When I ran a routing node a few years ago, the consensus was that you shouldn't open a channel below 2 million sats. The price of Bitcoin was $16K so that was $320 of liquidity. Now I'm being told that despite the price being 7 times greater than when I previously ran a node, that any channel under 3 million sats is "worthless for routing pairs." Well, 2 million sats is now $2200 of liquidity, so how does that make sense? I'm still routing sats every day in these 2 million sat channels, so I'm just not too confident in this 3 million sats guidance. What do you guys think?
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166 sats \ 1 reply \ @justin_shocknet 23 Oct
There's no perfect amount, its all contextual.
Things to consider are:
ROI, if you're incurring chain costs to open the channel then that cost is more spread out the bigger the channel is.
Fee environments are a factor here too, earlier on in Lightning 1 or even sub-sat fees were not the norm.
Purchasing power has grown vs fiat, but also the average size of payments on Lightning have increased too, depending who's data you base that on.
If you're getting the channel from an LSP, you're paying to lease that capacity, so over-sizing it vs. your needs is a waste. If you're funding it yourself and initializing the open, bigger is better per point 1 but worse per point 5 below:
Lightning is inherently a hot wallet so there's added risk vs. cold storage, putting more in than you can take advantage of is tempting fate.
You should not expect an ROI, you may get some routing fees back over time to help with cost, but Lightning isn't a yield farm. Fees simply make the network function and are meant to offset your fees incurred. Unless you are offering a service as a business on Lightning that has its own network effect of customers to drive routing your goal should be to break even whilest getting the benefits of instant payments and relatively free small payments that aren't practical on-chain.
If you're a merchant, you probably want channels as a multiple of your revenue over a period of time, say monthly or quarterly so that all the smaller payments you receive can be consolidated once in a re-balance/swap.
If you're a spender, do the inverse.
If you want to actually earn money just on routing, you need patronage network effect where you're earning fees off other peoples liquidity because they open channels to you. Some nodes have done this purely on routing alone by bootstrapping network effect with large sums or simply being around and reliable for a long time, but that's the exception.
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17 sats \ 0 replies \ @NEEDcreations OP 23 Oct
This is an awesome and highly informative response! Thank you! One day I'll be big enough to be able to sell inbound liquidity. I think that's when I'll be able to profit. But for now, breaking even would be great!
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0 sats \ 2 replies \ @DarthCoin 23 Oct
You didn't mention the magic words: PRIVATE or PUBLIC node/channels?
Is a big difference that seems you didn't get it.
One thing is to route payments with a 3+M sats public channel and another thing is to make payments with a lower than 3M sats private channel.
Why the min 3M limit? Because all routing scores will look into that and will advise the others the better routes with 3+M sats channels. Just look into what LNrouter says.
And if you still think in fiat terms, you are totally lost.
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21 sats \ 1 reply \ @DarthCoin 23 Oct
Analyze your node with this tool https://lnrouter.app and see what is saying.
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0 sats \ 0 replies \ @NEEDcreations OP 23 Oct
will do, thanks
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0 sats \ 5 replies \ @d01abcb3eb 23 Oct
So, what I'd look at is the cost of opening and closing the channel, and contrast that to what fees you think you can set. The more you fund the channel you open with the less fees you can charge while aiming to break even. If your channel isn't used a lot, your channel may be closed as soon as your remote has a large enough amount of sats on their side that they judge could be used better (unless you have some agreement). So, you might perhaps estimate that only half of your liquidity will be pushed out.
Fiat price has not much to do with anything here. That only comes into play when you want incoming liquidity for receiving payments for something you sell.
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0 sats \ 4 replies \ @NEEDcreations OP 23 Oct
with a higher fiat price, you have the potential to route many more transactions of all sizes and earn more fees. How is that not relevant?
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33 sats \ 3 replies \ @d01abcb3eb 23 Oct
From the perspective of the ROI (fees) of the funds allocated to the channel size and its life cycle its not relevant. Everything is measured it sats. The transaction count only matters if you have a significant base fee set...
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0 sats \ 0 replies \ @beyond_turbulence 23 Oct
Thanks : https://beyondturbulence.blogspot.com/2025/10/roi-redux.html?m=1
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0 sats \ 1 reply \ @NEEDcreations OP 23 Oct
At $10K Bitcoin, if I have a 1M sat channel I can route 10 $10 txs and earn fees on those 10 txs.
At $100K Bitcoin, if I have a 1M sat channel I can route 100 $10 txns and earn fees on those 100 txns.
So, in this example I'd earn 10x more in fees when Bitcoin is 10x the price.
What am I not understanding?
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0 sats \ 0 replies \ @d01abcb3eb 23 Oct
1 sat = 1 sat! :D
The fees are in ppm.
So, for an 1M channel you get (1e6 * f_ppm + n * f_base) in fees (ish - excluding reserves etc.), regardless of the fiat price of bitcoin (n is the tx count). If f_base is zero then the count of transactions doesn't matter unless you're on an edge and can do rounding to your benefit. So, you earn more in fiat terms but not in sat terms.
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0 sats \ 2 replies \ @88b0c423eb 23 Oct
The bigger the better for routing of course, as currently most use is probably on exchanges using LN and things like robosats and etc. But then the use on small communities bars cafés and restaurants grow there will much tons of small txs passing through.
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0 sats \ 1 reply \ @DarthCoin 23 Oct
2M sats is like what? 100 coffees of 2000 sats? Except channel reserves, anchors, buffers etc
That means if you open a channel with a coffee shop for just 100 payments routed, how much you could get in routing fees? less than 100 sats if you are lucky and ALL txs are routed through your shity Tor node.
What about if somebody wants to make a swap of 1M sats and get in the route your shity node? You will fail to route that tx because of liquidity.
There are a lot of economics in running a routing node, but noobs are really ignoring them.
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0 sats \ 0 replies \ @88b0c423eb 23 Oct
It's quite simple, if the OP is satisfied with the fees he gets from his channels than good for him, if small for the coffee shop then the coffee shop will open with nodes with bigger channels, supply and demand. If someone has a shitty tor node, then your node on clearnet will route more, good for you.
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