Lightning fees, explained

Lightning fees are confusing in the same way airline pricing is confusing — there are multiple kinds of charge, sitting in different places, and any specific transaction touches some but not all of them. This guide breaks them down so you know what you’re paying for and when.

The four kinds of Lightning fee

There are roughly four categories of cost on Lightning:

1. Routing fees — paid by the sender to nodes along the payment path.
2. Channel-open fees — paid on-chain when a Lightning channel is opened.
3. Wallet service fees — charged by a wallet provider for liquidity, hosting, or other services.
4. On-chain fees — paid when sats move between Lightning and on-chain (channel opens, closes, splices, submarine swaps).

A given payment touches some of these and not others.

Routing fees

When a sender pays a Lightning invoice, the payment hops through one or more intermediate nodes on its way to the recipient. Each intermediate node charges a small fee for forwarding the payment, typically:

• A base fee — fixed sat amount, often 1 sat or zero.
• A proportional fee — a fraction of the payment amount, often 0.0001% to 0.1%.

Total routing fees for a $10 payment across two or three hops are usually well under a cent. Routing fees are paid by the sender, not the recipient. The recipient never sees a routing-fee deduction on their incoming payment.

Channel-open fees

To use Lightning, you need at least one open channel. Opening a channel is an on-chain transaction that pays normal Bitcoin miner fees. For a non-custodial wallet, this happens automatically the first time you receive — your Lightning Service Provider (LSP) opens a channel to you so you have inbound liquidity.

Each wallet handles this differently:

• Phoenix uses splicing instead of opening a new channel for every operation. You pay mining fees only on the splice transaction. No flat service fee.
• Breez charges 0.75% of channel capacity on initial channel open.
• Alby Hub lets you open channels manually (free with managed hosting) or via Alby Cloud-managed liquidity.
• Muun sidesteps channels entirely by submarine-swapping every Lightning payment to on-chain — which has its own cost profile.

For a creator receiving their first payment on a fresh self-custodial wallet, the channel-open cost can feel disproportionately high (a few thousand sats on a small first payment). It’s a one-time cost; subsequent payments use the existing channel.

Wallet service fees

Some wallets charge a percentage or flat fee for the service they’re providing. Examples we currently see:

• Phoenix: 0.4% fixed on outgoing Lightning payments.
• Alby Cloud: $9.90/month subscription (hosting fee, not per-payment).
• Muun: no flat fee, but every Lightning payment is a submarine swap that pays on-chain fees.
• Custodial wallets (Wallet of Satoshi): typically free at the sat level; the provider absorbs operating cost.

These are wallet-specific. Read the wallet’s pricing page before you commit to it — fees are honestly disclosed by all major Lightning wallets, but you have to look.

On-chain fees

Any movement between Lightning and on-chain Bitcoin pays normal Bitcoin miner fees:

• Opening a channel.
• Closing a channel.
• Splicing (Phoenix’s mechanism — add or remove channel capacity in place).
• Submarine swaps (Muun’s mechanism for every payment).

When the Bitcoin mempool is empty, these fees are small. When the mempool is busy, they spike, and wallets that splice or swap aggressively feel that more than wallets with stable channels.

What does a normal payment actually cost?

A few realistic scenarios:

• A $5 tip via Wallet of Satoshi (custodial) → Phoenix (self-custodial). Routing fee: a few sats (well under a cent). No channel cost on the sender side (custodial). Recipient may pay a one-time channel-open cost if this is their first inbound payment.
• A $20 BOLT11 invoice paid between two well-connected Alby wallets. Routing fee: ~10–30 sats. No channel-open cost (existing channels). Total cost: under a cent.
• A $200 ecommerce purchase via OpenNode. Routing fee invisible to the merchant (OpenNode absorbs it). Withdrawal fee: 1% on on-chain withdrawal. Total cost on the merchant side: ~$2 if they withdraw.
• A $100 first payment to a fresh Breez wallet. Channel-open: 0.75% = $0.75. Routing: pennies. Total: ~$0.75 one-time, then negligible thereafter.

How to keep fees low

• Use a wallet with mature channel management (Phoenix, Alby Hub, Breez) instead of fresh-channel-per-payment patterns.
• Receive in bigger batches rather than many tiny first-time payments.
• For merchants doing significant on-chain settlement, run BTCPay Server — it avoids the percentage withdrawal fee that hosted processors charge.
• Avoid moving small amounts between Lightning and on-chain when the mempool is busy; wait for fees to drop.

Next step

• Lightning vs on-chain Bitcoin payments — when to use which.
• Best self-custodial Lightning wallet — wallets with the cleanest fee models.
• Is Lightning Network safe? — the other half of the “what are the trade-offs” question.

FAQ

How much does a typical Lightning payment cost? +

For a small consumer payment between healthy wallets, fees are typically under one cent — often a few satoshis. Larger payments and payments across less-liquid routes can cost more, but Lightning routing fees are usually a small fraction of on-chain transaction fees.

Why did my Lightning wallet charge me a 1% fee? +

That's usually a service fee from the wallet, not a routing fee. Some wallets charge a percentage on channel opens or other liquidity operations. Read the wallet's fee disclosure — it varies by wallet.

Do I pay fees on incoming payments? +

Typically no for routing — the sender pays. But you may pay a one-time channel-open fee when receiving for the first time on a self-custodial wallet, because the wallet needs inbound liquidity to receive. Phoenix, Breez, and Alby all have variants of this.