Phoenix, a Lightning wallet developed by Acinq, has undergone significant improvements with the introduction of splicing technology, resulting in a more efficient and user-friendly experience. Unlike previous versions, which created multiple channels and incurred unpredictable fees, the new Phoenix manages a single dynamic channel, eliminating the need for scattered liquidity and splitting issues.
With splicing, users can now resize channels, adding or removing funds without adding future risk. The previous 1% fee on inbound liquidity has been replaced by the mining fee for the underlying on-chain transaction. The announcement emphasized the significance of splicing, stating, "We believe that the efficiency gains brought by splicing are so phenomenal that all wallets will eventually implement it."
The updated version of Phoenix also addresses user concerns regarding unexpected channel creation fees. Users are now notified in advance when an incoming Lightning payment will incur a channel management fee, allowing for fine control over fee management. Additionally, the fee for sending Lightning payments is now fixed at 0.4%, ensuring transparency and aligning incentives between users and the wallet provider, “to find the best (reliable, affordable) route within the fee budget.”
One notable feature of the new Phoenix is trustless swaps. Instead of relying on swap services, which often lack flexibility, Phoenix enables users to make on-chain transactions directly from their channel. Users have the freedom to set their own feerate and even adjust the fee later for faster confirmation.
While splicing offers remarkable benefits, it should be noted that external swap services still hold advantages in certain transactions. These services cut the link between off-chain and on-chain, maintaining the channel size and adding inbound liquidity.
The new Phoenix wallet marks a significant milestone in the development of self-custodial wallets. Its enhanced features, such as splicing, improved predictability and trustless swaps, showcase the continuous innovation in the Lightning Network ecosystem. The announcement noted that users can look forward to advancements like blinded paths for better privacy, BOLT 12/Offers for static Lightning invoices and Taproot for cheaper channel management and enhanced on-chain privacy.
The beta version of the new Phoenix is currently available for Android users, with an ETA for iOS release expected in the coming weeks. Interested users can apply for the beta by emailing phoenix@acinq.co.
Source: Bitcoin Magazine - Bitcoin News, Articles and Expert Insights