Charging for Channel Opens

In our last lesson, we learned about routing fees. But what if you could earn sats more directly? In this lesson, we'll explore charging for channel opens — selling your valuable inbound liquidity to those who need it.

The Inbound Liquidity Market

When you open a channel, all the liquidity begins on your side as outbound capacity, yet for the other party to receive payments, they must have inbound liquidity. This presents a challenge for new node operators who urgently need inbound capacity but often struggle to acquire it without others initiating channel opens to them. This scarcity gives inbound liquidity significant value, providing a solution where node operators can sell their inbound capacity to buyers who pay for channel opens, thereby creating an emergent marketplace.

Why Inbound Liquidity Has Value

Inbound capacity is essential for various network participants: receivers need it to accept payments, merchants require it for higher receive capacity, and routing nodes benefit from balanced channels that route more effectively in both directions. Because quality inbound from well-connected nodes is limited by supply and demand, a natural market is created where liquidity providers can charge for their service.

Amboss Magma Marketplace

Amboss Magma is the leading liquidity marketplace. It works by having liquidity providers list their offers with specific channel sizes, durations, and prices, allowing buyers to browse and select the offers that meet their needs. Once a payment is made, typically via Lightning, the channel is opened automatically and the buyer receives their inbound liquidity. Key features of the platform include verified node reputations, automated channel opens, escrow for payments, and an integrated rating system.

Pool by Lightning Labs

Pool is another liquidity marketplace that operates differently from fixed-price platforms. It uses an auction-based system where sellers offer temporary liquidity leases and buyers bid for inbound capacity. Matching occurs through batch auctions using Lightning Loop technology under the hood. Unlike Magma, Pool is native to the LND ecosystem, requires a more complex setup, and relies on batch-based execution rather than individual channel opens.

Pricing Your Liquidity

When pricing your liquidity, several factors should be considered to ensure your offers are both competitive and profitable. First, evaluate your capital cost and what else you could be doing with those satoshis. Your node quality also plays a significant role, as well-connected nodes can often charge a premium for their services. Additionally, you must monitor current market rates to see what others are charging, and consider how the lease duration impacts price, as longer commitments may warrant higher rates. Finally, consider the channel size, as offering larger channels might allow for volume discounts that attract more buyers.

Typical Market Rates

Based on recent market conditions, typical rates can vary significantly across different platforms. On Magma, you might see ranges between 100 and 500 parts-per-million for 30-day leases, while Pool rates are determined by auction and remain historically variable. Private deals involve negotiated rates which are often lower than what is found on established marketplaces. Keep in mind that these rates change frequently based on supply, demand, and overall market conditions, so you should always check current pricing before making an offer.

Building a Liquidity Sales Business

Building a successful liquidity sales business requires meeting certain scale requirements, such as having sufficient capital to offer multiple channels, maintaining high uptime and reliability, and establishing a good node reputation. Operational needs include monitoring offers and fulfillment, tracking lease expirations, managing capital allocation, and providing customer service when issues arise. To build and maintain your reputation, focus on consistent delivery, competitive pricing, and running reliable nodes.

Risks of Selling Liquidity

You face capital lock-up as funds are committed for the lease duration. You must pay on-chain fees to open channels. There's force close risk if the buyer goes offline, as recovery costs both time and fees. Market risk exists because Bitcoin's price may change during the lease. Counterparty risk means the buyer may not actually use the channel, wasting your capital. Finally, opportunity cost prevents your capital from being used elsewhere during the lease.

Calculating Profitability

In calculating profitability, your revenue is the lease fee received, while costs include the on-chain fees to open and eventually close the channel, along with capital opportunity costs and management time. For example, if you receive a lease fee of 200 satoshis but pay opening and closing fees totaling 1,000 satoshis over a 30-day period, you would lose money if you simply opened and closed the channel. Achieving true profitability requires multiple lease renewals, earning routing fees during the lease period, and practicing efficient capital management.

LN+ Liquidity Services

LN+ offers liquidity services including Liquidity Swaps for collaborative channel rings, where you gain inbound capacity through a coordinated exchange, and the Liquidity Pool, which enables credit-based liquidity sharing among node operators. These community services can complement marketplace sales by helping you build node reputation and valuable network connections.

Private Liquidity Sales

You don't necessarily need a marketplace to sell liquidity. Through direct negotiation, you can connect with buyers in various communities, offer them custom terms, and build ongoing business relationships. The primary advantages of this approach are that you avoid marketplace fees, enjoy highly flexible terms, and can focus on long-term relationship building. However, there are some disadvantages to consider: finding buyers requires more effort, trust and escrow can present significant challenges, and scaling your operation is generally more limited than when using an automated marketplace.

Best Practices for Selling Liquidity

When selling liquidity, it's essential to price your offers competitively yet sustainably, while maintaining high uptime and reliably honoring all your commitments. Building a strong reputation over time and diversifying your buyer base are also key strategies for success. Conversely, you should avoid overcommitting your capital, never ignore lease expirations, and be careful not to underestimate on-chain costs. It is equally important not to neglect your node's health or make promises that you are unable to deliver.

In this lesson, we explored charging for channel opens — a more direct way to monetize your Lightning node. Whether through Amboss Magma, Pool, or private deals, selling inbound liquidity can generate revenue beyond routing fees.

In our next lesson, we'll dive deeper into Loop and Pool by Lightning Labs — powerful tools for managing and monetizing your liquidity.