diff --git a/fundingmanager.go b/fundingmanager.go
index 0cbc5912..b8a0aa21 100644
--- a/fundingmanager.go
+++ b/fundingmanager.go
@@ -1,14 +1,16 @@
 package main
 
 import (
+	"bytes"
+	"encoding/hex"
 	"sync"
 	"sync/atomic"
+	"time"
 
 	"github.com/go-errors/errors"
 	"github.com/lightningnetwork/lnd/lnrpc"
 	"github.com/lightningnetwork/lnd/lnwallet"
 	"github.com/lightningnetwork/lnd/lnwire"
-	"github.com/lightningnetwork/lnd/routing/rt/graph"
 	"github.com/roasbeef/btcd/btcec"
 	"github.com/roasbeef/btcd/txscript"
 	"github.com/roasbeef/btcd/wire"
@@ -135,6 +137,8 @@ type fundingManager struct {
 	// requests from a local sub-system within the daemon.
 	fundingRequests chan *initFundingMsg
 
+	fakeProof *channelProof
+
 	quit chan struct{}
 	wg   sync.WaitGroup
 }
@@ -142,10 +146,23 @@ type fundingManager struct {
 // newFundingManager creates and initializes a new instance of the
 // fundingManager.
 func newFundingManager(w *lnwallet.LightningWallet, b *breachArbiter) *fundingManager {
+	// TODO(roasbeef): remove once we actually sign the funding_locked
+	// stuffs
+	s := "30450221008ce2bc69281ce27da07e6683571319d18e949ddfa2965fb6caa" +
+		"1bf0314f882d70220299105481d63e0f4bc2a88121167221b6700d72a0e" +
+		"ad154c03be696a292d24ae"
+	fakeSigHex, _ := hex.DecodeString(s)
+	fakeSig, _ := btcec.ParseSignature(fakeSigHex, btcec.S256())
+
 	return &fundingManager{
 		wallet:        w,
 		breachAribter: b,
 
+		fakeProof: &channelProof{
+			nodeSig:    fakeSig,
+			bitcoinSig: fakeSig,
+		},
+
 		activeReservations: make(map[int32]pendingChannels),
 		fundingMsgs:        make(chan interface{}, msgBufferSize),
 		fundingRequests:    make(chan *initFundingMsg, msgBufferSize),
@@ -179,7 +196,6 @@ func (f *fundingManager) Stop() error {
 	fndgLog.Infof("Funding manager shutting down")
 
 	close(f.quit)
-
 	f.wg.Wait()
 
 	return nil
@@ -229,7 +245,8 @@ func (f *fundingManager) PendingChannels() []*pendingChannel {
 //
 // NOTE: This MUST be run as a goroutine.
 func (f *fundingManager) reservationCoordinator() {
-out:
+	defer f.wg.Done()
+
 	for {
 		select {
 		case msg := <-f.fundingMsgs:
@@ -257,11 +274,9 @@ out:
 				f.handlePendingChannels(msg)
 			}
 		case <-f.quit:
-			break out
+			return
 		}
 	}
-
-	f.wg.Done()
 }
 
 // handleNumPending handles a request for the total number of pending channels.
@@ -561,11 +576,109 @@ func (f *fundingManager) processFundingSignComplete(msg *lnwire.SingleFundingSig
 	f.fundingMsgs <- &fundingSignCompleteMsg{msg, peer}
 }
 
+// channelProof is one half of the proof necessary to create an authenticated
+// announcement on the network. The two signatures individually sign a
+// statement of the existence of a channel.
+type channelProof struct {
+	nodeSig    *btcec.Signature
+	bitcoinSig *btcec.Signature
+}
+
+// chanAnnouncement encapsulates the two authenticated announcements that we
+// send out to the network after a new channel has been created locally.
+type chanAnnouncement struct {
+	chanAnn    *lnwire.ChannelAnnouncement
+	edgeUpdate *lnwire.ChannelUpdateAnnouncement
+}
+
+// newChanAnnouncement creates the authenticated channel announcement messages
+// required to broadcast a newly created channel to the network. The
+// announcement is two part: the first part authenticates the existence of the
+// channel and contains four signatures binding the funding pub keys and
+// identity pub keys of both parties to the channel, and the second segment is
+// authenticated only by us an contains our directional routing policy for the
+// channel.
+func newChanAnnouncement(localIdentity *btcec.PublicKey,
+	channel *lnwallet.LightningChannel, chanID lnwire.ChannelID,
+	localProof, remoteProof *channelProof) *chanAnnouncement {
+
+	// First obtain the remote party's identity public key, this will be
+	// used to determine the order of the keys and signatures in the
+	// channel announcement.
+	chanInfo := channel.StateSnapshot()
+	remotePub := chanInfo.RemoteIdentity
+	localPub := localIdentity
+
+	// The unconditional section of the announcement is the ChannelID
+	// itself which compactly encodes the location of the funding output
+	// within the blockchain.
+	chanAnn := &lnwire.ChannelAnnouncement{
+		ChannelID: chanID,
+	}
+
+	// The chanFlags field indicates which directed edge of the channel is
+	// being updated within the ChannelUpdateAnnouncement announcement
+	// below. A value of zero means it's the edge of the "first" node and 1
+	// being the other node.
+	var chanFlags uint16
+
+	// The lexicographical ordering of the two identity public keys of the
+	// nodes indicates which of the nodes is "first". If our serialized
+	// identity key is lower than theirs then we're the "first" node and
+	// second otherwise.
+	selfBytes := localIdentity.SerializeCompressed()
+	remoteBytes := remotePub.SerializeCompressed()
+	if bytes.Compare(selfBytes, remoteBytes) == -1 {
+		chanAnn.FirstNodeID = localPub
+		chanAnn.SecondNodeID = &remotePub
+		chanAnn.FirstNodeSig = localProof.nodeSig
+		chanAnn.SecondNodeSig = remoteProof.nodeSig
+		chanAnn.FirstBitcoinSig = localProof.nodeSig
+		chanAnn.SecondBitcoinSig = remoteProof.nodeSig
+		chanAnn.FirstBitcoinKey = channel.LocalFundingKey
+		chanAnn.SecondBitcoinKey = channel.RemoteFundingKey
+
+		// If we're the first node then update the chanFlags to
+		// indicate the "direction" of the update.
+		chanFlags = 0
+	} else {
+		chanAnn.FirstNodeID = &remotePub
+		chanAnn.SecondNodeID = localPub
+		chanAnn.FirstNodeSig = remoteProof.nodeSig
+		chanAnn.SecondNodeSig = localProof.nodeSig
+		chanAnn.FirstBitcoinSig = remoteProof.nodeSig
+		chanAnn.SecondBitcoinSig = localProof.nodeSig
+		chanAnn.FirstBitcoinKey = channel.RemoteFundingKey
+		chanAnn.SecondBitcoinKey = channel.LocalFundingKey
+
+		// If we're the second node then update the chanFlags to
+		// indicate the "direction" of the update.
+		chanFlags = 1
+	}
+
+	// TODO(roasbeef): add real sig, populate proper FeeSchema
+	chanUpdateAnn := &lnwire.ChannelUpdateAnnouncement{
+		Signature:                 localProof.nodeSig,
+		ChannelID:                 chanID,
+		Timestamp:                 uint32(time.Now().Unix()),
+		Flags:                     chanFlags,
+		Expiry:                    1,
+		HtlcMinimumMstat:          0,
+		FeeBaseMstat:              0,
+		FeeProportionalMillionths: 0,
+	}
+
+	return &chanAnnouncement{
+		chanAnn:    chanAnn,
+		edgeUpdate: chanUpdateAnn,
+	}
+}
+
 // handleFundingSignComplete processes the final message received in a single
 // funder workflow. Once this message is processed, the funding transaction is
 // broadcast. Once the funding transaction reaches a sufficient number of
-// confirmations, a message is sent to the responding peer along with an SPV
-// proofs of transaction inclusion.
+// confirmations, a message is sent to the responding peer along with a compact
+// encoding of the location of the channel within the block chain.
 func (f *fundingManager) handleFundingSignComplete(fmsg *fundingSignCompleteMsg) {
 	chanID := fmsg.msg.ChannelID
 	peerID := fmsg.peer.id
@@ -609,73 +722,88 @@ func (f *fundingManager) handleFundingSignComplete(fmsg *fundingSignCompleteMsg)
 	// once it reaches a sufficient number of confirmations.
 	// TODO(roasbeef): semaphore to limit active chan open goroutines
 	go func() {
-		select {
 		// TODO(roasbeef): need to persist pending broadcast channels,
 		// send chan open proof during scan of blocks mined while down.
-		case openChan := <-resCtx.reservation.DispatchChan():
-			// This reservation is no longer pending as the funding
-			// transaction has been fully confirmed.
-			f.deleteReservationCtx(peerID, chanID)
+		openChan, confHeight, confBlockIndex := resCtx.reservation.DispatchChan()
+		// This reservation is no longer pending as the funding
+		// transaction has been fully confirmed.
+		f.deleteReservationCtx(peerID, chanID)
 
-			fndgLog.Infof("ChannelPoint(%v) with peerID(%v) is now active",
-				fundingPoint, peerID)
+		fndgLog.Infof("ChannelPoint(%v) with peerID(%v) is now active",
+			fundingPoint, peerID)
 
-			// Now that the channel is open, we need to notify a
-			// number of parties of this event.
+		// Now that the channel is open, we need to notify a number of
+		// parties of this event.
 
-			// First we send the newly opened channel to the source
-			// server peer.
-			fmsg.peer.newChannels <- openChan
+		// First we send the newly opened channel to the source server
+		// peer.
+		fmsg.peer.newChannels <- openChan
 
-			// Afterwards we send the breach arbiter the new
-			// channel so it can watch for attempts to breach the
-			// channel's contract by the remote party.
-			f.breachAribter.newContracts <- openChan
+		// Afterwards we send the breach arbiter the new channel so it
+		// can watch for attempts to breach the channel's contract by
+		// the remote party.
+		f.breachAribter.newContracts <- openChan
 
-			// Next, we queue a message to notify the remote peer
-			// that the channel is open. We additionally provide an
-			// SPV proof allowing them to verify the transaction
-			// inclusion.
-			// TODO(roasbeef): obtain SPV proof from sub-system.
-			//  * ChainNotifier constructs proof also?
-			spvProof := []byte("fake proof")
-			fundingOpen := lnwire.NewSingleFundingOpenProof(chanID, spvProof)
-			fmsg.peer.queueMsg(fundingOpen, nil)
+		// With the block height and the transaction index known, we
+		// can construct the compact chainID which is used on the
+		// network to unique identify channels.
+		chainID := lnwire.ChannelID{
+			BlockHeight: confHeight,
+			TxIndex:     confBlockIndex,
+			TxPosition:  uint16(fundingPoint.Index),
+		}
 
-			// Register the new link with the L3 routing manager
-			// so this new channel can be utilized during path
-			// finding.
-			chanInfo := openChan.StateSnapshot()
-			capacity := int64(chanInfo.LocalBalance + chanInfo.RemoteBalance)
-			pubSerialized := fmsg.peer.addr.IdentityKey.SerializeCompressed()
-			fmsg.peer.server.routingMgr.OpenChannel(
-				graph.NewVertex(pubSerialized),
-				graph.NewEdgeID(*fundingPoint),
-				&graph.ChannelInfo{
-					Cpt: capacity,
-				},
-			)
+		// Next, we queue a message to notify the remote peer that the
+		// channel is open. We additionally provide the compact
+		// channelID so they can advertise the channel.
+		fundingOpen := lnwire.NewSingleFundingOpenProof(chanID, chainID)
+		fmsg.peer.queueMsg(fundingOpen, nil)
 
-			// Finally give the caller a final update notifying
-			// them that the channel is now open.
-			// TODO(roasbeef): helper funcs for proto construction
-			resCtx.updates <- &lnrpc.OpenStatusUpdate{
-				Update: &lnrpc.OpenStatusUpdate_ChanOpen{
-					ChanOpen: &lnrpc.ChannelOpenUpdate{
-						ChannelPoint: &lnrpc.ChannelPoint{
-							FundingTxid: fundingPoint.Hash[:],
-							OutputIndex: fundingPoint.Index,
-						},
+		// Register the new link with the L3 routing manager so this
+		// new channel can be utilized during path
+		// finding.
+		// TODO(roasbeef): should include sigs from funding
+		// locked
+		//  * should be moved to after funding locked is recv'd
+		f.announceChannel(fmsg.peer.server, openChan, chainID, f.fakeProof,
+			f.fakeProof)
+
+		// Finally give the caller a final update notifying them that
+		// the channel is now open.
+		// TODO(roasbeef): helper funcs for proto construction
+		resCtx.updates <- &lnrpc.OpenStatusUpdate{
+			Update: &lnrpc.OpenStatusUpdate_ChanOpen{
+				ChanOpen: &lnrpc.ChannelOpenUpdate{
+					ChannelPoint: &lnrpc.ChannelPoint{
+						FundingTxid: fundingPoint.Hash[:],
+						OutputIndex: fundingPoint.Index,
 					},
 				},
-			}
-			return
-		case <-f.quit:
-			return
+			},
 		}
+		return
 	}()
 }
 
+// announceChannel announces a newly created channel to the rest of the network
+// by crafting the two authenticated announcement required for the peers on the
+// network to recognize the legitimacy of the channel. The crafted
+// announcements are then send to the channel router to handle broadcasting to
+// the network during its next trickle.
+func (f *fundingManager) announceChannel(s *server,
+	channel *lnwallet.LightningChannel, chanID lnwire.ChannelID,
+	localProof, remoteProof *channelProof) {
+
+	// TODO(roasbeef): need a Signer.SignMessage method to finalize
+	// advertisements
+	localIdentity := s.identityPriv.PubKey()
+	chanAnnouncement := newChanAnnouncement(localIdentity, channel,
+		chanID, localProof, remoteProof)
+
+	s.chanRouter.ProcessRoutingMessage(chanAnnouncement.chanAnn, localIdentity)
+	s.chanRouter.ProcessRoutingMessage(chanAnnouncement.edgeUpdate, localIdentity)
+}
+
 // processFundingOpenProof sends a message to the fundingManager allowing it
 // to process the final message recieved when the daemon is on the responding
 // side of a single funder channel workflow.
@@ -684,9 +812,7 @@ func (f *fundingManager) processFundingOpenProof(msg *lnwire.SingleFundingOpenPr
 }
 
 // handleFundingOpen processes the final message when the daemon is the
-// responder to a single funder channel workflow. The SPV proofs supplied by
-// the initiating node is verified, which if correct, marks the channel as open
-// to the source peer.
+// responder to a single funder channel workflow.
 func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	chanID := fmsg.msg.ChannelID
 	peerID := fmsg.peer.id
@@ -721,19 +847,15 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 		resCtx.reservation.FundingOutpoint, peerID)
 
 	// Notify the L3 routing manager of the newly active channel link.
-	capacity := int64(resCtx.reservation.OurContribution().FundingAmount +
-		resCtx.reservation.TheirContribution().FundingAmount)
-	vertex := fmsg.peer.addr.IdentityKey.SerializeCompressed()
-	fmsg.peer.server.routingMgr.OpenChannel(
-		graph.NewVertex(vertex),
-		graph.NewEdgeID(*resCtx.reservation.FundingOutpoint()),
-		&graph.ChannelInfo{
-			Cpt: capacity,
-		},
-	)
+	// TODO(roasbeef): should have sigs, only after funding_locked is
+	// recv'd
+	//  * also ensure fault tolerance, scan opened chan on start up check
+	//  for graph existence
+	f.announceChannel(fmsg.peer.server, openChan, fmsg.msg.ChanChainID,
+		f.fakeProof, f.fakeProof)
 
 	// Send the newly opened channel to the breach arbiter to it can watch
-	// for uncopperative channel breaches, potentially punishing the
+	// for uncooperative channel breaches, potentially punishing the
 	// counter-party for attempting to cheat us.
 	f.breachAribter.newContracts <- openChan
 
diff --git a/htlcswitch.go b/htlcswitch.go
index 067deb97..18807005 100644
--- a/htlcswitch.go
+++ b/htlcswitch.go
@@ -13,8 +13,6 @@ import (
 	"github.com/lightningnetwork/lnd/channeldb"
 	"github.com/lightningnetwork/lnd/lnrpc"
 	"github.com/lightningnetwork/lnd/lnwire"
-	"github.com/lightningnetwork/lnd/routing"
-	"github.com/lightningnetwork/lnd/routing/rt/graph"
 	"github.com/roasbeef/btcd/btcec"
 	"github.com/roasbeef/btcd/wire"
 	"github.com/roasbeef/btcutil"
@@ -98,7 +96,7 @@ type paymentCircuit struct {
 	settle *link
 }
 
-// HtlcSwitch is a central messaging bus for all incoming/outgoing HTLC's.
+// htlcSwitch is a central messaging bus for all incoming/outgoing HTLC's.
 // Connected peers with active channels are treated as named interfaces which
 // refer to active channels as links. A link is the switche's message
 // communication point with the goroutine that manages an active channel. New
@@ -151,11 +149,6 @@ type htlcSwitch struct {
 	// fully locked in.
 	htlcPlex chan *htlcPacket
 
-	gateway []byte
-	router  *routing.RoutingManager
-
-	// TODO(roasbeef): messaging chan to/from upper layer (routing - L3)
-
 	// TODO(roasbeef): sampler to log sat/sec and tx/sec
 
 	wg   sync.WaitGroup
@@ -163,10 +156,8 @@ type htlcSwitch struct {
 }
 
 // newHtlcSwitch creates a new htlcSwitch.
-func newHtlcSwitch(gateway []byte, r *routing.RoutingManager) *htlcSwitch {
+func newHtlcSwitch() *htlcSwitch {
 	return &htlcSwitch{
-		router:           r,
-		gateway:          gateway,
 		chanIndex:        make(map[wire.OutPoint]*link),
 		interfaces:       make(map[wire.ShaHash][]*link),
 		onionIndex:       make(map[[ripemd160.Size]byte][]*link),
@@ -495,7 +486,6 @@ func (h *htlcSwitch) handleUnregisterLink(req *unregisterLinkMsg) {
 
 	// A request with a nil channel point indicates that all the current
 	// links for this channel should be cleared.
-	chansRemoved := make([]*wire.OutPoint, 0, len(links))
 	if req.chanPoint == nil {
 		hswcLog.Debugf("purging all active links for interface %v",
 			hex.EncodeToString(chanInterface[:]))
@@ -504,9 +494,8 @@ func (h *htlcSwitch) handleUnregisterLink(req *unregisterLinkMsg) {
 			h.chanIndexMtx.Lock()
 			delete(h.chanIndex, *link.chanPoint)
 			h.chanIndexMtx.Unlock()
-
-			chansRemoved = append(chansRemoved, link.chanPoint)
 		}
+
 		links = nil
 	} else {
 		h.chanIndexMtx.Lock()
@@ -516,8 +505,6 @@ func (h *htlcSwitch) handleUnregisterLink(req *unregisterLinkMsg) {
 		for i := 0; i < len(links); i++ {
 			chanLink := links[i]
 			if chanLink.chanPoint == req.chanPoint {
-				chansRemoved = append(chansRemoved, req.chanPoint)
-
 				// We perform an in-place delete by sliding
 				// every element down one, then slicing off the
 				// last element. Additionally, we update the
@@ -534,22 +521,6 @@ func (h *htlcSwitch) handleUnregisterLink(req *unregisterLinkMsg) {
 		}
 	}
 
-	// Purge the now inactive channels from the routing table.
-	// TODO(roasbeef): routing layer should only see the links as a
-	// summation of their capacity/etc
-	//  * distinction between connection close and channel close
-	for _, linkChan := range chansRemoved {
-		err := h.router.RemoveChannel(
-			graph.NewVertex(h.gateway),
-			graph.NewVertex(req.remoteID),
-			graph.NewEdgeID(*linkChan),
-		)
-		if err != nil {
-			hswcLog.Errorf("unable to remove channel from "+
-				"routing table: %v", err)
-		}
-	}
-
 	// TODO(roasbeef): clean up/modify onion links
 	//  * just have the interfaces index be keyed on hash160?
 
diff --git a/log.go b/log.go
index 86abafc9..f8a3e1a7 100644
--- a/log.go
+++ b/log.go
@@ -10,6 +10,7 @@ import (
 	"github.com/lightningnetwork/lnd/chainntnfs"
 	"github.com/lightningnetwork/lnd/channeldb"
 	"github.com/lightningnetwork/lnd/lnwallet"
+	"github.com/lightningnetwork/lnd/routing"
 )
 
 // Loggers per subsystem.  Note that backendLog is a seelog logger that all of
@@ -30,6 +31,7 @@ var (
 	utxnLog    = btclog.Disabled
 	brarLog    = btclog.Disabled
 	cmgrLog    = btclog.Disabled
+	crtrLog    = btclog.Disabled
 )
 
 // subsystemLoggers maps each subsystem identifier to its associated logger.
@@ -46,6 +48,7 @@ var subsystemLoggers = map[string]btclog.Logger{
 	"UTXN": utxnLog,
 	"BRAR": brarLog,
 	"CMGR": cmgrLog,
+	"CRTR": crtrLog,
 }
 
 // useLogger updates the logger references for subsystemID to logger.  Invalid
@@ -96,6 +99,10 @@ func useLogger(subsystemID string, logger btclog.Logger) {
 	case "CMGR":
 		cmgrLog = logger
 		connmgr.UseLogger(logger)
+
+	case "CRTR":
+		crtrLog = logger
+		routing.UseLogger(crtrLog)
 	}
 }
 
diff --git a/peer.go b/peer.go
index 2bce0a9b..f9f7ccb1 100644
--- a/peer.go
+++ b/peer.go
@@ -19,7 +19,6 @@ import (
 	"github.com/lightningnetwork/lnd/lnrpc"
 	"github.com/lightningnetwork/lnd/lnwallet"
 	"github.com/lightningnetwork/lnd/lnwire"
-	"github.com/lightningnetwork/lnd/routing/rt/graph"
 	"github.com/roasbeef/btcd/btcec"
 	"github.com/roasbeef/btcd/txscript"
 	"github.com/roasbeef/btcd/wire"
@@ -233,17 +232,7 @@ func (p *peer) loadActiveChannels(chans []*channeldb.OpenChannel) error {
 
 		peerLog.Infof("peerID(%v) loaded ChannelPoint(%v)", p.id, chanPoint)
 
-		// Notify the routing table of this newly loaded channel.
-		chanInfo := lnChan.StateSnapshot()
-		capacity := int64(chanInfo.LocalBalance + chanInfo.RemoteBalance)
-		pubSerialized := p.addr.IdentityKey.SerializeCompressed()
-		p.server.routingMgr.OpenChannel(
-			graph.NewVertex(pubSerialized),
-			graph.NewEdgeID(*chanInfo.ChannelPoint),
-			&graph.ChannelInfo{
-				Cpt: capacity,
-			},
-		)
+		// TODO(roasbeef): register active channel with breach observer
 
 		// Register this new channel link with the HTLC Switch. This is
 		// necessary to properly route multi-hop payments, and forward
@@ -379,7 +368,6 @@ out:
 		case *lnwire.Ping:
 			p.queueMsg(lnwire.NewPong(msg.Nonce), nil)
 
-		// TODO(roasbeef): consolidate into predicate (single vs dual)
 		case *lnwire.SingleFundingRequest:
 			p.server.fundingMgr.processFundingRequest(msg, p)
 		case *lnwire.SingleFundingResponse:
@@ -392,11 +380,10 @@ out:
 			p.server.fundingMgr.processFundingOpenProof(msg, p)
 		case *lnwire.CloseRequest:
 			p.remoteCloseChanReqs <- msg
-		// TODO(roasbeef): interface for htlc update msgs
-		//  * .(CommitmentUpdater)
 
 		case *lnwire.ErrorGeneric:
 			p.server.fundingMgr.processErrorGeneric(msg, p)
+
 		case *lnwire.HTLCAddRequest:
 			isChanUpdate = true
 			targetChan = msg.ChannelPoint
@@ -409,14 +396,13 @@ out:
 		case *lnwire.CommitSignature:
 			isChanUpdate = true
 			targetChan = msg.ChannelPoint
-		case *lnwire.NeighborAckMessage,
-			*lnwire.NeighborHelloMessage,
-			*lnwire.NeighborRstMessage,
-			*lnwire.NeighborUpdMessage:
 
-			// Convert to base routing message and set sender and receiver
-			vertex := p.addr.IdentityKey.SerializeCompressed()
-			p.server.routingMgr.ReceiveRoutingMessage(msg, graph.NewVertex(vertex))
+		case *lnwire.NodeAnnouncement,
+			*lnwire.ChannelAnnouncement,
+			*lnwire.ChannelUpdateAnnouncement:
+
+			p.server.chanRouter.ProcessRoutingMessage(msg,
+				p.addr.IdentityKey)
 		}
 
 		if isChanUpdate {
diff --git a/server.go b/server.go
index 2325cc00..fef7c75e 100644
--- a/server.go
+++ b/server.go
@@ -1,6 +1,8 @@
 package main
 
 import (
+	"encoding/hex"
+	"errors"
 	"fmt"
 	"net"
 	"sync"
@@ -20,7 +22,6 @@ import (
 	"github.com/roasbeef/btcutil"
 
 	"github.com/lightningnetwork/lnd/routing"
-	"github.com/lightningnetwork/lnd/routing/rt/graph"
 )
 
 // server is the main server of the Lightning Network Daemon. The server houses
@@ -57,7 +58,7 @@ type server struct {
 	invoices      *invoiceRegistry
 	breachArbiter *breachArbiter
 
-	routingMgr *routing.RoutingManager
+	chanRouter *routing.ChannelRouter
 
 	utxoNursery *utxoNursery
 
@@ -69,6 +70,9 @@ type server struct {
 	persistentConnReqs  map[string]*connmgr.ConnReq
 	pendingConnRequests map[string]*connectPeerMsg
 
+	broadcastRequests chan *broadcastReq
+	sendRequests      chan *sendReq
+
 	newPeers  chan *peer
 	donePeers chan *peer
 	queries   chan interface{}
@@ -105,6 +109,7 @@ func newServer(listenAddrs []string, notifier chainntnfs.ChainNotifier,
 
 		invoices:    newInvoiceRegistry(chanDB),
 		utxoNursery: newUtxoNursery(notifier, wallet),
+		htlcSwitch:  newHtlcSwitch(),
 
 		identityPriv: privKey,
 
@@ -122,6 +127,9 @@ func newServer(listenAddrs []string, notifier chainntnfs.ChainNotifier,
 		newPeers:  make(chan *peer, 10),
 		donePeers: make(chan *peer, 10),
 
+		broadcastRequests: make(chan *broadcastReq),
+		sendRequests:      make(chan *sendReq),
+
 		queries: make(chan interface{}),
 		quit:    make(chan struct{}),
 	}
@@ -136,47 +144,37 @@ func newServer(listenAddrs []string, notifier chainntnfs.ChainNotifier,
 			debugPre[:], debugHash[:])
 	}
 
-	s.utxoNursery = newUtxoNursery(notifier, wallet)
-
-	// Create a new routing manager with ourself as the sole node within
-	// the graph.
-	selfVertex := serializedPubKey
-	routingMgrConfig := &routing.RoutingConfig{}
-	routingMgrConfig.SendMessage = func(receiver [33]byte, msg lnwire.Message) error {
-		receiverID := graph.NewVertex(receiver[:])
-		if receiverID == graph.NilVertex {
-			peerLog.Critical("receiverID == graph.NilVertex")
-			return fmt.Errorf("receiverID == graph.NilVertex")
-		}
-
-		var targetPeer *peer
-		for _, peer := range s.peersByID { // TODO: threadsafe API
-			nodePub := peer.addr.IdentityKey.SerializeCompressed()
-			nodeVertex := graph.NewVertex(nodePub[:])
-
-			// We found the target
-			if receiverID == nodeVertex {
-				targetPeer = peer
-				break
-			}
-		}
-
-		if targetPeer != nil {
-			targetPeer.queueMsg(msg, nil)
-		} else {
-			srvrLog.Errorf("Can't find peer to send message %v",
-				receiverID)
-		}
-		return nil
+	// TODO(roasbeef): add --externalip flag?
+	selfAddr, ok := listeners[0].Addr().(*net.TCPAddr)
+	if !ok {
+		return nil, fmt.Errorf("default listener must be TCP")
 	}
-	s.routingMgr = routing.NewRoutingManager(graph.NewVertex(selfVertex), routingMgrConfig)
 
-	s.htlcSwitch = newHtlcSwitch(serializedPubKey, s.routingMgr)
+	chanGraph := chanDB.ChannelGraph()
+	self := &channeldb.LightningNode{
+		LastUpdate: time.Now(),
+		Address:    selfAddr,
+		PubKey:     privKey.PubKey(),
+		// TODO(roasbeef): make alias configurable
+		Alias: hex.EncodeToString(serializedPubKey[:10]),
+	}
+	if err := chanGraph.SetSourceNode(self); err != nil {
+		return nil, err
+	}
+
+	s.chanRouter, err = routing.New(routing.Config{
+		Graph:        chanGraph,
+		Chain:        bio,
+		Notifier:     notifier,
+		Broadcast:    s.broadcastMessage,
+		SendMessages: s.sendToPeer,
+	})
+	if err != nil {
+		return nil, err
+	}
 
 	s.rpcServer = newRpcServer(s)
-
 	s.breachArbiter = newBreachArbiter(wallet, chanDB, notifier, s.htlcSwitch)
-
 	s.fundingMgr = newFundingManager(wallet, s.breachArbiter)
 
 	// TODO(roasbeef): introduce closure and config system to decouple the
@@ -268,7 +266,9 @@ func (s *server) Start() error {
 	if err := s.breachArbiter.Start(); err != nil {
 		return err
 	}
-	s.routingMgr.Start()
+	if err := s.chanRouter.Start(); err != nil {
+		return err
+	}
 
 	s.wg.Add(1)
 	go s.queryHandler()
@@ -289,7 +289,7 @@ func (s *server) Stop() error {
 	s.chainNotifier.Stop()
 	s.rpcServer.Stop()
 	s.fundingMgr.Stop()
-	s.routingMgr.Stop()
+	s.chanRouter.Stop()
 	s.htlcSwitch.Stop()
 	s.utxoNursery.Stop()
 	s.breachArbiter.Stop()
@@ -308,6 +308,81 @@ func (s *server) WaitForShutdown() {
 	s.wg.Wait()
 }
 
+// broadcastReq is a message sent to the server by a related sub-system when it
+// wishes to broadcast one or more messages to all connected peers. Thi
+type broadcastReq struct {
+	ignore *btcec.PublicKey
+	msgs   []lnwire.Message
+
+	errChan chan error // MUST be buffered.
+}
+
+// broadcastMessage sends a request to the server to broadcast a set of
+// messages to all peers other than the one specified by the `skip` parameter.
+func (s *server) broadcastMessage(skip *btcec.PublicKey, msgs ...lnwire.Message) error {
+	errChan := make(chan error, 1)
+
+	msgsToSend := make([]lnwire.Message, 0, len(msgs))
+	msgsToSend = append(msgsToSend, msgs...)
+	broadcastReq := &broadcastReq{
+		ignore:  skip,
+		msgs:    msgsToSend,
+		errChan: errChan,
+	}
+
+	select {
+	case s.broadcastRequests <- broadcastReq:
+	case <-s.quit:
+		return errors.New("server shutting down")
+	}
+
+	select {
+	case err := <-errChan:
+		return err
+	case <-s.quit:
+		return errors.New("server shutting down")
+	}
+}
+
+// sendReq is  message sent to the server by a related sub-system which it
+// wishes to send a set of messages to a specified peer.
+type sendReq struct {
+	target *btcec.PublicKey
+	msgs   []lnwire.Message
+
+	errChan chan error
+}
+
+// sendToPeer send a message to the server telling it to send the specific set
+// of message to a particular peer. If the peer connect be found, then this
+// method will return a non-nil error.
+func (s *server) sendToPeer(target *btcec.PublicKey, msgs ...lnwire.Message) error {
+	errChan := make(chan error, 1)
+
+	msgsToSend := make([]lnwire.Message, 0, len(msgs))
+	msgsToSend = append(msgsToSend, msgs...)
+	sMsg := &sendReq{
+		target:  target,
+		msgs:    msgsToSend,
+		errChan: errChan,
+	}
+
+	select {
+	case s.sendRequests <- sMsg:
+	case <-s.quit:
+		return errors.New("server shutting down")
+	}
+
+	select {
+	case err := <-errChan:
+		return err
+	case <-s.quit:
+		return errors.New("server shutting down")
+	}
+
+	return nil
+}
+
 // peerConnected is a function that handles initialization a newly connected
 // peer by adding it to the server's global list of all active peers, and
 // starting all the goroutines the peer needs to function properly.
@@ -415,9 +490,6 @@ func (s *server) outboundPeerConnected(connReq *connmgr.ConnReq, conn net.Conn)
 // addPeer adds the passed peer to the server's global state of all active
 // peers.
 func (s *server) addPeer(p *peer) {
-	s.peersMtx.Lock()
-	defer s.peersMtx.Unlock()
-
 	if p == nil {
 		return
 	}
@@ -428,8 +500,19 @@ func (s *server) addPeer(p *peer) {
 		return
 	}
 
+	// Track the new peer in our indexes so we can quickly look it up either
+	// according to its public key, or it's peer ID.
+	// TODO(roasbeef): pipe all requests through to the
+	// queryHandler/peerManager
+	s.peersMtx.Lock()
 	s.peersByID[p.id] = p
 	s.peersByPub[string(p.addr.IdentityKey.SerializeCompressed())] = p
+	s.peersMtx.Unlock()
+
+	// Once the peer has been added to our indexes, send a message to the
+	// channel router so we can synchronize our view of the channel graph
+	// with this new peer.
+	s.chanRouter.SynchronizeNode(p.addr.IdentityKey)
 }
 
 // removePeer removes the passed peer from the server's state of all active
@@ -508,6 +591,54 @@ out:
 		case p := <-s.donePeers:
 			s.removePeer(p)
 
+		case bMsg := <-s.broadcastRequests:
+			ignore := bMsg.ignore
+
+			srvrLog.Debugf("Broadcasting %v messages", len(bMsg.msgs))
+
+			s.peersMtx.RLock()
+			for _, peer := range s.peersByPub {
+				if ignore != nil &&
+					peer.addr.IdentityKey.IsEqual(ignore) {
+
+					srvrLog.Debugf("Skipping %v in broadcast",
+						ignore.SerializeCompressed())
+
+					continue
+				}
+
+				for _, msg := range bMsg.msgs {
+					peer.queueMsg(msg, nil)
+				}
+			}
+			s.peersMtx.RUnlock()
+
+			bMsg.errChan <- nil
+		case sMsg := <-s.sendRequests:
+			// TODO(roasbeef): use [33]byte everywhere instead
+			//  * eliminate usage of mutexes, funnel all peer
+			//  mutation to this goroutine
+			target := sMsg.target.SerializeCompressed()
+
+			srvrLog.Debugf("Attempting to send msgs %v to: %x",
+				len(sMsg.msgs), target)
+
+			s.peersMtx.RLock()
+			targetPeer, ok := s.peersByPub[string(target)]
+			if !ok {
+				s.peersMtx.RUnlock()
+				srvrLog.Errorf("unable to send message to %x, "+
+					"peer not found", target)
+				sMsg.errChan <- errors.New("peer not found")
+				continue
+			}
+
+			for _, msg := range sMsg.msgs {
+				targetPeer.queueMsg(msg, nil)
+			}
+			s.peersMtx.RUnlock()
+
+			sMsg.errChan <- nil
 		case query := <-s.queries:
 			switch msg := query.(type) {
 			case *connectPeerMsg:
@@ -587,6 +718,9 @@ func (s *server) handleConnectPeer(msg *connectPeerMsg) {
 		Permanent: true,
 	})
 
+	// TODO(roasbeef): create goroutine to poll state so can report
+	// connection fails
+
 	// Finally, we store the original request keyed by the public key so we
 	// can dispatch the response to the RPC client once a connection has
 	// been initiated.