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 dynamic channel, eliminating the need for dispersed liquidity and split issues.
With splicing, users can now change channels, add or remove funds without increasing future risk. The previous 1% inbound liquidity fee has been replaced by a mining fee for the underlying on-chain transaction. The announcement emphasized the importance of splicing, saying, “We believe that the efficiency gains brought about by splicing are so significant that all wallets will eventually implement it.”
The new version of Phoenix also addresses user concerns about unexpected channel creation fees. Users are now notified in advance if an upcoming Lightning payment has a channel management fee, allowing fine-grained control over payment management. In addition, the fee for sending Lightning payments is now set at 0.4%, ensuring transparency and aligning incentives between users and the wallet provider, “to find the best (reliability, cheap) route within the fee budget.”
A unique feature of the new Phoenix is trustless swaps. Instead of relying on swap services, which often lack flexibility, Phoenix allows users to make on-chain transactions directly from their channel. Users have the freedom to set their own payment and even adjust the payment later for faster confirmation.
While splicing offers unique benefits, it should be noted that external swap services have advantages in certain transactions. These services break the link between off-chain and on-chain, maintaining channel size and increasing inbound liquidity.
The new Phoenix wallet marks an important milestone in the development of self-custody wallets. Its improved features, such as splicing, improved predictability and trustless swaps, reflect the continued innovation of the Lightning Network ecosystem. The announcement noted that users can expect improvements such as blind channels for better privacy, BOLT 12/Offers for static Lightning invoices and Taproot for cheaper channel management and improved on -chain privacy.
The beta version of the new Phoenix is currently available for Android users, with an ETA for the iOS release expected in the coming weeks. Interested users can apply for the beta by emailing email@example.com.