Choosing a lightning wallet shapes your whole experience of the lightning network. Course 2’s lesson on the best Lightning wallets gave you an overview of the popular options. This lesson goes deeper: how each major wallet handles channels, fees, backups and privacy, and what each choice means for your money.
Self-custodial Lightning wallets now do jobs that once needed your own node, but each does them differently, and that decides what it costs you, who sees your payments and what you must keep safe.
Lightning Wallets: A Deeper Technical Comparison
Every lightning wallet has to manage channels, find routes, get inbound liquidity and keep your funds recoverable. Four questions separate them, and each one matters to you for a concrete reason:
- Who holds the keys? You (self-custodial), a group of guardians (federated) or a company (custodial). This decides whether anyone else can lose, freeze or take your bitcoin.
- Where does the Lightning node run? On your phone, on a node you run at home, or on someone else’s server. This decides whether you depend on a company being online.
- Who manages the channels? You, the wallet automatically, or a Lightning Service Provider (LSP), a company that opens channels to you. This decides how much work you do and how much you pay in fees.
- How do you recover? A seed phrase alone, a seed plus a channel backup file, or a provider’s copy of your data. This decides what you must keep safe so that losing your phone doesn’t mean losing your money.
Phoenix Wallet Deep Dive
Phoenix is built by ACINQ, one of the teams that wrote the original Lightning specifications, and the maker of the Eclair node software. It is a strong choice for people who want a self-custodial wallet without managing channels themselves.
Architecture
Phoenix runs a real Lightning node on your phone, built on ACINQ’s mobile library lightning-kmp (Phoenix on GitHub). Your keys stay on your device. Your channel is always with ACINQ’s own node, which acts as your LSP: it opens and resizes the channel and provides liquidity.
Splicing: Phoenix’s Core Innovation
Phoenix uses splicing, which resizes an existing channel with one on-chain transaction instead of closing it and opening a new one. In practice:
- You normally have a single channel, with ACINQ.
- A payment bigger than your inbound liquidity triggers a splice that makes the channel bigger.
- Bitcoin you send to your Phoenix on-chain address is added to the channel after 3 confirmations, if the mining fee is below the maximum you set in Settings → Channel management. Until then it shows as “sleeping”; it is still yours (Phoenix FAQ).
- The channel keeps working while a splice confirms.
Fee Structure
Phoenix publishes its fees (Phoenix fee table, checked 6 November 2026):
- Sending over Lightning: 0.4% + 4 sat per payment
- Receiving over Lightning: free, when it fits in your existing channel
- Receiving without enough inbound liquidity, or requesting liquidity in advance: 1% + mining fees
- Channel creation: 1,000 sat
- Sending or receiving on-chain: the mining fee
By default Phoenix rejects an incoming payment “if the fee is more than 5000 satoshi (or 50% of the amount)”. A rejected Lightning payment goes back to the sender; a rejected on-chain deposit stays in your wallet as “sleeping” until the swap is cheap enough. You can raise the limit in Settings → Channel management.
A worked first deposit. Say your very first payment is 20,000 sats over Lightning, from a friend. You have no channel yet, so Phoenix creates one: 1,000 sats for channel creation, plus 1% of the payment (200 sats), plus the mining fee for that day. That is 1,200 sats plus the mining fee, which is small when the network is quiet: around 6% of what you received, or more. The fixed part weighs less on a bigger first deposit, and once the channel has room, receiving is free. If on-chain fees are very high that day, the total may pass the 5,000-sat limit and Phoenix will return the payment.
Trampoline Routing
Phoenix doesn’t work out payment routes on your phone. It uses trampoline routing: it hands the payment to ACINQ’s node with the destination, and ACINQ’s node finds the route. That saves your phone’s battery and data. The trade-off is privacy: ACINQ says that the current version of Phoenix “offers no advantage regarding privacy over existing, hosted, custodial wallets. We (ACINQ) know the final destination and amount of payments” (Phoenix FAQ).
What this means for you: ACINQ can’t spend or freeze your bitcoin, but it can see whom you pay and how much. That’s the price of convenience here. The exception is paying a BOLT12 offer from someone not on Phoenix: its blinded path can hide the recipient from ACINQ, which still sees the amount.
One setting reduces how much you depend on other people’s servers. Phoenix watches the blockchain for anything that affects your channel through Electrum servers, and “you can configure Phoenix to use your own Electrum server to watch the Blockchain and monitor your channels” (Phoenix FAQ). If you later run your own Electrum server (Lesson 4.7 shows when that fits), it is a small step worth taking. It doesn’t change what ACINQ sees about your payments.
Platforms and Backup
Phoenix runs on Android and iOS. Recovery needs only your 12-word recovery phrase: ACINQ’s node keeps an encrypted copy of your channel data, encrypted with your wallet’s own key, and hands it back when you restore. If you lose your phone, install Phoenix on a new one, choose “Restore my wallet” and enter the 12 words.
Zeus Wallet Deep Dive
Zeus is the choice for people who want control. It works in two ways: as a remote control for your own Lightning node, or with a Lightning node running inside the app.
External Node Mode
Zeus connects to a node you run, using either of the two main node programs:
- LND
- Core Lightning (CLN)
In this mode Zeus is a remote control (Zeus on GitHub). Channels, liquidity and routing all live on your node; Zeus gives you a phone screen for them. This is ideal if you already run a node at home on Umbrel, Start9, RaspiBlitz or similar. Lesson 4.7 shows how to connect it.
Embedded Node Mode
Zeus can also run a Lightning node inside the app, with no other node needed. Paired with Olympus, the LSP run by the Zeus team, which opens channels to you automatically, this works much like Phoenix. In November 2026 Zeus offers two kinds of built-in node, and they differ in what they reveal (Zeus’s comparison):
- Embedded LND follows the blockchain with compact block filters (the Neutrino protocol, BIPs 157 and 158). Full nodes send it a short summary of each block, the phone checks those summaries for its own addresses, and it fetches only the blocks that match, so no server is told which addresses are yours. Zeus puts its size on the phone at about 1 to 5 GB.
- LDK Node, built on the Lightning Dev Kit (LDK, a code library developers use to put Lightning inside their own apps), syncs in seconds and takes about 10 MB, but it asks an Esplora server (a block-explorer server) about your addresses, so that server sees them unless you point Zeus at one you run yourself.
Either way, Zeus works out payment routes on the phone, so, according to Zeus, Olympus doesn’t learn where your payments end up; as your channel partner it still sees the amount and that the payment came from you (Zeus privacy notes). That is the main privacy difference from Phoenix.
Tradeoffs
Zeus offers the most flexibility but asks more of you. External node mode assumes you run and maintain a Lightning node. The built-in node is easier, but it is a full Lightning node on your phone: Zeus’s own figures put a day of keeping the LND-based node running in the background at about 9 to 15% of the battery. Zeus is open source (AGPLv3).
Platforms
Zeus runs on Android and iOS. In external node mode your phone must be able to reach your node, over Tor, a VPN or a direct connection.
Breez SDK and What Happened to the Breez Wallet
The original Breez wallet, a self-custodial wallet that ran LND on your phone, is no longer in the app stores. If you still have an old Breez backup, Breez has published an experimental desktop recovery tool. Breez now focuses on its developer kit, the Breez SDK, which other apps use to add Lightning payments, and it publishes a new wallet, Glow, built on that kit. We have not reviewed Glow or the SDK’s current design, so neither is in the comparison below (checked 3 Nov 2026; Breez SDK documentation).
Fedimint: Federated Custody
Fedimint is a different model: federated custody. Instead of one company holding your bitcoin, or you holding it alone, a group of independent guardians holds it together.
How it works:
- A community sets up a federation run by several guardians, for example four trusted members.
- Users deposit bitcoin into the federation.
- The federation issues eCash: digital tokens that stand for a claim on the pooled bitcoin and that the guardians can’t link to the person using them.
- Users pay each other with eCash, which gives strong privacy.
- A minimum number of guardians, for example 3 of 4, must agree before bitcoin leaves the federation.
Federations can run a Lightning gateway, a node that turns eCash into Lightning payments and back, so members can pay and be paid by anyone on Lightning.
What this means for you: you trust the guardians as a group. If enough of them collude, fail or are coerced, your bitcoin is at risk. That is less trust than in a single company, and less technical work than self-custody. It suits communities where individual self-custody is hard but handing everything to one company is risky.
Technical Comparison Table
| Wallet | Node Implementation | Custodial? | Channel Management | Backup Method | Platforms | Notable Feature |
|---|---|---|---|---|---|---|
| Phoenix | lightning-kmp, on your phone | No | Automatic (splicing, ACINQ as LSP) | 12 words; channel data restored from ACINQ’s encrypted copy | Android, iOS | One channel, resized as needed |
| Zeus | LND or LDK on your phone, or your own LND/CLN node | No | Via LSP, or manual on your node | Seed + channel backup (with the default LDK Node, channel state kept on a VSS server, and a restore should bring the channels back open; with embedded LND or your own node, a small file that lets a restored node ask your channel partners to close the channels, so your share comes back on-chain, and embedded LND uploads an encrypted copy by default; see Lightning backups) | Android, iOS | Connect to your own node |
| Wallet of Satoshi | Not verified by us | Custodial in some regions, self-custodial (Spark) elsewhere, per the company (not verified by us, Nov 2026) | Managed by the app | In Spark mode only, a 12-word phrase for Spark-compatible wallets, per the company | Android, iOS | Simplest UX |
| Fedimint | Federation gateway | Federated | N/A (federation handles) | Your app’s recovery phrase (12 words in Fedi); the federation can also keep an encrypted backup of your eCash | Various clients | Community custody with eCash |
Before You Put Money In
Whichever self-custodial wallet you pick, do these before the first deposit:
- Write down the recovery words on paper and keep them offline. They are the only way back to your money if the phone is lost, stolen or broken. Our lesson on storing a seed phrase explains how.
- Know how restore works. In Phoenix, the 12 words are enough. In Zeus, the words bring back your on-chain funds, and the money in your channels also needs a channel backup. Zeus’s LDK Node wallet, the default for new wallets, backs up your channel state continuously, encrypted, to a VSS server; restore the words against that same server and your channels should come back open. With embedded LND, Zeus uploads an encrypted channel backup by default, and restoring from it closes your channels, so the money returns on-chain after a wait of up to two weeks. With your own node, you keep that node’s backups yourself. Our lesson on Lightning backups and watchtowers explains each piece.
- Never run the same wallet twice. Don’t restore your Phoenix words on a second phone while the first is still in use: both would share the same channels, which “could cause issues and payment channels might close” (Phoenix FAQ). To switch phones, take the old one offline first (airplane mode, Wi-Fi off), restore on the new one and, once your balance shows there, delete Phoenix from the old phone before it goes back online.
- Force close is a last resort. Phoenix has a “Force close channels” button. ACINQ says to use it only if ACINQ itself has disappeared: it takes 720 blocks (about five days) and “high fees apply”. For anything else, contact support.
- Start small while you learn, and keep savings on-chain or in cold storage.
Choosing the Best Lightning Wallet Based on Your Setup
The right wallet depends on your setup and what you care about most:
You Do Not Run a Node
- Phoenix: a good place to start. Simple, self-custodial, with published fees. What this means for you: you keep your keys, you pay predictable fees, and ACINQ sees your payments.
You Want More Privacy but Don’t Run a Node Yet
- Zeus with its embedded LND node: your own Lightning node on the phone, following the blockchain through block filters, with Olympus opening your channels. What this means for you: by Zeus’s account its LSP doesn’t see where your payments go, and no server is told your addresses, in exchange for more battery use and more to learn than Phoenix. It is also a good step toward the full setup below: Zeus can later act as the remote control for a node you run at home.
You Run Your Own Node
If you run a node at home on Umbrel, Start9, RaspiBlitz or a server:
- Zeus: connect to your LND or CLN node and control your channels from your phone. What this means for you: no single company sees all your payments or holds your channels, and you are responsible for backups and uptime.
You Want Maximum Simplicity
- Wallet of Satoshi: almost nothing to learn. For years it was a custodial wallet, where the company held users’ bitcoin. The company now runs two modes (its disclosure, last updated 25 Aug 2026): a custodial account, which new users get first in the regions where it is offered, and a self-custodial Spark wallet, available everywhere, whose 12-word recovery phrase restores only in Spark-compatible wallets. We have not verified how it works. What this means for you: check which mode your app is in, assume you may be trusting the company with your funds, and keep only small amounts in it.
You Want Community Custody
- Fedimint: for communities, families or groups who trust a set of guardians. What this means for you: strong payment privacy and little technical work, in exchange for trusting the guardians as a group.
For wallet basics and first setup, review Course 2’s lesson on the best Lightning wallets. To try your wallet with real payments, go on to Lesson 4.4. If you want to run your own node, Lesson 4.5 explains why and what you need.
Key Takeaways
- Phoenix runs a Lightning node on your phone with a single channel to ACINQ, resized by splicing. Fees: 0.4% + 4 sat per payment sent; 1% + mining fees for new liquidity; 1,000 sat to create the channel
- ACINQ can’t spend your Phoenix funds, but it sees the amount of every payment you make and usually the destination too
- Zeus connects to your own LND or CLN node, or runs a Lightning node on your phone (LND with block filters, or LDK): best for people who want more privacy and control than Phoenix gives
- The original Breez app has left the app stores; Breez now focuses on its SDK and publishes Glow, which we have not reviewed
- Fedimint offers federated custody with eCash privacy, a middle ground between a company and full self-custody
- Wallet of Satoshi is the simplest. The company says it is custodial in some regions and self-custodial (Spark) elsewhere, which we have not verified, so check your mode and keep only small amounts in it
- Before the first deposit: write down the recovery words, never run the same wallet on two devices, and treat force close as a last resort
Frequently Asked Questions
Is Phoenix Wallet truly non-custodial?
Yes, with nuances. Your keys stay on your phone, and ACINQ can’t spend or freeze your funds. ACINQ calls Phoenix “trust-minimized, but not trustless”: when an incoming Lightning payment creates or resizes your channel, you trust ACINQ until that on-chain transaction confirms; channels funded by your own on-chain deposit need no such trust (Phoenix FAQ). ACINQ also sees your payments. If ACINQ disappeared for good, force close (see “Before You Put Money In”) would get your funds back on-chain.
Can I switch wallets without losing my bitcoin?
Yes, but not by importing. Lightning channels belong to the node that manages them, and there is no way to move them from one wallet to another. To switch, pay your balance from the old wallet to the new one over Lightning, or send it to the new wallet’s on-chain address. Make sure the old wallet is empty before you delete it.
Why would I choose Zeus over Phoenix if Phoenix is simpler?
Zeus gives you full control of your own node: you choose channels and peers, set routing fees and can route payments for others. Connected to a node you run, your payments don’t depend on a wallet’s LSP, so no single company sees all of them, and you set your own costs. The price is that your node must stay online, updated and backed up. If you don’t run a node, Phoenix is the simpler choice for most people.
What happened to Mutiny Wallet?
Mutiny was a browser-based self-custodial lightning network wallet built on LDK. It shut down at the end of 2024. Its team announced the closure on 5 August 2024 (archived copy), saying a consumer wallet was more than its small team could keep supporting, and that users could self-host the code after the cut-off. The mutinywallet.com site no longer loads (checked 3 Nov 2026), and we no longer cover Mutiny as an option.
Is Fedimint ready for everyday use?
Fedimint works and several communities run live federations. The ecosystem is still young: setting up a federation needs technical skill, and there are fewer apps than for established wallets. If your Bitcoin community has technical members willing to act as guardians, it is a workable option today.
Check Your Understanding
1. Your first-ever Phoenix payment is 20,000 sats over Lightning. Roughly what does receiving it cost, and why?
Answer
Phoenix has to create your channel: 1,000 sats for channel creation, plus 1% of the payment (200 sats), plus the day’s mining fee: 1,200 sats plus the mining fee. If the total would be more than Phoenix’s limit (5,000 sats or 50% of the amount by default), Phoenix returns the payment instead.
2. You value privacy above everything. What do you give up by paying with Phoenix, and what would change if you used Zeus with your own node?
Answer
With Phoenix, ACINQ routes your payments and sees the amount of each one and usually the destination too. With Zeus connected to your own node, no LSP sits in the middle, so no single company sees all your payments. Routing nodes still see roughly how much passes through them, and you take on the work of running and backing up the node.
3. You got a new phone. Can you restore your Phoenix words on it and keep using the old phone too?
Answer
No. Take the old phone offline first (airplane mode, Wi-Fi off), restore on the new one and, once your balance shows there, delete Phoenix from the old phone. Two apps on the same words share the same channels, which can cause problems and channel closures. The 12 words are all you need to restore.