LND Fee Policy Best Practices -- Set Base and Rate Fees Correctly

Setting correct fee policies on your LND channels directly impacts your routing revenue and channel health.

View Current Fee Policies

lncli feereport
lncli getchaninfo <chan_id>

Update Fee Policy

lncli updatechanpolicy \
  --base_fee_msat 1000 \
  --fee_rate 0.000001 \
  --time_lock_delta 40 \
  --chan_point <funding_txid>:<output_index>

Update All Channels at Once

lncli updatechanpolicy \
  --base_fee_msat 1000 \
  --fee_rate 0.000001 \
  --time_lock_delta 40 \
  --global

Recommended Starting Values

base_fee_msat: 0-1000 (0 for competitive routing)
fee_rate: 0.0001-0.001 (10-100 ppm)
time_lock_delta: 40 (standard)

Strategies

Low-fee strategy (volume): base 0, rate 1-5 ppm — attracts more routing, lower margin per payment

High-fee strategy (premium): base 1000+, rate 100+ ppm — fewer routes but higher revenue per hop

Asymmetric fees: set low fees on inbound-heavy channels to encourage outflow, high fees on outbound-heavy channels

Automate with charge-lnd

# Install
pip install charge-lnd

# Run with config
charge-lnd -c /path/to/charge.conf

Common Mistake

Setting fee_rate too high on new channels with no routing history. Start low to attract traffic, then adjust based on actual flow data.