16 sats \ 4 replies \ @petertodd 24 Feb 2023 \ on: Phoenix Wallet - any way to prevent creating new channels? bitcoin
The reason why that happened is because Phoenix doesn't allocate any excess capacity in your direction when the channel is opened. So each subsequent payment needs a new channel.
OTOH if you had made a payment from your wallet to someone else there would be capacity incoming, and you wouldn't have needed a new channel.
Phoenix could do this differently. But capacity costs money because it ties up BTC so I guess this is the trade-off they've chosen to make.
I really thought that 3k sat fee was only for the first channel and the fee went down after that.
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Nope. The 3k fee represents their actual cost per channel. They also take another 1% of the amount of the channel to fairly pay for the cost of the capital they have to tie up.
Personally I think all the fees are totally fair. If anything, it's hard to make money on those fees, as you're trying up a lot of capital with little return if people don't use their wallets frequently.
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Personally I think all the fees are totally fair.
Agreed. Only who doesn't run a LN node would say that Phoenix fees are high, because they do not know how much is the real cost to maintain a LN node liquidity.
The only thing that I find it weird / I don't have an explanation, is that they are not opening a bigger channel. At least a 40% more than what you deposit. I know that will be a bigger effort for them to put that liquidity, but could avoid too many open/close channels.
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The reason is pretty simple I think. They have to allocate fund for each new channel. They don't have unlimited bitcoin, so they cannot allocate 40% of each new channel. If they do that, their "LSP" will run out of bitcoin pretty fast I think, and no channel could be created.
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