Third-parties take care of this bureaucracy for you. Check out the Phoenix wallet, for example.

(Unaffiliated, I hold some pocket money on there not to run a Lightning node myself)

The on-chain transaction is just to "fund" a channel between two parties. These two parties can then make unlimited trasnfers between each other instantaneously for free. These nodes are organised in a network and can relay payment from other nodes as well. It's a bit like the Internet. You don't need to peer with everybody, you just need a path from A to B.

If you and I have a channel funded with 100 sat, we can move these around as many times as we wish, even on behalf of others, but if you need to transfer more than you have on your side, you need to fund the channel with another on-chain transaction. That's where the Phoenix 1% fee comes from, as they deal with this exact problem for you, so you don't have to worry about it.

>Third-parties take care of this bureaucracy for you. Check out the Phoenix wallet, for example.

Sort of defeats the purpose then, doesn't it? Why not just make lightning payments directly from your bitcoin exchange?

Ah, I see