I’m confused, does custodians include lightning because that’s exactly what lightning channel participants are, right?

Are we talking about scaling on the chain only?

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A custodian takes control of your money and issues you a claim to it. Lightning is a collaboration but the custody of funds stays with the channel creator until settlement. While this is a claim(for the channel participant) it is the most secure way to secure a digital asset for future reclamation. Lightning is custodial not to a party but to a ruleset (just like layer one bitcoin).