Hosted channels (HC):
- are used in SBW (obsolete), OBW (not maintained anymore), Valet (still existing)
- are like credit based channels (I am giving you a 1M sats empty channel, to which you can deposit/receive straight away up to 1M sats, then spend these sats as you wish)
- are like renting your node liquidity, straight away
- the capacity of the channel is set by the node provider, in his node
- are never broadcast to the chain. There is no onchain tx involved to open/close these HC, is just between
- are like just an empty glass received from the provider, ready to receive
- user request a HC with no funds necessary. Can deactivate or activate it anytime
- node provider just allocate a HC with a specific amount, with no funds involved.
- user can sweep the funds from a HC into another normal LN channel anytime.
- user can have cryptographic proof of the funds (hard rugpull)
- no need to back these channels, are linked to the wallet seed / nodeID of the user
- between user and provider, there is NO risk of force close because of a stuck HTLC or something like that, because in HC there are no HTLCs. Only from the provider node will be normal HTLCs, fw in the name of the user's node.
- user can have wrapped invoices too from the provider's node
0 conf channels:
- user need to have the funds in onchain to open the channel
- user will not pay the fee for opening channel, but will pay it only when the channel is closed and will pay both fees (opening/closing)
- user can also receive an inbound 0 conf channel, paying a specific fee to the provider and also sending a specific amount of sats that will be pushed on his side.
- user can also receive an empty 0conf channel from the provider, paying a specific fee
- user node will have just a normal channel that is not announced, but with regular HTLCs
- user can have wrapped invoices from the provider
As you can see are similarities but are not the same.
Both methods are very good to onboard new users on LN.