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42 sats \ 6 replies \ @didiplaywell 25 Jul \ on: How does Muun even make money? lightning
I think they run their own node. It's possible that they have a deal with a company like Kraken to subsidize withdrawals. For instance withdrawals from Muun to Belo are free, for Belo subsidizes those withdrawals.
But I checked the blockchain and the 4 transactions are there on L1!
It's far more logical that Muun payed for them: Kraken would not want to encourage this convoluted usecase which allows me to avoid paying them the current 0.0002btc (13usd) L1 withdrawal fee.
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It makes sense. Maybe their scheme is to make money on withdrawals only (as many platforms do). I do know they run a node, they have to collect through it in some form or another. They might use the pool of funds to provide liquidity to LN too, since while your transactions are on L1, the submarine swap scheme means that equivalent funds were traded on LN.
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I can say that they make 0 money if you withdraw from them on L1 (I checked on the blockchain and my entire fee went to the miner). So I would assume that they only make money if you withdraw from them on L2 but they lose money on users like me.
So they only win when someone uses it send L2 payments. But since it's not a real Lightning wallet I feel like this would not be a good choice anyway: just use a real L2 wallet instead of paying high L1-like fees! So I don't see how their business model would work long-term...
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For instance, they have acknowledged publicly that the use of submarine swaps was never a long-term strategy. But regarding the "real L2 wallet" part, which is true, they made other conscious trade-offs which I myself, as any other Muun user, consider appropriate, which is in regard to safety and flexibility, since it's a pleasure to freely come and go from L2 to L1, and fees are not always that high, and transactions are always instant. Will see how they adapt, but for now it's a really useful wallet as is
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Interesting, thanks! Yes I'm loving the wallet right now, which is normal since I'm literally being a parasite to them with my specific use case 😄
Maybe they could somehow combine the "real L2" missing part with the existing submarine swap features which are awesome. That could help them be sustainably profitable as I suspect Phoenix is right now
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I'm sure they are on it!
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