0 sats \ 5 replies \ @mallardshead 22 Sep 2023 \ parent \ on: Ask SN: Have you used a sidechain? bitcoin
The state channel design pattern of lightning (directionally) is the only thing that makes sense to me. I've used so many different sidechains and crypto layers. Along the journey, frustrating at times, I concluded DeFi, applications, or L3s should look more like kids with a lemonade stand on the roadside with a QR code taped to the front, or a free Ln wallet in the operator's pocket. Or it should look like LNMarkets, where I can zero auth a new account open, fund it, and pull off a derivatives trade all in under 60 seconds if I'm fast. Or Stacker.News and Nostr with zaps and marketplaces. Or DEXs like Robosats and Bisq. And so on. These don't require a special sidechain, blockchain, or token. What business or service does? It's the ability for anyone in the world to plug into the network, frictionlessly, instantly, by downloading a free app.
At least that's my two sats.
Something like LNMarkets is 100% custodial though. Why would you prefer a custodial solution like that over a non-custodial one?
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Because of the simplicity, speed, and convenience. I'm more interested in trust-minimization than I am decentralization for businesses providing a good or service. LNMarkets has done a good job of trust-minimization (no KYC, etc). I'd say the same of Stacker.News which comes with a casual custodial wallet and is a centralized business. But a derivatives trading platform isn't something you can decentralize without immense tradeoffs. There are smart contract platforms for derivatives on ETH, but you can't do 100 trades in an hour because transactions take too long to settle, and more importantly, you'd lose all your money to tx fees. The Lightning Network does away with the settlement time and cost constraints entirely. It's instant and basically free. LNMarkets built a business around that. Decentralizing it would increase the cost, reduce the speed, and add friction. It's easier to do that with Stacker, Nostr clients, or Robosats (who are in the process of decentralizing via coordinators).
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There are decentralized margin trading protocols built on ZK rollups that allow far more than 100 transactions in an hour and have very low fees. Afaik very few people do anything like that on the ETH main chain itself.
I still don't understand how LNMarkets or SN are "trust minimized". You're basically limited to keeping very small amounts in these custodial services. If SN were a smart contract you could just interact with the contract and not worry about SN having access to any of your money.
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ZKs offer a bunch of promise across many applications. Bullish on those. They're clunky on the platforms using them and have quite a ways to go to prove themselves, from settlement to interoperability, especially interoperability which is the LNs specialty.
But why would SN need to be a smart contract? The beauty is that it's a simple HTML site anyone can access on the web from any device anywhere, sign up instantly, and it has a free disposable wallet attached to your username that's interoperable with the rest of the entire Lightning Network. You don't have to do anything or even keep a balance. I'd say at most you just want the wallet to be non-custodial, that's it. I think the LN will offer plenty of solutions for that in the near future based on the work of today.
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Because if it were you wouldn't have to trust any of your sats with it. You'd literally just be transferring sats from yourself to whoever you're trying to upvote and to the contract itself at the point of transaction, otherwise your sats stay in your custody at all times.
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