LND Channel Reserve Issues -- Cannot Send Due to Reserve

Each LND channel holds a channel reserve — a small amount that cannot be spent. This prevents fraud but causes confusing payment failures.

What is Channel Reserve?

By default LND reserves 1% of channel capacity on each side. This amount can never be sent.

Common Error

payment failed: insufficient balance
# Even though walletbalance shows funds

Check Your Reserves

lncli listchannels | grep local_balance
lncli channelbalance

Why Spendable < Local Balance

local_balance: 100000 sats
reserve: 1000 sats
commit_fee: ~300 sats
spendable: ~98700 sats

Solutions

1. Open larger channels — 1% reserve is proportionally smaller

2. Use multiple channels with MPP to split payments

3. Design payment flows assuming ~1-2% is always reserved

Summary

Channel reserve is intentional. If payments fail due to reserve, open larger channels or enable MPP.