Bitcoin Lightning Network capacity surges after Phoenix 2.0 debut

Capacity surges and institutional liquidity

Lightning capacity reached 5,637 BTC, which surpassed the previous peak from March 2023. This surge followed a year of declining capacity throughout 2025. Data from October 12, 2026, shows public capacity at 3,569.39 BTC across 33,290 channels and 12,594 nodes. While the network saw capacity climb to 5,637 BTC in late 2025, the number of active nodes dropped to 17,438 from a previous high of 20,700, which suggests a consolidation of capital into fewer, more efficient operators. Major exchanges like Binance and OKX deposited significant BTC into Lightning channels recently. These institutional deposits contrast with the slower adoption among individual users. Lightning currently holds 14,940 nodes according to Bitcoin Visuals, which is below the 20,700 peak from early 2022. Total channels sit at 48,678, which is also below historical highs. The gap between increasing capital and stagnant user counts shows a network that grows more capitalized without attracting more users. Monthly transaction volume crossed $1.17 billion in November 2025, and monthly transactions reached 12 million by late 2025. The network also shows growth in El Salvador, where the Chivo wallet processed 4.2 million Lightning transactions during 2025. In Africa, Bitnob manages Lightning-based salary payments for workers in 23 countries, and it saw a 340% year-over-year transaction volume growth. The network capacity grew by 12.5 BTC per day on average during the three months leading up to the capacity surge.

Trampoline routing and user experience

ACINQ uses trampoline routing in the Phoenix wallet to reduce the computational load on mobile devices. The sender’s wallet sends a multi-part payment to an ACINQ node. This node aggregates the incoming partial payments, unwraps the trampoline onion, and forwards the payment to the final recipient. If the recipient uses another Phoenix wallet, ACINQ forwards the payment or uses pay-to-open. If the recipient does not support trampoline, ACINQ finds a route the old way. You need to understand the privacy trade-offs when using mobile wallets. ACINX learns both the payer and the recipient of these trampoline payments. This is a liability for users who prioritize anonymity. The implementation of trampoline routing shifts complexity from the user’s device to intermediary nodes. This method allows the network to scale without making it impractical to run a node on a phone. Because the ACINQ node must be able to forward your payment to any node in the network, it collects a small fee for its routing work. Phoenix estimates this total fee to be 10 times the routing fee applied by ACINQ, where the ACINQ fee is 1 sat plus 0.01% of the amount sent. Version 1.2.0 of the wallet allows it to start with a low fee and then retry on failures by raising the fee for each attempt.

Will the reliance on a few large trampoline nodes eventually lead to a centralized bottleneck?

Protocol advancements and stablecoin flows

Taproot Assets v0.7 arrived in December 2025 and added reusable addresses and auditable asset supplies. This protocol allows stablecoins to use Bitcoin security while benefiting from Lightning speed. Tether integrated USDT support on Lightning in March 2026. Early adoption occurs through wallets such as Speed Wallet and LnFi. Lightning Labs released version 0.7 of Taproot Assets to support larger, more reliable transactions. On January 28, 2026, SDM sent $1 million to Kraken via the Lightning Network. This transaction used Voltage’s managed node infrastructure to handle the institutional volume and was the first publicly disclosed seven-figure payment on the protocol. Most Bitcoin withdrawals from Coinbase used Lightning after the mid-2024 integration. BOLT12 merged into the specification in September 2024 and replaces one-time BOLT11 invoices with reusable offers. Core Lightning, LDK, and Eclair support BOLT12, but LND requires the LNDK sidecar daemon to access offers. Splicing allows nodes to resize channels without closing them. Core Lightning enabled splicing by default in 2026. LDK added splice-out support via production bit 63. Taproot Assets enables assets like USDT and USDC to move over existing Lightning rails. This capability provides a way to bypass Ethereum-based stablecoin networks. Block rolled out Lightning payments to its 4 million US point-of-sale hardware merchants at the end of 2025.

Implementation security and regional growth

Implementation security varies across the network. Lightning Dev Kit patched a funds-theft reconnect flaw on October 1, 2026, with versions v0.2.7 and v0.1.13. Core Lightning released v26.06.7 on September 27, 2026, to fix a revoked-state penalty bug. Core Lightning released v26.06.9 on October 7, 2026, to fix a payment-delay regression. Managing a node requires constant activity. Operators must rebalance channels, monitor for force closes, and set routing fees. Force closes lock funds for days or weeks and incur on-chain fees. Many operators lost money because of force closes. Phoenix Wallet remains absent from US app stores since its May 2024 removal. LND’s v0.20 release migrated the channel graph to SQL, which reduced query execution time by 95% to 99%. LDK is the foundation for a new generation of mobile and embedded wallets, including Breez SDK integrations. LND commands the majority of public Lightning nodes because it ships with packages like Umbrel and RaspiBlitz. However, LND lacks native BOLT12 support, which creates friction as the rest of the ecosystem moves toward offers. Machankura provides Lightning payments via USSD and SMS for users in Ghana, Kenya, Malawi, Nigeria, South Africa, and Uganda. CoinGate reported that Lightning accounted for over 16% of all Bitcoin orders on its platform in 2024. The Nostr protocol’s zaps passed 5 million cumulative transactions in May 2025.