What are the best practices to close and reopen channels in order to increase capacity

Question

I am new in the lightning so I opened a small channel with 50k sats to get started. After some research and try-and-error I would like to increase the capacity of this channel. I know that this is not possible and the only way to do that is to close the channel and open a new one since having a double channel with the same node is not recommended. In the meanwhile a payment has been routed with this channel, so my local balance is 10k sats and in the remote balance is 30k (10k sats are gone on fees). If I close the channel now I will only get 10k sats minus fees. I will lose more than 80% of my initial amount!

The only thing I can think of is doing a rebalance of the channel so the most of the capacity is on my side and then close the channel. But since it only has 50k sats I cannot do a loop in (minimum 250k sats), or balance of satoshi (minimum 50k sats). Circular rebalance fails all the time. As an alternative I can create an invoice and route it to my self as described here (https://github.com/lightningnetwork/lnd/pull/3736).

But is it ok what I am doing? Is there a cheaper (smarter) way?

Answer 1

Routing a payment will not change your node's balance, it will just change the balance of each specific channel you have open (resulting in a net ~zero change in overall balance). You may have pushed 30k sats to the remote node's balance, but you would have simultaneously had 30k sats pushed to your node's balance in one of your other channels. You haven't lost any of the initial amount, it is just present in a different channel now.

So if you want more capacity, then you should just close that channel, and re-open a new one with the desired liquidity.

To save some money, try to do this while the network isn't busy (ie, the mempool is relatively empty).