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17 sats \ 16 replies \ @DarthCoin 8 Apr freebie \ parent \ on: Phoenix lightning wallet - questions on strategy for my use case lightning
No,
I am saying that you buy 1M sats inbound.
You receive 800k sats, so you remain with 200k inbound available.
Then you swap out to another onchain wallet let's say 700k sats.
So you will have 900k inbound available.
What you buy as inbound liquidity is a bucket. It is even represented like that.
You fill it with water, then you drink (spend) or pour it into a bigger bottle (swap out).
The bucket always remain 1M CAPACITY. Only the water (your sats) fluctuate, depending of your use.
The trick is to not swap out ALL your sats, just leave in that channel like 1-5% or even 10%.
If you swap out all sats, then the channel is closed so you will lose the bucket.
Sorry, I should have been clearer. Here's approximately what happened:
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bought 1,000,000 sats inbound liquidity
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received 800,000 sats
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sent out 800,000 sats on-chain, via SEND button in Phoenix
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but the inbound liquidity didn't recover to 1,000,000, like I thought it would.
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When you spend on-chain from Phoenix, it’s splicing out, which means it’s taking bitcoin out of your lightning channel and sending it on-chain. This will always reduce your channel size.
Basically, if you want to maintain at least the same channel size, you have to always send from Phoenix with lightning, and use other services to convert to on-chain.
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So, like @Scoresby suggested, perhaps transferring via Lightening using Boltz, then transferring off Boltz, on-chain.
This is starting to get quite complicated. And also expensive, all these transfers.
I know it's custodial, but using Wallet of Satoshi (with a VPN) seems like a reasonable option. And likely cheaper too.
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So, like @Scoresby suggested, perhaps transferring via Lightening using Boltz, then transferring off Boltz, on-chain.
I think that's where you're confused: It's not two transfers that require your interaction. A swap out is a single transaction as far as you can be concerned. You enter a bitcoin address and then you will be presented a lightning invoice. When you pay this lightning invoice, you will pay via lightning but you will receive sats into the onchain address you entered since they send a part of their sats that are already onchain to you.
I would recommend going to https://boltz.exchange/ and trying it out. You don't have to actually pay the lightning invoice at the end to see how the flow is.
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Okay, thanks, I will give it a try. Swap out - gotta start learning this stuff...
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Here you have a good SN post about submarine swaps
#163372
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I actually think for the mostly receive use case phoenix is great.
I guess it also depends a little on how big the transactions you receive generally are.
I sell posters and t-shirts and stuff, so not huge transactions.
For my case it is cheaper than wallet of satosji because they nailed me with fees every time I transferred out to my cold storage.
Also, I'm in the states and they shut off service pretty quickly here, so you never can count on it.
Phoenix with a big channel to start and boltz out yo your cold storage when fees are low works pretty well for me.
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This is a tricky situation. And don't quite know how Phoenix's purchase liquidity handles it.
When you set up a ln channel, you and your channel partner each commit a specific amount of btc to the channel. When you spend on the lightning network, you are changing the balance so that your channel partner has more of the funds and you have less. When you receive it's the opposite.
If you both put 500k sats in to start the channel, you can receive up to 500k sats before the channel stops making sense (you can't receive more than your channel partner has committed to the channel).
When you request liquidity from phoenix, they are adding more btc to the channel.
Now, if you transfer out of phoenix to an on chain address you aren't moving any btc back to phoenix's side of the channel. Your removing it from the channel altogether.
If you purchase 1million sats inbound liquidity, they add that much to their channel with you.
If you receive 800k sats you reduce that inbound liquidity to 200k.
If you transfer out of phoenix onchain it definitely won't rebalance the liquidity to phoenix's side.
The question is does it shrink the channel size so much that impinges on the remaining 200k inbound liquidity. I wouldn't expect it to.
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The channel never shrink if you leave a min % reserve in it.
The channel is closed if you move all sats from it.
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This is true for normal lightning.
But splicing makes it different, I think.
In phoenix I always only have one channel and it is between me and phoenix. Any onchain transaction i make affects the size of this channel.
If I make a transaction sending from my phoenix wallet to my on chain, it has to change the size of the channel, even if it is only a small percent that you send out.
If it doesn't change the channel size, where do the sats come from?
I have done exactly this multiple times, and it reduced my channel size by the amount I sent out.
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That's the thing, you are using internal swap.
Use external swap (sending a normal LN payment to the swap) and you will see that will not reduce the size. Is also cheaper using an external swap.
You mistake was that you moved the whole balance into onchain.
As I said, Phoenix is closing the channel if you do that.
So you every time paid new fees for opening a new one.
But is strange why did you received only 800k from 1M, this is huge difference.
Something must be wrong.
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That was just some example numbers, I left a substantial amount on Phoenix.
But I did move a chunk of it, on chain, in Phoenix, and not using the Boltz system that other posters mentioned like @ek and @Scoresby. The Boltz system appears to involve sending it to a bitcoin address via a lightening invoice. Seems complicated but I guess I'll try it. And there will be a fee as well. Ugh.
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Look at it this way: if you were receiving credit card payments, you'd be losing 3-5% on fees.
If your use case is lightning withdraws from an exchange or p2p trades, you could consider just sending directly to the boltz swap and skipping your on wallet altogether.
It really comes down to your use case.
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Wow, okay, so I need to learn more about this Boltz thing.
So if my main use case is receiving, then I could just create a lightning invoice in Boltz, give it a btc address, and then receive the sats to the btc address with a .5% fee from Boltz, and an on chain fee?
Maybe that's the way to go...
Though I guess you'd want to batch things up, so you don't pay too much in on chain (mining) fees.
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