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0 sats \ 10 replies \ @justin_shocknet 4h \ on: How viable is Zeus Wallet for self-custody swaps (embedded node)? lightning
It'll be cheaper, only ~500 sats total*, to send coin on chain to Zeus and then use that on-chain coin to initiate your own channel.
By sending to Zeus via lightning from the exchange you are buying a channel they initiate from their LSP, which has lease costs factored in. Also those JIT channels from the LSP are also trusted at first and can be a little flakey... best to just open your own channel since you're working with chain-scale amounts.
So for your purposes, build up an on-chain balance in Zeus that's a little greater than the max you plan to withdraw every month.
*LND is what powers Zeus and that has a 20k sat reserve for emergency channel closures. With that reserve plus the routing reserve you'll probably tie up an extra 25k, that is not a cost, its just illiquid. Channel ops are only a few hundred sats each under current fee climate.
I don't believe Zeus splices the channels smaller, LND doesn't support that. They will however close inactive channels that are tying up their liquidity. I doubt that will be a problem for you since you'll be routing over it a few times per quarter and therefore generating routing fees to justify keeping it open, and much of that time the liquidity will be on your end anyway.
Since you would be initiating the channel, you also don't have to open it to the LSP which aggressively optimizes for revenue, but it may be best to do so in your case to reduce future routing fees assuming you use Zeus's swap service instance. If you were to use Boltz instead of Olympus for swaps for example, you'd want to open your channel to Boltz.
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Yea OP seems like an obvious candidate for option 1.
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I would not do that. Better purchase in advance, especially if you already have a LN wallet with some sats in it.
Or you can even receive first, from the exchange, into Zeus cashu wallet (no channels needed) and then pay from there the lease for the LSP channel, with the size of the channel that fits your needs for multiple withdrawals.
JiT channels are not for this case.
Channels in advance are the best option.
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That's just unnecessary extra steps, are you referring to the routing fee discount on the pre-paid channel? I think its only discounted from the up-front fee they charge for the lease.
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That's just unnecessary extra steps,
Same as for sending from onchain.
But if you already have another LN wallet, you pay from that one the lease of the channel.
Is better this option for OP, because he need that channel to stay open a determined period. And that is guaranteed only by the LSP channels in advance, not for channels initiated with users funds.
Routing fees are irrelevant in this case.
I think OP did the mistake to use JiT channels only, and that's why had the impression that is using splicing... when in fact it was opening multiple tiny channels with a huge cost and unnecessary friction.
JiT channels are NOT viable for this scenario.
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Sounds like he can already send from Lightning from the exchange so could buy the pre-paid channel with that. I don't think closure will be an issue since he's DCA re-filling the channel regularly.
Pre-paid could make sense given that if the routing discount offsets the lease costs, main thing is to avoid trashu or JIT channels.
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I would avoid using the exchange withdrawal for any direct payment. If something goes wrong, you cannot manage it properly because you are not in control of any of the parts (sender and receiver) and even lose funds..
Better use a buffer zone. As I always said: use the 3 levels of stash - hold, cache, spending.
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It's an outbound from the exchange either way in this case since that's where he dumps fiat, direct to Olympus for the pre-paid channel is one less failure point vs. an intermediate/custodial wallet to do the same. In this case Zeus is the cache/mixer to obfuscate his cold utxo's from the exchange