So.... Is Muun wallet custodial?

[Beetkoin]

I just transferred 5 sats from my BlueWallet to my newly created Muun wallet. Cost was 1 sat, instantenous.

BlueWallet I think understand. It is custodial. But Muun wallet.... I thought it was non-custodial? Meaning I need to open a channel, i.e. do a on-chain transaction, before receiving fund via lightning?

This makes me confused. How is this possible in a non-custodial muun wallet?

I feel apprehensive about using Muun wallet. No clear distinction between Lightning balance and on chain balance. A bit too user friendly. For a non-material bearer asset like BTC (first time in human history), a bit more DIY is needed IMO.

Now, BlueWallet is also very user friendly. But they are upfront about being custodial, and also very clear distinction between lightning and onchain.

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[BlackHatCoiner]

BlueWallet is custodial only if you connect to another person's LNHub. If you run your own, it's as non-custodial as your on-chain wallets. To run your own LNHub, it's quite fuss, but bitcoin node OSes such as Umbrel have it preinstalled.

If you want to be non-custodial in the lightning network, you'll have to be aware of all these tech-stuff such as being aware of your channels' capacity, connectivity etc.

[dkbit98]

BlueWallet I think understand. It is custodial. But Muun wallet.... I thought it was non-custodial? Meaning I need to open a channel, i.e. do a on-chain transaction, before receiving fund via lightning?

Muun wallet is open source and self-custodial, and I think they are combining both on-chain transactions and lightning payments in one address.
It's not as simple as other bitcoin wallets and they don't even use only mnemonic code, but they combine something called emergency kit and recovery code.
I think their concept is still early and has some flaws, but I respect they were one of the first wallets to implement Taproot support (maybe because they need it the most).
If you really want to understand Muun wallet better than you need to read their documentation and test it for yourself.

Now, BlueWallet is also very user friendly. But they are upfront about being custodial, and also very clear distinction between lightning and onchain.

BlueWallet is very user friendly and easy to use even for beginners, but if you are advanced user you can also use it with your own Lightning Node.
One more advantage is that you can easily connect Blue Wallet with other hardware wallets, and I am not sure this is even possible with Muun wallet.

[libert19]

It's non custodial: https://github.com/muun/recovery

[n0nce]

It's non custodial: https://github.com/muun/recovery

That's correct; but I understand and share OP's concerns that it gives you very little control and overview of what is happening behind the scenes.

This is why I prefer to use Breez and Phoenix. Especially Breez, since it has a full on 'developer menu'. In case you want / need to intervene manually, it displays all of the lnd commands and you can execute them with any arguments you want, as if sitting at a shell connected to a Linux PC running lnd directly. Very neat.

Even though Breez offers this level of manual control, it's still very usable for newbies, manages channels automatically and everything like that. So it's really kind of the 'best of both worlds'.

[nullama]

It's non custodial: https://github.com/muun/recovery

That's correct; but I understand and share OP's concerns that it gives you very little control and overview of what is happening behind the scenes.

This is why I prefer to use Breez and Phoenix. Especially Breez, since it has a full on 'developer menu'. In case you want / need to intervene manually, it displays all of the lnd commands and you can execute them with any arguments you want, as if sitting at a shell connected to a Linux PC running lnd directly. Very neat.

Even though Breez offers this level of manual control, it's still very usable for newbies, manages channels automatically and everything like that. So it's really kind of the 'best of both worlds'.

Breez and Phoenix are great, but for an absolute newbie with 0 sats wanting to get a couple of sats through lightning muun is the only non-custodial option that actually works in that case.

Phoenix has a 1% fee with a minimum of 3k sats for channel creation: (and the first deposit on an empty wallet must be at least 10k sats)



Breez has a 2k sats fee for channel creation:



In the case of muun you're able to receive a few sats for free from a new wallet with 0 sats in it initially:

[n0nce]

Breez and Phoenix are great, but for an absolute newbie with 0 sats wanting to get a couple of sats through lightning muun is the only non-custodial option that actually works in that case.

Interesting; Breez once was free deposit as well. I remember asking them how they're paying for that / how it makes financial sense and they said it was only like that for the beginning and it was subject to change.

To be honest - and I'm going on a tangent here again, sorry for that - 2,000 sats is right now around $1 and while less magical than anything 'free', it teaches somehow the right lesson. 'There is no free lunch' is an important part of Bitcoin for me, so in a way it's not wrong that newbies are shown right in the beginning that over here we do pay for e.g. securing our seeds, creating payment networks and stuff like that. But compared to fiat land, we don't pay with our souls by handing over KYC to banks or having our purchasing history data milked by credit card and reward card companies.

Keep in mind (at least last I tried), muun puts a large portion of funds on-chain as soon as it reaches some threshold. It's also not visible anywhere what portion is allocated how, so you can end up sending 100,000 sats via LN to muun and then not be able to send 50,000 out to another LN wallet at super low fees + fast speed, which is something you'd expect from a LN wallet. However, it may be indeed better for very small amounts due to no setup fee. But I'd recommend to send those sats to Breez or anything like that once they start to stack a bit more.
This may all have changed; but still not being able to see which portion is on-chain and which is in LN makes me uncomfortable using muun.

You could seriously also just onboard new users through BlueWallet. It has no channel setup fees; sure it's custodial, but we're talking about people who don't have 2,000 sats to open a channel. There's not much to lose there. And it allows them to create non-custodial Bitcoin wallets in the same app, buy Bitcoin in the same app and also to send those Bitcoin into their LN wallet from that same app.

[sir_danny]

It's self-custodial, but unfortunately, non-reproducible from source.



Source: Muun wallet in walletscrutiny.com