Unfortunately, I don't think that's what's happening. It looks to me that the jpeggers are forcing legitimate transactions to liquid to avoid the high fees.
NFTs on Liquid have existed way before ordinals (see raretoshi.com). Every NFT is a custom asset with a total monetary mass of 1 smallest unit (which is sat for Bitcoin).
There's something weird going on with some of those charts. Liquid's max block size is 4mb, just like bitcoin's. But those charts show blocks as more than half full when they only have 200kb of data in them. They should be showing them as 1/20th full.
Even if those transactions weren't using the segwit discount (which they are), liquid blocks still have room for up to 1mb of undiscounted data, so 200kb of undiscounted data should still display as less than 1/4 full.
But inscriptions, lightning channels, and submarine swaps all use the segwit discount, so I wonder if mempool.space is doing something extra sneaky to make the blocks look like they have more activity in them than they really do.
Either way. It is seeing increased usage. Posted on Twitter abit ago about it.
The Current State of Bitcoin Sidechains (By Network Usage)
To be as fair as possible. (Since each chain has different block times) I went from Bitcoin block 820725 (7:56 PST) to block 820738 (10:08 PST) and pulled all the equivalent TXs for each chain.
Liquid is fine don’t keep your life savings on there I think the idea of stacking tiny utxos and then pegging out on chain when fees are reasonable is a solid plan to protection your stack from getting eaten up by miners
Yes, even though many complain about the "federated" nature of Liquid. For many cases its fine....I mean vendors themselves expose you to counter-party risk (ie. you send your btc to buy something and they never ship your goods, etc).
So, using Liquid as something like a "purchasing network" might not increase your risk by any appreciable amount. Obviously the risk that is present, is managed by sizing your peg-in to not put more than you can stand to lose.
With wallets like Green that has BTC, LN, and Liquid its basically an existing solution that just needs discovery.
There is also the matter of "Assets" that Liquid supports (yes, I know....shitcoin factory). However there are tons of legit commercial uses for Assets...imagine your "shopper reward points" (airline miles, etc). I would frankly feel safer if my Airline Miles were held on a federated chain rather than held by a single entity.
We just need a muun-like wallet where we can have some funds on liquid and be able to pay lightning invoices with it.
Something like that will be a way better option than a custodial wallet for newcomers,
After the users stack some sats, they can save them on a hw on the bitcoin blockchain.
I guess with the arrival of fedimint we will have some kind of solution like that too.
I would assume some of that volume is retail looking for cheaper transactions and arb traders using it to move between supporting exchanges, who knows it could force more exchanges to adopt it along with LN so maybe that is the benefit of ordinals finally getting traction on scaling solutions which will bring liquidity and more development
Liquid is just a federated version of bitcoin, it has a couple other op codes and confidential transactions, but offers no real architecture improvements.
Fedimint is an ecash based mint, so it actually leverages the benefits of federated custody and isn't just another blockchain.
It's harder to audit a fedimint federation and the use-case seems more oriented towards simple transfers. I wouldn't say fedimint is 1000x better, it just has different advantages and tradeoffs. I also think covenants and confidential amounts on liquid are pretty distinguishing features.
Yeah the ability to audit is traded for privacy. And programmability in what way? The fedimint modules with server side components run and executed by guardians? I like fedimint for the ability to create and choose federations but there are tradeoffs.
Use the tools wisely. Let' say you need LN inbound capacity as you stacked hard on Robosats witn Non-KYC BTC and you channel is full. You can swap out to L-BTC with boltz.exchange, stack harder with LN and should fees be lower again, swap L-BTC to BTC cold storage or swap L-BTC back to LN. Know you options!
It will be interesting to see if this causes an increase in BTCUSD. If this is good for price appreciation then we are very supportive of sidechains. Right now, it appears sodechains reduce block space demand by moving transactions off chain, so this could be seen as causing less demand for block space. This is bad bad.
/s