diff --git a/channeldb/edge_policy.go b/channeldb/edge_policy.go
index 49edd18e1..8d507a49d 100644
--- a/channeldb/edge_policy.go
+++ b/channeldb/edge_policy.go
@@ -1,6 +1,7 @@
 package channeldb
 
 import (
+	"bufio"
 	"bytes"
 	"encoding/binary"
 	"errors"
@@ -12,6 +13,30 @@ import (
 	"github.com/lightningnetwork/lnd/channeldb/models"
 	"github.com/lightningnetwork/lnd/kvdb"
 	"github.com/lightningnetwork/lnd/lnwire"
+	"github.com/lightningnetwork/lnd/tlv"
+)
+
+const (
+	EdgePolicy2MsgType = tlv.Type(0)
+	EdgePolicy2ToNode  = tlv.Type(1)
+
+	// chanEdgePolicyNewEncodingPrefix is a byte used in the channel edge
+	// policy encoding to signal that the new style encoding which is
+	// prefixed with a type byte is being used instead of the legacy
+	// encoding which would start with 0x02 due to the fact that the
+	// encoding would start with a DER encoded ecdsa signature.
+	chanEdgePolicyNewEncodingPrefix = 0xff
+)
+
+// edgePolicyEncoding indicates how the bytes for a channel edge policy have
+// been serialised.
+type edgePolicyEncodingType uint8
+
+const (
+	// edgePolicy2EncodingType will be used as a prefix for edge policies
+	// advertised using the ChannelUpdate2 message. The type indicates how
+	// the bytes following should be deserialized.
+	edgePolicy2EncodingType edgePolicyEncodingType = 0
 )
 
 func putChanEdgePolicy(edges kvdb.RwBucket, edge *models.ChannelEdgePolicy1,
@@ -63,7 +88,14 @@ func putChanEdgePolicy(edges kvdb.RwBucket, edge *models.ChannelEdgePolicy1,
 			return err
 		}
 
-		oldUpdateTime := uint64(oldEdgePolicy.LastUpdate.Unix())
+		oldPol, ok := oldEdgePolicy.(*models.ChannelEdgePolicy1)
+		if !ok {
+			return fmt.Errorf("expected "+
+				"*models.ChannelEdgePolicy1, got: %T",
+				oldEdgePolicy)
+		}
+
+		oldUpdateTime := uint64(oldPol.LastUpdate.Unix())
 
 		var oldIndexKey [8 + 8]byte
 		byteOrder.PutUint64(oldIndexKey[:8], oldUpdateTime)
@@ -169,7 +201,13 @@ func fetchChanEdgePolicy(edges kvdb.RBucket, chanID []byte,
 		return nil, err
 	}
 
-	return ep, nil
+	pol, ok := ep.(*models.ChannelEdgePolicy1)
+	if !ok {
+		return nil, fmt.Errorf("expected *models.ChannelEdgePolicy1, "+
+			"got: %T", ep)
+	}
+
+	return pol, nil
 }
 
 func fetchChanEdgePolicies(edgeIndex kvdb.RBucket, edges kvdb.RBucket,
@@ -201,8 +239,56 @@ func fetchChanEdgePolicies(edgeIndex kvdb.RBucket, edges kvdb.RBucket,
 	return edge1, edge2, nil
 }
 
-func serializeChanEdgePolicy(w io.Writer, edge *models.ChannelEdgePolicy1,
-	to []byte) error {
+func serializeChanEdgePolicy(w io.Writer,
+	edgePolicy models.ChannelEdgePolicy, toNode []byte) error {
+
+	var (
+		withTypeByte bool
+		typeByte     edgePolicyEncodingType
+		serialize    func(w io.Writer) error
+	)
+
+	switch policy := edgePolicy.(type) {
+	case *models.ChannelEdgePolicy1:
+		serialize = func(w io.Writer) error {
+			copy(policy.ToNode[:], toNode)
+
+			return serializeChanEdgePolicy1(w, policy)
+		}
+	case *models.ChannelEdgePolicy2:
+		withTypeByte = true
+		typeByte = edgePolicy2EncodingType
+
+		serialize = func(w io.Writer) error {
+			copy(policy.ToNode[:], toNode)
+
+			return serializeChanEdgePolicy2(w, policy)
+		}
+	default:
+		return fmt.Errorf("unhandled implementation of "+
+			"ChannelEdgePolicy: %T", edgePolicy)
+	}
+
+	if withTypeByte {
+		// First, write the identifying encoding byte to signal that
+		// this is not using the legacy encoding.
+		_, err := w.Write([]byte{chanEdgePolicyNewEncodingPrefix})
+		if err != nil {
+			return err
+		}
+
+		// Now, write the encoding type.
+		_, err = w.Write([]byte{byte(typeByte)})
+		if err != nil {
+			return err
+		}
+	}
+
+	return serialize(w)
+}
+
+func serializeChanEdgePolicy1(w io.Writer,
+	edge *models.ChannelEdgePolicy1) error {
 
 	err := wire.WriteVarBytes(w, 0, edge.SigBytes)
 	if err != nil {
@@ -241,7 +327,7 @@ func serializeChanEdgePolicy(w io.Writer, edge *models.ChannelEdgePolicy1,
 		return err
 	}
 
-	if _, err := w.Write(to); err != nil {
+	if _, err := w.Write(edge.ToNode[:]); err != nil {
 		return err
 	}
 
@@ -271,7 +357,36 @@ func serializeChanEdgePolicy(w io.Writer, edge *models.ChannelEdgePolicy1,
 	return nil
 }
 
-func deserializeChanEdgePolicy(r io.Reader) (*models.ChannelEdgePolicy1, error) {
+func serializeChanEdgePolicy2(w io.Writer,
+	edge *models.ChannelEdgePolicy2) error {
+
+	if len(edge.ExtraOpaqueData) > MaxAllowedExtraOpaqueBytes {
+		return ErrTooManyExtraOpaqueBytes(len(edge.ExtraOpaqueData))
+	}
+
+	var b bytes.Buffer
+	if err := edge.Encode(&b, 0); err != nil {
+		return err
+	}
+
+	msg := b.Bytes()
+
+	records := []tlv.Record{
+		tlv.MakePrimitiveRecord(EdgePolicy2MsgType, &msg),
+		tlv.MakePrimitiveRecord(EdgePolicy2ToNode, &edge.ToNode),
+	}
+
+	stream, err := tlv.NewStream(records...)
+	if err != nil {
+		return err
+	}
+
+	return stream.Encode(w)
+}
+
+func deserializeChanEdgePolicy(r io.Reader) (models.ChannelEdgePolicy,
+	error) {
+
 	// Deserialize the policy. Note that in case an optional field is not
 	// found, both an error and a populated policy object are returned.
 	edge, deserializeErr := deserializeChanEdgePolicyRaw(r)
@@ -284,7 +399,45 @@ func deserializeChanEdgePolicy(r io.Reader) (*models.ChannelEdgePolicy1, error)
 	return edge, deserializeErr
 }
 
-func deserializeChanEdgePolicyRaw(r io.Reader) (*models.ChannelEdgePolicy1,
+func deserializeChanEdgePolicyRaw(reader io.Reader) (models.ChannelEdgePolicy,
+	error) {
+
+	// Wrap the io.Reader in a bufio.Reader so that we can peak the first
+	// byte of the stream without actually consuming from the stream.
+	r := bufio.NewReader(reader)
+
+	firstByte, err := r.Peek(1)
+	if err != nil {
+		return nil, err
+	}
+
+	if firstByte[0] != chanEdgePolicyNewEncodingPrefix {
+		return deserializeChanEdgePolicy1Raw(r)
+	}
+
+	// Pop the encoding type byte.
+	var scratch [1]byte
+	if _, err = r.Read(scratch[:]); err != nil {
+		return nil, err
+	}
+
+	// Now, read the encoding type byte.
+	if _, err = r.Read(scratch[:]); err != nil {
+		return nil, err
+	}
+
+	encoding := edgePolicyEncodingType(scratch[0])
+	switch encoding {
+	case edgePolicy2EncodingType:
+		return deserializeChanEdgePolicy2Raw(r)
+
+	default:
+		return nil, fmt.Errorf("unknown edge policy encoding type: %d",
+			encoding)
+	}
+}
+
+func deserializeChanEdgePolicy1Raw(r io.Reader) (*models.ChannelEdgePolicy1,
 	error) {
 
 	edge := &models.ChannelEdgePolicy1{}
@@ -370,3 +523,41 @@ func deserializeChanEdgePolicyRaw(r io.Reader) (*models.ChannelEdgePolicy1,
 
 	return edge, nil
 }
+
+func deserializeChanEdgePolicy2Raw(r io.Reader) (*models.ChannelEdgePolicy2,
+	error) {
+
+	var (
+		msgBytes []byte
+		toNode   [33]byte
+	)
+
+	records := []tlv.Record{
+		tlv.MakePrimitiveRecord(EdgePolicy2MsgType, &msgBytes),
+		tlv.MakePrimitiveRecord(EdgePolicy2ToNode, &toNode),
+	}
+
+	stream, err := tlv.NewStream(records...)
+	if err != nil {
+		return nil, err
+	}
+
+	err = stream.Decode(r)
+	if err != nil {
+		return nil, err
+	}
+
+	var (
+		chanUpdate lnwire.ChannelUpdate2
+		reader     = bytes.NewReader(msgBytes)
+	)
+	err = chanUpdate.Decode(reader, 0)
+	if err != nil {
+		return nil, err
+	}
+
+	return &models.ChannelEdgePolicy2{
+		ChannelUpdate2: chanUpdate,
+		ToNode:         toNode,
+	}, nil
+}
diff --git a/channeldb/edge_policy_test.go b/channeldb/edge_policy_test.go
new file mode 100644
index 000000000..16f03c554
--- /dev/null
+++ b/channeldb/edge_policy_test.go
@@ -0,0 +1,174 @@
+package channeldb
+
+import (
+	"bytes"
+	"math/rand"
+	"reflect"
+	"testing"
+	"testing/quick"
+	"time"
+
+	"github.com/lightningnetwork/lnd/channeldb/models"
+	"github.com/lightningnetwork/lnd/lnwire"
+	"github.com/lightningnetwork/lnd/tlv"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+// TestEdgePolicySerialisation tests the serialisation and deserialization logic
+// for models.ChannelEdgePolicy.
+func TestEdgePolicySerialisation(t *testing.T) {
+	t.Parallel()
+
+	mainScenario := func(info models.ChannelEdgePolicy) bool {
+		var (
+			b      bytes.Buffer
+			toNode = info.GetToNode()
+		)
+
+		err := serializeChanEdgePolicy(&b, info, toNode[:])
+		require.NoError(t, err)
+
+		newInfo, err := deserializeChanEdgePolicy(&b)
+		require.NoError(t, err)
+
+		return assert.Equal(t, info, newInfo)
+	}
+
+	tests := []struct {
+		name     string
+		genValue func([]reflect.Value, *rand.Rand)
+		scenario any
+	}{
+		{
+			name: "ChannelEdgePolicy1",
+			scenario: func(m models.ChannelEdgePolicy1) bool {
+				return mainScenario(&m)
+			},
+			genValue: func(v []reflect.Value, r *rand.Rand) {
+				//nolint:lll
+				policy := &models.ChannelEdgePolicy1{
+					ChannelID:                 r.Uint64(),
+					LastUpdate:                time.Unix(r.Int63(), 0),
+					MessageFlags:              lnwire.ChanUpdateMsgFlags(r.Uint32()),
+					ChannelFlags:              lnwire.ChanUpdateChanFlags(r.Uint32()),
+					TimeLockDelta:             uint16(r.Uint32()),
+					MinHTLC:                   lnwire.MilliSatoshi(r.Uint64()),
+					FeeBaseMSat:               lnwire.MilliSatoshi(r.Uint64()),
+					FeeProportionalMillionths: lnwire.MilliSatoshi(r.Uint64()),
+					ExtraOpaqueData:           make([]byte, 0),
+				}
+
+				policy.SigBytes = make([]byte, r.Intn(80))
+				_, err := r.Read(policy.SigBytes)
+				require.NoError(t, err)
+
+				_, err = r.Read(policy.ToNode[:])
+				require.NoError(t, err)
+
+				numExtraBytes := r.Int31n(1000)
+				if numExtraBytes > 0 {
+					policy.ExtraOpaqueData = make(
+						[]byte, numExtraBytes,
+					)
+					_, err := r.Read(
+						policy.ExtraOpaqueData,
+					)
+					require.NoError(t, err)
+				}
+
+				// Sometimes add an MaxHTLC.
+				if r.Intn(2)%2 == 0 {
+					policy.MessageFlags |=
+						lnwire.ChanUpdateRequiredMaxHtlc
+					policy.MaxHTLC = lnwire.MilliSatoshi(
+						r.Uint64(),
+					)
+				} else {
+					policy.MessageFlags ^=
+						lnwire.ChanUpdateRequiredMaxHtlc
+				}
+
+				v[0] = reflect.ValueOf(*policy)
+			},
+		},
+		{
+			name: "ChannelEdgePolicy2",
+			scenario: func(m models.ChannelEdgePolicy2) bool {
+				return mainScenario(&m)
+			},
+			genValue: func(v []reflect.Value, r *rand.Rand) {
+				policy := &models.ChannelEdgePolicy2{
+					//nolint:lll
+					ChannelUpdate2: lnwire.ChannelUpdate2{
+						Signature:       testSchnorrSig,
+						ExtraOpaqueData: make([]byte, 0),
+					},
+					ToNode: [33]byte{},
+				}
+
+				policy.ShortChannelID.Val = lnwire.NewShortChanIDFromInt( //nolint:lll
+					uint64(r.Int63()),
+				)
+				policy.BlockHeight.Val = r.Uint32()
+				policy.HTLCMaximumMsat.Val = lnwire.MilliSatoshi( //nolint:lll
+					r.Uint64(),
+				)
+				policy.HTLCMinimumMsat.Val = lnwire.MilliSatoshi( //nolint:lll
+					r.Uint64(),
+				)
+				policy.CLTVExpiryDelta.Val = uint16(r.Int31())
+				policy.FeeBaseMsat.Val = r.Uint32()
+				policy.FeeProportionalMillionths.Val = r.Uint32() //nolint:lll
+
+				if r.Intn(2) == 0 {
+					policy.SecondPeer = tlv.SomeRecordT(
+						tlv.ZeroRecordT[tlv.TlvType8, lnwire.TrueBoolean](), //nolint:lll
+					)
+				}
+
+				// Sometimes set the incoming disabled flag.
+				if r.Int31()%2 == 0 {
+					policy.DisabledFlags.Val |=
+						lnwire.ChanUpdateDisableIncoming
+				}
+
+				// Sometimes set the outgoing disabled flag.
+				if r.Int31()%2 == 0 {
+					policy.DisabledFlags.Val |=
+						lnwire.ChanUpdateDisableOutgoing
+				}
+
+				_, err := r.Read(policy.ToNode[:])
+				require.NoError(t, err)
+
+				numExtraBytes := r.Int31n(1000)
+				if numExtraBytes > 0 {
+					policy.ExtraOpaqueData = make(
+						[]byte, numExtraBytes,
+					)
+					_, err := r.Read(
+						policy.ExtraOpaqueData,
+					)
+					require.NoError(t, err)
+				}
+
+				v[0] = reflect.ValueOf(*policy)
+			},
+		},
+	}
+
+	for _, test := range tests {
+		test := test
+		t.Run(test.name, func(t *testing.T) {
+			t.Parallel()
+
+			config := &quick.Config{
+				Values: test.genValue,
+			}
+
+			err := quick.Check(test.scenario, config)
+			require.NoError(t, err)
+		})
+	}
+}
diff --git a/channeldb/graph.go b/channeldb/graph.go
index 89e777628..f855fa2fc 100644
--- a/channeldb/graph.go
+++ b/channeldb/graph.go
@@ -311,7 +311,13 @@ func (c *ChannelGraph) getChannelMap(edges kvdb.RBucket) (
 			return err
 		}
 
-		channelMap[key] = edge
+		e, ok := edge.(*models.ChannelEdgePolicy1)
+		if !ok {
+			return fmt.Errorf("expected "+
+				"*models.ChannelEdgePolicy1, got: %T", edge)
+		}
+
+		channelMap[key] = e
 
 		return nil
 	})
@@ -2387,7 +2393,14 @@ func (c *ChannelGraph) FilterChannelRange(startHeight,
 					return err
 				}
 
-				chanInfo.Node1UpdateTimestamp = edge.LastUpdate
+				e, ok := edge.(*models.ChannelEdgePolicy1)
+				if !ok {
+					return fmt.Errorf("expected "+
+						"*models.ChannelEdgePolicy1, "+
+						"got %T", edge)
+				}
+
+				chanInfo.Node1UpdateTimestamp = e.LastUpdate
 			}
 
 			rawPolicy = edges.Get(node2Key)
@@ -2402,7 +2415,14 @@ func (c *ChannelGraph) FilterChannelRange(startHeight,
 					return err
 				}
 
-				chanInfo.Node2UpdateTimestamp = edge.LastUpdate
+				e, ok := edge.(*models.ChannelEdgePolicy1)
+				if !ok {
+					return fmt.Errorf("expected "+
+						"*models.ChannelEdgePolicy1, "+
+						"got %T", edge)
+				}
+
+				chanInfo.Node2UpdateTimestamp = e.LastUpdate
 			}
 
 			channelsPerBlock[cid.BlockHeight] = append(