This is a multipart DeepDive that will focus on the Liquid Sidechain. It will be released in 3 Parts:

Part I: Overview, Installation, and first Peg-In
Part II (this): Asset Creation and Configuration
Part III: Advanced Topics and Peg-out

Assets

In Part I, we successfully Pegged-In our BTC and received L-BTC, now lets use that L-BTC to do some interesting things with Asset Issuance:

Before we jump straight into creating an asset, let us first look at our existing wallet¹:

$ sudo ./scripts/app compose elements exec node elements-cli -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS getwalletinfo

"balance": {"bitcoin": 0.00149155}

$ sudo ./scripts/app compose elements exec node elements-cli -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS dumpassetlabels

{"bitcoin": "6f0279e9ed041c3d710a9f57d0c02928416460c4b722ae3457a11eec381c526d"}

So our wallet already has an asset called 'bitcoin' which has an associated UUID of 6f0279e9ed041c3d710a9f57d0c02928416460c4b722ae3457a11eec381c526d. Everything in Liquid is an 'Asset' (including L-BTC) and each of these Assets can have different features.

Looking up this asset label on https://blockstream.info/liquid/assets we can see some info about it:

https://m.stacker.news/14408

This shows us the total amount of L-BTC in circulation, additionally we can see how much was Pegged-In, Out, and Burned. Most notably, this confirms that everything is in balance. The Circulating Supply = (PEG_IN - PEG_OUT - BURNED), so no debasement has happened.

Issuing our own Asset

Let's issue our own asset, luckily this is pretty straight forward:

$ sudo ./scripts/app compose elements exec node elements-cli -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS issueasset 10 0 true
  
{
  "txid": "8a12dd64c43de200cc7addb6c59f67bdbc6481ef1cc8b24253c7c1daba3c4e06",
  "vin": 0,
  "entropy": "3b8ded63f872d53d93b40ea415f3473b50c033a8e9abc1f0e7418e7f16e98dec",
  "asset": "8aa889f0bd16bab7d236ab6f3583481382bf976433360ff240cf22b79181a50f",
  "token": "2eb4da7c84a7b4db2944ead6b05041a5d8d8f4a73cd1413b140b44c4ec42fbdf"
}

Exploring our new Asset

Checking out our wallet we see:

$ sudo ./scripts/app compose elements exec node elements-cli -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS getwalletinfo

"balance": {"8aa889f0bd16bab7d236ab6f3583481382bf976433360ff240cf22b79181a50f": 10.00000000,
"bitcoin": 0.00140447,}

We can see our wallet has 10 of our assets² (which has a label '8aa889...'), lets checkout what the Liquid network knows about it:

https://m.stacker.news/14409

So publicly we know the following:
- It cannot be re-issued (fixed supply token)
- It has only been issued once
- However both the issued amount and the circulating supply has been hidden from us.

It's nice to have hidden assets, but practically speaking they might not be useful in many situations. For instance, suppose that we wanted users to be able to verify the circulating amounts (i.e. to prevent debasement).

It is possible to 'unblind' this information to clients, but that would involve distributing an unblinding key to each client. Luckily there is a simple solution: we can issue the asset as unblinded - which will permit this information to be publicly available without affecting the security of the actual transactions:

Issuing a Non-Confidential Asset

Let's create another asset and this time choose a different option (specifically, lets create this asset unblinded by setting the last value to false. This option controls blinded / unblinded behavior):

$ sudo ./scripts/app compose elements exec node elements-cli -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS issueasset 10 0 false

{
  "txid": "225f3ed16457467673fd64f3577031b91be370615b3feba53e1cc0b256768944",
  "vin": 0,
  "entropy": "fc4b02ee3892faaef2ddb673d437910ca75ca4d4e5ff4c1cb6ef1e3a4667a942",
  "asset": "41c19a473c71298a28342ccbf6fcbd3042cae8607b3b79d336b4c02e89ba2c66",
  "token": "10178003de4d2141fc318e3a61a7c8e1d43d3842a87fb8fb18fc1c1b09d081cb"
}

...and checking again what the Liquid network knows about it

https://m.stacker.news/14410

Now we can see the total issued amount / supply²
Let's try sending 2 of these unblinded assets to another wallet (my Blockstream Green mobile wallet) and see what is visible on the network.

$ sudo ./scripts/app compose elements exec node elements-cli -named -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS sendtoaddress address="VJLKDWB..." amount=2.0 assetlabel="41c19a..."
b1d0592319fc5a6ed4e2ea912ddbc9e630e0a13a083a178f69054129ef589d25

Looking up this transaction on the block explorer, we see:

https://m.stacker.news/14411

This is interesting: So although the transaction is visible, we can't see what was actually transferred (even though the details of the asset are visible, it is still hidden inside the transaction).

Further, where is my Green Wallet address (ie. VJLKDWB...)? We can see 3 output addresses, presumably these are: Change, Fee, and Recipient...but where the actual Green Wallet address?

Let's look up my Green Wallet address directly in the explorer:

https://m.stacker.news/14412

So now this shows us that the Confidential Address: VJLKDWB... corresponds to the Unconfidential Address: GnDXE5... Through the magic of one-way hashes, if we know the "Confidential" address we can then derive its public address. However, just by looking at the public blockchain, there is no way to reverse that hash.

Now, lets look at how things look on the Green mobile wallet:

https://m.stacker.news/14414

We can see that we've received 200,000,000 'units' of our custom asset. However, notice how there is no label. Whereas, for L-BTC and Tether it shows complete with name and ticker symbol. Showing just the asset UUID is not very user friendly. Let's see if we can remedy.

Registering our Asset

The publication of asset metadata info on Liquid works on a .well-known system where specific files are published on a webserver that you control. There are a few different steps to accomplish this:

Create a new legacy address³, get public key for that address.
Generate a Contract and Contract Hash using the information we want to appear in the public registry.
Create our asset with Contract Hash embedded in it
If we ever want to delete the asset from the registry, generate a delete script
Generate a liquid-asset-proof text file and place in .well-known location on domain that matches contract
Register (or unregister) the asset via Blockstream web API

Thats a lot of steps, and many are prone to error. Luckily for us there exist a bash script to basically do all of it. Download the script from Blockstream

Save that file as issue_and_prepare_register.sh and open with text editor to customize the following values.

#NOTE: SET YOUR OWN VALUES HERE, THESE ARE WHAT I USED AS A DEMO

NAME="StackerNewsDemo-1"
TICKER="SND-1"
DOMAIN="coins.b0xxy.net"
ASSET_AMOUNT=10.0
TOKEN_AMOUNT=0
PRECISION=8
COLLECTION=""
alias e1-cli="sudo ./scripts/app compose elements exec node elements-cli -rpcuser=$E_RPCUSER -rpcpassword=$E_RPCPASS"

With these values set, you can run the script. This script will output 3 files:

liquid-asset-proof-<ASSET> (put this file in .well-known location of domain you set)
register_asset_<ASSET>.sh (Bash curl script to submit via Blockstream API)
delete_asset_<ASSET>.sh (Bash curl script to delete asset from registry)

Take the liquid-asset-proof-<ASSET> file and place it in .well-known folder in root of domain (or sub-domain in this case). For instance, this will be placed in https://coins.b0xxy.net/.well-known/liquid-asset-proof-3e62af3c80c56ab6fec3d1e5646637152afebaf2a86ace075bbb7a88702e1fe5 in this case. Verify that you can actually reach it before proceeding to the next step.

Then you can run the register_asset_ASSET.sh script and you should get a json response back indicating success.

On my end, the script generated a new asset, which can be seen here

https://m.stacker.news/14415

Looking at this newly created asset asset, we can see:

Has an actual Name + Ticker instead of just a UUID
Has decimalization preference set
Shows registered website that controls it
Has a Contract + Contract Hash associated with it

Now if I send 2 of these to my same Blockstream Green Wallet:

https://m.stacker.news/14416

Now it shows up in a much more user-friendly format. The only thing missing is a logo! How can we fix? Blockstream allows you to upload logos for your assets on their website. So after doing that now we have:

https://m.stacker.news/14417

Wrap-up and Next Session

In this session we issued assets⁴, looked at their basic features, and registered our own. In the next part in the series, we will delve into even more advanced aspects of Liquid like: Swaps, Contracts, etc. Finally we will discuss pegging-out and the broader use-cases of the technology.

The values E_RPCUSER and E_RPCPASS, where environmental variables we set in Part I ↩
Like in bitcoin, 1 integer unit is 100,000,000 base units (not sats, but equivalent concept) - So in this case issuing "10" assets is really issuing 1000000000 units (10 x 100,000,000). ↩ ↩²
Using a legacy address for this task imposes no real implications to your security since its only used to remove assets from the registry. Its possible to do this with a non-legacy address, but more steps are involved and we will need to use other tools rather than what's already built-in to Elements node, so we will just use a legacy address for this. ↩
One feature we neglected to checkout was issuing reissuable assets. If you are interested in seeing how that is done, you can check out the developer documentation here: https://elementsproject.org/elements-code-tutorial/reissuing-assets ↩