Can anyone help me with a question about Phoenix wallet? Believe my inboud liquidity is close to 0. For example under channel details it says 105k and capacity 113k. Yesterday I wanted to send myself a micro payment 'c.a. 4k sats, that then cost me 2k of it in miner fees.
Thought OK, sure that was such a splicing transaction to increase the capacity of a channel, but actually the capacity (see above) is still almost used 🤷‍♂? And the next mini LN TX I wanted to do was rejected because it would cost too high "mining fees".
Don't get it, LN is supposed to be cheap and stay that way? I imagined if the Phoenix already makes a splicing tx that also put a little inbound liquidity on top. I do not want to pay for each mini LN TX: 2-4k sats mining fees 🤯
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.
LN is supposed to be cheap and stay that way?
Lightning is only cheaper than on-chain, big difference (and also: instant and more private).
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Very much appreciate this community work and reasonable arguments. I see your point. The option to buy inbound liqudity would be nice, as A) I would have a way to spendl (adoption here is shit) and B) could solve my issue for micro TXs
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But what does not make sense to be is, that when you try to spent (had to do it via onchain sadly), the channel will be spliced out (automatically reduced in size).
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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.
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We had a dev from ACINQ here but they responded because I wrote them a mail with the requested feedback for the Phoenix Wallet Beta and mentioned my post and then never showed up again unfortunately.
I think I'll just write them a new mail :) Should also be in their interest to answer questions like this.
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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
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Buying inbound liquidity upfront (aka liquidity ads in LN protocol speak) is one of the options that we are exploring. Devil is in the details though.
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We will only be able to buy liquidity from the ACINQ node, right?
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Yes, since Phoenix is only connected to the ACINQ node.
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Don’t think you have that much manual control of channels in Phoenix. And with their splicing solution you can’t even see multiple channels any longer. You have much more fine tuned control with your own node, Zeus, or Blixt. I have a channel opened to ACINQ with my LND node and they do have higher fees on their channel by default. I still see a lot of routing through them, however.
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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.
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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.
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It only makes financial sense to have paid inbound liquidity like you have with LNBig and services like it. Obviously they'll need to think about what the UX for that looks like, but point is that's a reality of the technology so its not good to fight technical reality
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its not good to fight technical reality
Exactly, but we may have a little bit over corrected in that direction here and can probably do better.
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I'm not complaining, I spend sats so I have inbound 😎
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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 ?
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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.
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Receiving fee = mining fee (when inbound liq is insufficient) Sending fee = 0.4% + 4 sat
There is currently a silly rouding error in the iOS interface which shows 0.5% but it's really 0.4%
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And Phoenix has never failed to send or receive for me. So you get great liquidity management but do have to pay a bit more.
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I ran my own routing node in the past so yeah I have considered that I do not complain about the fees in general. But channel management is shit if I have to pay like 2500 sats for every 1000 sats I want to receive.
You talking about ppm, I am talking about phoenix wanting to do an onchain tx for every LN I receive. What is the purpose of LN then if I am forced to do a onchain tx everytime
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I also ran one of the top 100(circle-jerk ranking), profitable routing nodes for years, which I was only recently happy to shut down. My point is that LN is not as cheap as you might think. (e.g. ECC RAM, Raid1 and so on.)
There are settings to cap max fee % and absolute LN fee in Phoenix.
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Sure I acknowledge your point and I do not say that fee are unreasonable on phoenix. Happy to pay them for the service they provide. I guess you are missing my point: There is something wrong if it mandates an onchain tx for every LN one does receives.
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Yes you are right and it needs to be fixed.
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Just run your own node
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This is my conclusion too after trying out all these LSP mobile lightning wallets.
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Did it and enjoyed it. This is the best way to learn more about Bitcoin contribute to adoption but also can be stressful. Ever had a node failure just a brief reminder even with SCB and security measures LN is still early and thus reckless. I decided after a while for peace of mind. However I think running a small node is fine and my way to go forwards
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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.
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Same with me. I no longer use them regularly because their fees can get up to and cross onchain fee equivalents very quickly!
Still haven't found a good solution that's not my own node and not custodial for fee efficiency 🤷🏽‍♂️
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their fees can get up to and cross onchain fee equivalents
When that happens, consider sending on-chain instead, there is no overhead you will only pay the mining fee. Depending on amount/feerates/etc., on-chain makes more sense than Lightning sometimes. The new Phoenix precisely allows you to get the best of both world.
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Well I can't find the post, but I spoke with a user months ago about how they sent like a very large amount of money over LN and regretted it due to the fees, and when I asked why they didn't just use on-chain for a transaction that large, they just said that they didn't know.
Is there a way to warn the user about what the fee for their send is about to be to then recommend the use of on-chain (based on going on-chain fee rates)? Just a little "Are you sure" pop up in some way? I do believe that would be a quality of life improvement for some users.
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Yes we are planning something like this. We already have a somewhat similar screen for unified invoices.
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My situation too, but I was following the mempool and onchain transaction was slightly cheaper than Phoenix. I ended up paying 20-30 sats on embedded Zeus node (10-20x cheaper than Zeus)
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Check out Zeus. Their TestFlight version has an embedded node that works great and is much cheaper. Can open own channels or allow LSP to handle that for you. Self-custodial
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I posted about it here: #285486
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Just tested mutiny wallet to WoS and the fees were 3/10,000, or 0.03 %
;-)
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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.
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I think that sounds like an onchain TX
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Try their support email, phoenix@acinq.co. They're responsive.
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No, don't, I already send them a mail haha
I asked them to answer here. If they'll answer by responding to my mail, I'll forward the answers.
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