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0 sats \ 0 replies \ @freetx 21 Jan \ parent \ on: How is Fedimint better than MercuryLayer? ecash
There are 3 main problems with Liquid:
- They rug all users pegged Bitcoin (unlikely)
- Possibility of them censoring your transactions
- Possibility of refusing Peg-Out
In practice I think 2 & 3 are the same problem....meaning if you could prevent them from censoring transactions, they couldn't stop you from pegging out (specifically, they wouldn't know who was pegging out therefore they wouldn't try to stop it).
Liquid, like BTC has no real concept if addresses are owned by same person or not. So a mitigation strategy to this is to immediately move funds from Peg-In to another address you control.
So (a) Peg-In Address --> (b) Initial L-BTC address --> (c) New L-BTC address
In theory, at that point, Federation members can no longer "know" that Address (c) is owned by same person that pegged in or not. Further, Federation members will no longer know what amounts are where.....