Next, we'll ensure that the set of short channel ID's is
-		// properly sorted in place.
-		sort.Slice(shortChanIDs, func(i, j int) bool {
-			return shortChanIDs[i].ToUint64() <
-				shortChanIDs[j].ToUint64()
-		})
-
 		// Now that we know they're sorted, we can write out each short
 		// channel ID to the buffer.
 		for _, chanID := range shortChanIDs {
@@ -210,6 +265,54 @@ func encodeShortChanIDs(w io.Writer, encodingType ShortChanIDEncoding,
 
 		return nil
 
+	// For this encoding we'll first write out a serialized version of all
+	// the channel ID's into a buffer, then zlib encode that. The final
+	// payload is what we'll write out to the passed io.Writer.
+	//
+	// TODO(roasbeef): assumes the caller knows the proper chunk size to
+	// pass to avoid bin-packing here
+	case EncodingSortedZlib:
+		// We'll make a new buffer, then wrap that with a zlib writer
+		// so we can write directly to the buffer and encode in a
+		// streaming manner.
+		var buf bytes.Buffer
+		zlibWriter := zlib.NewWriter(&buf)
+
+		// Next, we'll write out all the channel ID's directly into the
+		// zlib writer, which will do compressing on the fly.
+		for _, chanID := range shortChanIDs {
+			err := writeElements(zlibWriter, chanID)
+			if err != nil {
+				return fmt.Errorf("unable to write short chan "+
+					"ID: %v", err)
+			}
+		}
+
+		// Now that we've written all the elements, we'll ensure the
+		// compressed stream is written to the underlying buffer.
+		if err := zlibWriter.Close(); err != nil {
+			return fmt.Errorf("unable to finalize "+
+				"compression: %v", err)
+		}
+
+		// Now that we have all the items compressed, we can compute
+		// what the total payload size will be. We add one to account
+		// for the byte to encode the type.
+		compressedPayload := buf.Bytes()
+		numBytesBody := len(compressedPayload) + 1
+
+		// Finally, we can write out the number of bytes, the
+		// compression type, and finally the buffer itself.
+		if err := writeElements(w, uint16(numBytesBody)); err != nil {
+			return err
+		}
+		if err := writeElements(w, encodingType); err != nil {
+			return err
+		}
+
+		_, err := w.Write(compressedPayload)
+		return err
+
 	default:
 		// If we're trying to encode with an encoding type that we
 		// don't know of, then we'll return a parsing error as we can't