Onchain interaction with your node.
The Lightning Network relies on the Bitcoin protocol to operate, so it is important to understand how your Lightning Node interacts with it. The Bitcoin network is often called “Layer one” and the Lightning Network, “Layer two.” Your Lightning Node has an on-chain wallet built into it. This wallet allows you to send and receive bitcoin as you normally would. The channels that you will inevitably open are funded by this on-chain wallet. When your channels close, this wallet is also where the funds on your side of the closed channel will appear after confirmation. This wallet is a hot wallet, as well, meaning the keys are stored on an online accessible device. Take your security seriously if you are running your node at home. Have passwords, configurations, etc.. set up and stored safely.
For LND, there is no coin control for your on-chain wallet. You cannot pick and choose which UTXOs are combined when opening channels. For privacy-conscious users, this means you will have to be very careful if you are trying to avoid combining UTXOs during channel opens. If opening from coinjoin, it may be wise to send the exact amount of funds to the Lightning node on-chain wallet that you plan to open a channel with, rather than a large sum, to avoid combining UTXOs. If there is a change output after a channel opens, consider sending it to an address you control that allows coin control before opening a new channel.
Your node’s seed phrase that you wrote down during your node’s initial setup will help you recover these on-chain funds should your node fail. The seed phrase provided to you from your LND node cannot be recovered on any other wallet such as electrum or Blockstream green. Any failed LND node funds must be recovered on another LND instance.