Replying to Avatar yort

okay, so i spent awhile trying to wrap my head around lightning liquidity, and i need someone to check if i’m correct here:

if i wanted to purchase ~$100 p/week in non-KYC BTC over the lightning network (using Robosats), and then maybe when the balance hits like ~$1500 i’d probably want to move these funds on-chain, mix them, then send to cold storage

now, to do this i think i need to establish a channel with a well connected node and that channel would need about $1500 of inbound liquidity (and i’d probably want to keep maybe $500 in outbound liquidity too, just in case i wanted to spend on lightning more generally)

then, as i buy non-KYC BTC i’ll have that liquidity move from inbound to outbound, to the point where after 15-weeks i’ll have no inbound and entirely outbound liquidity in this lightning channel

what then? i would want to rebalance this channel, so i’d have to use an option like “loop” or “boltz”, where i would send all my outbound liquidity back over the channel, this would switch my $1500 of outbound liquidity to $1500 of inbound liquidity, right?

and then, with these “loop” and “boltz” services they would then send me the equivalent of $1500 on chain BTC to compensate me for moving all my outbound liquidity over (taking some 1% fee or whatever in the process)

then i just rinse and repeat the process?

seems like when they add “splicing” (resizing channels) it would be a bit simpler

i.e. when all the inbound becomes outbound then i can just create a movement for all the outbound to move on chain, and at the same time i can throw some more liquidity into the outbound to refresh it

This is the way I do it. It helps to have a few more channels. Multiple channels also helps with privacy. I loop out once the node liquidity is 2/3 on my side. The default loop out amount in lightning terminal changes it to around 1/3 on my side. The fees are around 0.2-0.3 % in my experience.

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thanks for that info, multiple channels makes sense that it improves privacy, not just always going through the same route, couple questions tho:

- how do i know what nodes to establish channels with from the beginning?

- like do i want to just jump in with a really big well connected node, or is it more optimal to go for someone not as big?

- is there any restriction on what nodes you must have channels with to use the loop service?

- i’m using CLN, so i think i have to use the “nloop” plugin, does this create any problems for me?

There's a lot to consider. Please check out youtube videos for a more comprehense discussion. I would say think about what is the purpose of your lightning node. If you just want to be able to send and receive, it is fine to connect to a few big nodes.

I'm not sure if there is. But generally, the lightning payment will require sufficent liquidity along the path to/from the Loop node(s).