Hi! ACINQ/Phoenix dev here.

The general idea is that Phoenix is geared toward use cases that make the most economical sense, as a self-custodial Lightning wallet. It is true that with v2 we have so far made little effort to accomodate use cases that we are not convinced are sustainable at scale. The reason is that there is a very fine line between "doing our best to allow everyone to play" and "actively incentivizing unsustainable usage". This is not at all to say things are frozen the way they are today, it just explains our approach and the order in which we are doing things.

What makes the most economical sense: loading Phoenix from time to time with large (compared to mining fees) amounts, and then spend anytime with any amount. It scales and incentives are aligned for everyone. This is the so-called "Visa use case", except that Phoenix/Lightning arguably does it already better (faster, cheaper, and more privately) than Visa -- a widely underappreciated fact, in our opinion.

Person-to-person micropayments are much more challenging to do in an economically scalable way. What you see as your inbound liquidity is in fact our balance. It is easy to foresee the potential issues when you scale to 1M users. Our starting point was to not take any fee on receive, and not provide any additional liquidity. This causes mining fees to deincentivize receiving tiny payments, which is what you are running into here. We are actively discussing that and already received interesting feedback on various options. Again we're not judging what should or should not be done in principle, just what service we can deliver reliably and sustainably at scale.

Lightning is only cheaper than on-chain, big difference (and also: instant and more private).

So I mean I wish Pheonix guys were here to explain themselves but if you go to settings (the gear icon next to receive) and scroll down to "Payment channels" you can see what your inbound and outbound liquidity is. So if you didn't have the required inbound liquidity then it would have to do an on-chain tx to increase capacity.

Other than that you'd have to troubleshoot with me. Remember you can't send an LN transaction to an on-chain address and you can't send an on-chain transaction to an LN invoice.

Thanks all especially @ekzyis for reaching out to them. I could use a service and buy inbound liq right? Like amboss or LN+ inbound liq? Would that work? Could be great to offfer a way to buy in inbound directly inside of Phoenix. Because it can not be the solution to from now on for every LN I want to receive having to pay multiple thousand for on chain TX to increase the chan. I always liked phoenix for the simplicity and the custodianship but that would not be bearable

I thought I was the only one wondering about this. I saw their transaction fees breakdown after creating the wallet. I just have to abandon it because it's not ideal for my sats stacking.

Cureently they only splice in what's needed for the payment. This means one way channels can be expensive. They're discussing having additional liquidity added each splice to avoid this but that also adds costs on their end.

Same issue. I don't really understand why but sometimes bigger lighting transactions cost so so much. More than an on chain transaction. By the way how anonymous to use lightning ?

Isn't the fee more like 500ppm? Have you thought about how much capital you would need to achieve the same connectivity on your “Raspi”? It's something like 50 channels with a capacity of at least 1 million each, the bigger the better tbh. Now this hotwallet runs on a gimpy $250 hardware.(add that to your ppm) Channel.db sucks, watchtowers suck and you need to run a yolo stack of “liquidity management” software. Connect to your node via Tailscale/Zerotier because Tor also sucks.

Have you considered all of this? There are some fee cap options in Phoenix that are far from perfect, but for now I'm okay with it.

Just run your own node

I was a big user of Phoenix, but lately the 0.5% fixed fee to send on Lightning is causing me to stop using them. It makes sense for those that do not open a large channel, but something that typically cost 20-30 sats in fees ended up costing me 4000 sats in fees with the new system. I'm thinking about closing my channels and moving them to my embedded Zeus node.

Just tested mutiny wallet to WoS and the fees were 3/10,000, or 0.03 %

;-)

My fees are zero on WoS. Strike also has low fees (Also the fees are zero if sent to another strike user). But fully KYC.

I think that sounds like an onchain TX

Try their support email, phoenix@acinq.co. They're responsive.