Non-Custodial Lightning
Luca avatar
Written by Luca
Updated over a week ago

Relai stays true to its non-custodial motto and has implemented the Bitcoin Lightning integration in a non-custodial form together with Breez and Blockstream/Greenlight, the Lightning infrastructure and service provider. This allows you to conduct faster and cheaper Bitcoin transactions without losing control over your coins.

What is a Lightning Service Provider (LSP)?

A Lightning Service Provider (LSP) like Breez is a service that facilitates your access to the Lightning Network. Lightning transactions require channels filled with liquidity through which payments are routed. The LSP provides the necessary liquidity and manages these channels. At the same time, through the channel with the LSP, you are indirectly connected to a large part of the Lightning Network, as the LSP itself is connected to many other nodes in the Lightning Network. This allows Relai Lightning users to send payments easily and quickly to various other participants in the Lightning Network.

The Lightning node of each Relai Lightning user operates in the background, hosted by Blockstream/Greenlight. This ensures that the infrastructure is reliable and professionally managed.

How does Relai Lightning work?

Lightning is an opt-in feature. This means that Lightning must first be manually activated by you in the 'Wallets' tab before it can be used. Currently, Relai Lightning is still in the BETA phase.

In the 'Wallets' tab, you can see how much On-Chain BTC and how much Lightning BTC you have in your wallet.

Click on the blue 'SWAP' button to perform a SWAP-in or a SWAP-out. A SWAP-in is an exchange of On-Chain BTC for Lightning BTC. A SWAP-out is an exchange of Lightning BTC for On-Chain BTC. Please note that the minimum and maximum SWAP-in and SWAP-out amounts are dynamic and dependent on the Bitcoin network fee. Relai has no control over this.

You can find the corresponding FAQ articles on Relai's website regarding sending and receiving Lightning BTC.

How do Lightning channels work?

A Lightning channel is a private connection between two nodes in the Lightning Network that enables transactions to be conducted off the Bitcoin-Blockchain. With Relai Lightning, this private channel exists between you and the LSP. This is how it works:

  • Opening a Channel: With Relai Lightning, the LSP is your channel partner. To open a channel through a SWAP-in, you send bitcoin to the LSP. The LSP then opens the Lightning channel to you on the Bitcoin-Blockchain.

  • Off-Chain Transactions: Once the channel is open, both parties can conduct Lightning transactions through this channel. The balances in the Lightning channel are continuously adjusted.

  • Closing the Channel: The channel remains open as long as both parties want to exchange transactions. When one party wants to close the channel, the final balance is published on the Bitcoin-Blockchain to confirm the final account balances.

Inbound and Outbound Liquidity

For successful Lightning transactions, it is important that a Lightning channel has both Inbound and Outbound liquidity. Inbound liquidity means that BTC can be received in the channel, while outbound liquidity means that BTC can be sent through the channel. The LSP helps to provide and balance this liquidity to ensure smooth transactions.

With Relai Lightning and the support of Breez and Blockstream, you can benefit from fast and cost-effective transactions without losing control over your coins.

Did this answer your question?