I have 18 Channels established.
If I send lets say 10,000 sats to my Lightning Wallet - Where do these funds go?
Are the sats evenly distributed to my channels at 555 Sats each per channel?
What are the benefits of adding liquidity to my lightning wallet?
Also for that sake - When our nodes create transactions, do the earned Sats get added to the size of the individual channel and make it larger?
Or do the Channels acquire Sats & they sit dormant until the channel is closed and the Channel size + earned Sats are returned to the two parties?
Funds will enter into the channel that have the best routes: low fee, fast ping, enough liquidity, shortest path
You really can´t send sats to your own wallet, you can only open and close channels with other wallets, and then pay sats (send payment) to other´s wallets. But the other side of channels can pay sats to you (returning some sats you have sent him).
When you open a individual channel, it has a fixed funds size, and keeps it as (sent + received + reserve), the initial amount can´t be changed. Earned sats are received payments.
For your lightning wallet, there is on-chain and off-chain balance. When you are sending BTC to your lightning wallet using another type of on-chain wallet, the new funds will be added to your on-chain balance. The off-chain balance is what is locked up in your open channels. When you open channels you are sending your on-chain amount to get locked into a channel with your partner. So this becomes off-chain amount. When you close channels you receive your sats into your on-chain wallet. The ideal case for most lightning channels is to have some inbound liquidity and some outbound liquidity so you can route transactions and as a benefit to you, earn routing fees.
Once a lightning channel is open it will always remain the same size while open (remember that a transaction was already entered into the Blockchain). What changes is how much inbound and outbound liquidity there is (i.e., are the sats on your end or your channel partner’s end). When you pay invoices your sats go to your channel partner’s end (i.e., your outbound liquidity that you transferred ends up as inbound liquidity). When you collect routing fees, you receive more sats into your channel via your inbound liquidity than you send out. Ex: Through routing a transaction your inbound amount is 100,500 sats and your outbound amount is 100,000 sats. On the inbound channel your inbound liquidity reduced by 100,500 sats and on the outbound channel your inbound liquidity increased by 100,000 sats. You earned 500 sats through that routing. You will likely need to constantly rebalance your channels to allow them to continue to route effectively.
Thank you for taking the time to explain this.
Reason I ask is - I use a dumb step counter app on my phone that pays you in sats and can only be cashed out and deposited onto a lightning wallet. Ive only cashed out three times for like 400 sats, 500 sats, etc in the past 3 months…
Very minuscule, but hey, you gotta stack sats where you can.
Np, glad I can help.
That’s cool, what’s the app called? I want to earn sats too
I decided to test this today to see where the sats end up.
My results are as follows: