A connector that fails to pass on the fulfillment loses the money for that packet. That's the main connector risk in chained hashlock payments. Importantly, it's only the node that failed that loses the money, and there are many ways to mitigate this risk:  https://interledger.org/rfcs/0018-connector-risk-mitigations/  ...Once the Prepare packet has expired, there's no way to recover it. A big advantage of packetizing value is that each packet is worth a small amount. I would treat a single packet loss as cost of doing business and just try to prevent it from happening again. You can either try to account for every penny, which is a slower and more expensive process, or focus on speed and throughput. Banks today are focused on the former. In the long run I think connectors with good enough processes and super low latency + high throughput will win out.