Splice-Out

Splice-out is the act of moving bitcoin out of an open Lightning channel to an on-chain address in a single cooperative transaction, while keeping the channel operational. It is the mirror image of splice-in: instead of adding capacity, it withdraws some of the channel's balance on-chain and leaves the channel running at a reduced size. This replaces the old, costly pattern of closing a channel just to free up some of its funds.

Spending the funding output

The two peers build a transaction that spends the channel's existing funding output, sends part of the value to an external on-chain destination, and routes the remainder into a new, smaller funding output that the channel continues from. Because the channel is never closed, its off-chain state and history persist, and operation resumes immediately rather than waiting through a full close-and-reopen cycle.

Practical uses

Splice-out lets a node operator pay an on-chain expense, sweep accumulated routing revenue to cold storage, or right-size an over-funded channel, all without sacrificing the channel or paying for two separate on-chain transactions. For sovereign Bitcoiners this preserves channel uptime and reputation while still giving direct access to on-chain liquidity when it is needed.

Splice-out is the capacity-reducing counterpart to our splice-in entry, and like all splices it rewrites the funding output of the underlying payment channel.