Inbound Liquidity

1 min read

Within the context of a Lightning channel, inbound liquidity refers to funds inside a node’s payment channels which can be used to receive payments.

Specifically, inbound–or “remote”–liquidity are funds within a channel that are owned by other network participants, such as channel counterparties. If the payment channel is closed, the funds return to the counterparties and not the node operator.

Inbound liquidity is created:

  • When a network participant opens up a new payment channel to a node.
  • When a node operator makes a payment via an existing channel.

Inbound liquidity visualization

In the visualization above, Bob has two slots open, each representing 100,000 sats. Therefore, Bob has 200,000 sats worth of inbound liquidity in this channel; he can receive up to 200,000 sats. Conversely, Alice only has outbound liquidity, meaning that she can only send payments at the moment.