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20 sats \ 0 replies \ @bitmatrix OP 27 Sep 2022 \ parent \ on: Bitmatrix AMA 🌊 bitcoin
Unlike traditional order books or atomic swap platforms, Bitmatrix has the concept of Liquidity pools. There’s no central server in the middle that matches orders. Liquidity is aggregated from different sources (LPs) into unified pools where anyone can trade against those pools. Pools are not controlled by any entity; they are algorithmically engineered to set prices according to a mathematical formula enforced by the bitcoin script.
Yes. That's certainly possible and appropriate. Interacting with Bitmatrix protocol is non-interactive, unlike atomic swaps and Lightning. This makes it easier to interoperate with other platforms.
The current L-BTC<>USDt pool has an LP fee tier of 0.25%. When creating a new liquidity pool, the default fee tier is set to 0.25% by default, although it can be adjusted to as high as 1% or as low as 0.01%. Note LP fee tiers are immutable, and thus cannot be modified once a pool is deployed. Multiple liquidity pools could exit with the same pair (such as L-BTC<>USDt ) but with different LP fee tiers. The swap page in the Bitmatrix web interface algorithmically picks the liquidity pool based on the best price.
Our target audience is bitcoiners, especially those who are interested in utilizing their sats but were previously unable to do so.
Although the Account model is more developer-friendly, the end-user experience for the UTXO model is superior to the Account model in pretty much every way possible. Here’s why:
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Ether (ETH) is the fuel for executing Ethereum transactions. When you interact with an EVM, you must pay the computation. That computation is calculated in gas, and gas is ONLY paid in ETH. Many Ethereum users complain about having ERC-20 tokens but cannot move them since they don’t have the base currency ETH. Whereas in the UTXO model with services like liquid.taxi, users can transfer assets or interact with smart contracts by covering fees with the same token from the amount they transact, without depending on the base currency.
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Ethereum users pay for the computation, regardless their transaction succeeds or fails. Even if it fails, the miners must validate and execute the transaction, which takes computational power. Users must pay for that computation, just like they would pay for a successful transaction. This is not only inefficient in terms of IBD time, storage, computation, and bandwidth, but also an awful UX from the end-users perspective. UTXO model is not stateful; failed transactions cannot end up in a block, and users can hand over zero-conf assets. This brings an overall user-friendly user experience.
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From CoinJoin to MuSig aggregations, to confidential transactions UTXO model provides a higher level of privacy in every way possible. The account model is generally detrimental to privacy since the account is tied to a single owner and anyone can track the address of who has been paid.
There's no upper bound limit on how much you can add. However, the maximum liquidity a pool can accommodate is 1,500 L-BTC. This is due to the 64-bit arithmetic overflow issue, which will be addressed further in our Simplicity version.
Whether an atomic swap-based service or an AMM, all swap services suffer from a lack of liquidity. Fortunately, Bitmatrix makes it easy for LPs to aggregate liquidity to get users better prices.
Bitmatrix is functionally equivalent to Uniswap V2, however, there are some tradeoffs. The nature of the EVM model inherently allows contract-contract calls. While this brings various benefits such as pool-to-pool swaps, it as a downside allows flash-loan attacks. This is fundamentally not possible when operating in a UTXO environment.
On the other hand, Bitmatrix users, when integrated with liquid.taxi, can pay for execution in any desired asset. This means users can interact with a smart contract without holding the gas asset such as L-BTC. This brings an overall frictionless user experience.
To build financial application primitives, one needs an "execution environment" such as Liquid but Lightning. Lightning is a network of payment channels that does one thing, and it does it relatively well.
Bitcoin > Security Tokens > Fiat > Shitcoins 😎. There are so many assets you can utilize that are not shitcoins.
Thanks for your input; there're various articles on Medium to explain the overall Bitmatrix architecture: https://medium.com/bit-matrix
And, here's a video on line-by-line stack execution of a liquidity pool contract.
https://youtu.be/wxtGDmM7uJU
Also, please see Design Paper Early Preview. The paper reflects the most-up-to-date Bitmatrix architecture:
https://docs.bitmatrix.app/v1/11_21_21/Bitmatrix_Paper_Early_Preview.pdf
We will add Jade and Green wallet support as soon as they expose their APIs for third-party applications, however, there is no known timeline for this. You should not expect them to be supported soon.
When building financial applications, you have two alternatives; EVM or the UTXO model. Within the UTXO options, Bitcoin is intentionally kept simple, and Cardano is a joke, leaving us Liquid, which has advanced scripting primitives, first-class asset support, and confidential transactions. We see that historically everything humanity has accomplished is built on layers, and we believe that the stateless nature of the UTXO model is superior to the stateful design of the EVM model in every way possible. My thesis is that Bitcoin's multi-layered approach is the most solid foundation for building the next generation of financial applications on a large scale.
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