We have a simple way of generating LP via the Orb and stabbing ourselves but this is still a very simple and long-winded way to generate LP, we can boost the power of our dagger and get bonus LP by simply using the Incense Altar:
To start out, you'll need to create the Incense Altar. Once you've done so, you can place it down on a 3x3 square of whatever material you'd like. Once you've done so, if you hover over the Incense Altar with The Divination Sigil in hand, it should tell you that your Current Tranquility is 0, and your Current Bonus is +20%. If you look at a Sacrificial Dagger now that you've been in proximity to the Incense Altar (in a range of 5 blocks on both axis), you'll notice that it's now glowing as though it was enchanted, but it’s not the Dagger itself that has changed: it’s you. You have been “Incensed”. The Dagger will just make this state visible if you have it in your Inventory.
Be careful the next time you go to self-sacrifice, as it will remove 90% of your health the first time you use it, however it will also give you an additional 20% LP per heart. So at the base, with 10 hearts, it would take 9, and give you 2160 LP as opposed to the 1800 LP it would have normally given. You'll also be given the Soul Fray debuff, which prevents you from using this supercharged self-sacrifice again for 20 seconds - attempting to do so will yield very little LP. The debuff can be removed early by milk, for those that don’t like to wait.
For now, a Tier 1 Altar will do the job, we can't really increase the amount of tranquillity just yet so we will have to wait until we have a tier 2 Altar, use it whenever possible and try to fill your Blood Altar and Orb as much as possible.