Oddbean new post about login | logout Just use real BTC if you're only hodling the Liquid...
If you don't want to keep a lot of sats on custodial lightning but you want cheap access to liquidity in a high fee environment, you use liquid.
1M sats or more on chain. Tolerance for custodial lightning is somewhere below 1M sats. Using Liquid as a buffer for these ranges is a mental burden and costs you swapping fees. High fee environment doesn't affect you much bc you only need to top up your lightning wallet every few weeks.
I wouldn't keep more than 100k in custodial lightning.
Ok then it makes sense. But I suggest you to use Phoenix instead of this Liquid buffer solution. Yes the fees to transact are a bit higher than Liquid tx + Swap fees, but I don't have to deal with liquidity management as you do. I just top up Phoenix every 3 months or so with a big UTXO and then don't have to worry about swapping around funds.
I'm surprised by this since you think having 5M sats on Liquid is ok, which is also custodial. nostr:nevent1qqszhxkl3sxk9yjttzdzmh4fnvnnuz9m9kw228p8m0s9y759ggg88nqzyqt0rgqsp4x0l77vggcw3c8y9yxvtpyurtwxf4n98ldq0sp3kyr5kqcyqqqqqqgpr3mhxue69uhkummnw3ezucnfw33k76twv4ezuum0vd5kzmq69uezl
Liquid isn't custodial. It self custody on a federated chain. That's way different.
Self custody of Bitcoin IOUs. At the end I can still get rugged.
If you know the trust model of liquid, you know the chances of a liquid rug are near zero. But yes. This is why I advocate for layers of trust. Pocket change -> custodial lightning, a few million sats of liquidity -> liquid, cold storage -> on chain. This is the cheapest way to use Bitcoin in any way you need at any time you need it.