Lightning Splicing Splicing modifies a channel's funding tx (and capacity) without closing the channel. Atomic: previous channel state continues with new funding output. Pre-splicing, capacity changes meant close + reopen, costing two on-chain txs and disrupting payment flow. Mechanics A splice transaction: - Spends the current channel's funding output. - Adds new inputs (splice-in) or outputs (splice-out). - Creates a new funding output with updated capacity. - Both parties sign. Channel state continues: existing HTLCs, balances, fees all remain. After confirmation, the new funding output be…