Lightning Labs Loop
by Lightning Labs
Bitcoin
Quick Fact
Loop introduced multi-path payments in May 2020, enabling users to aggregate funds across multiple Lightning channels into a single on-chain transaction, boosting swap limits from ~0.042 BTC to 0.1 BTC per transaction — for greater efficiency and lower fees
Loop is a non-custodial, automated liquidity service developed by Lightning Labs to help users manage inbound and outbound liquidity on the Bitcoin Lightning Network. Loop allows users to move funds seamlessly between the Lightning Network and the Bitcoin base layer without closing payment channels—maintaining uptime and minimizing fees.
As part of Lightning Labs’ broader suite of tools, Loop is designed for node operators, service providers, and developers who require reliable, efficient liquidity management within a non-custodial framework.
What Loop Does
Loop performs submarine swaps—trustless on-chain/off-chain transactions—allowing users to:
Loop Out: Move funds from Lightning channels to on-chain Bitcoin, freeing up inbound liquidity while keeping channels open.
Loop In: Add funds to a Lightning channel using on-chain Bitcoin, increasing outbound capacity without disrupting existing infrastructure.
AutoLoop: An automated daemon that monitors liquidity conditions and triggers swaps based on customizable rules.
These operations are conducted securely using hash time-locked contracts (HTLCs), ensuring atomic execution with no need for custodians.
Core Features
Non-Custodial: Users retain full control of their funds throughout the process—Loop never holds custody of Bitcoin or channel balances.
Channel Preservation: Funds are moved without closing or recreating channels, preserving node reputation and routing reliability.
Liquidity Automation: AutoLoop dynamically rebalances channels based on real-time conditions and policies defined by the user.
Integration Ready: Loop integrates natively with Lightning Terminal (LiT) for a graphical interface and also supports command-line use and APIs for backend deployments.
Technical Scope
Blockchain Support: Native to Bitcoin and the Lightning Network, compatible with Bitcoin backends like Bitcoin Core, btcd, and Neutrino, not designed for use with Ethereum or non-Bitcoin blockchains
Swap Execution: Loop uses HTLC-based submarine swaps, ensuring that funds either settle as intended or the transaction fails safely—no counterparty risk.
Swap Limits: Recent upgrades support multi-path payments (MPP), increasing the maximum swap size to ~0.1 BTC and reducing costs via batching.
Why Loop Matters
The Lightning Network enables near-instant, low-cost Bitcoin transactions—but keeping channels properly funded can be a challenge. Loop addresses this by offering a user-friendly, automated, and decentralized solution to liquidity rebalancing.
For developers and businesses, Loop reduces the operational complexity of channel management, improves reliability, and helps ensure that routing nodes stay liquid and profitable. For end users, it offers greater privacy, uptime, and autonomy when using Bitcoin via Lightning.