I drew this up real quick. Hopefully it’s helpful. With Phoenix your phone is actually running a node with channels to another node. A channel has a total fixed size that is the combination of your balance and their balance. Your balance is what’s in your wallet that you can send (outbound liquidity). The rest is on their side, and that’s how much you can receive with that channel, (inbound liquidity). If you try to receive a payment larger than your available inbound liquidity, then Phoenix automatically opens a new channel that can handle it instead of you having to do that manually. Remember the balance/liquidity shifts as you send/receive. So sending 100k sats to someone means your balance decreases by 100k, but it also means you can receive 100k more sats inbound than before, and vice versa.