If you find self-custodial Lightning confusing when it comes to your channel capacity and liquidity, or if you’ve ever wondered why your wallet says you need a new channel when you already have one, think of it this way. Each channel in your Lightning wallet is like a water bucket. You can receive water into a bucket only until it’s full. To receive more water, you either need to empty some water out of your existing bucket or add additional buckets to your setup. You can only pour/send as much water out of a bucket as it already has in it, but emptying your bucket allows you to then receive more water, up to the capacity of the bucket.