The seed phrase uses an AEZeed standard in many Lightning wallets, and can be used to restore funds that were in the BTC wallet on your node. The seed phrase backup does not restore funds you had in Lightning channels.
If you no longer have access to your seed phrase, but your node is up and running, you should do the following as soon as possible:
- Close any open Lightning channels you have and wait for the channels to fully close and wait for the on-chain transaction back to your node's BTC key to confirm on the blockchain (this may take 24 hours or more).
- Withdraw any remaining BTC funds from your node so that both your node and the Lightning channels on your node have a zero balance.
- Do a "Factory Reset" of your node.
I do want to reiterate that doing a Factory Reset will wipe all data regarding both the BTC funds on your node's BTC key as well as any funds you may have in Lightning channels.
To do a factory reset, you can click "Settings" in the "System" window of your dashboard, then click "Factory Reset." This will wipe your node and reinstall the software. Blockchain data persists, so your node should not have to re-sync the Bitcoin blockchain from scratch.
Once the reset is complete, set up your node again with the new seed phrase.
Keep that seed phrase backup somewhere secure and secret this time!