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268 sats \ 0 replies \ @justin_shocknet 10 Mar \ on: Will splicing incentivize the funding of smaller private channels? lightning
Keep in mind that splicing benefits LSPs, particularly those shilling Mobile nodes, who often need to repurpose liquidity because mobile channels are a waste of capital.
Individual nodes have the alternative and classic route of simply opening a redundant channel, which itself has a number of benefits.
It will likely lead to smaller (more efficient) channels as LSPs can more easily ratchet underperforming ones down, but there's little economic rationale for individuals to open channels that are smaller than they would have otherwise with redundant channels.