Lightning native exchange \ stacker news ~lightning

Lightning native exchange twitter.com/polarityorg/status/1762975434608959587

4283 sats \ 17 comments \ @ethanmarcus 28 Feb lightning freebie

1729 sats \ 4 replies \ @supertestnet 29 Feb

Your docs say:

The Maker generates...[a] collateral invoice, secured by a hash from a trusted third party...the trusted third party does not have access to the [trade] funds but [only] to the preimage [to the collateral invoice]...The Taker...[must pay]...the collateral invoice...[which is paid out to the Maker] if the trade is not [finished] in 5 seconds

That is not trustless. The Taker must trust the third party not to collude with the Maker to steal the collateral.

Creating an exchange on lightning is cool but you do it a disservice when you call it trustless even though the oracle + the Maker can steal the Taker's money. I recommend removing the term trustless from your marketing, and be clear that each trade does involve trust, and always favors the Maker.

2100 sats \ 3 replies \ @ethanmarcus OP 29 Feb

Creating an exchange on lightning is cool but you do it a disservice when you call it trustless even though the oracle + the maker can steal the taker's money. I recommend removing the term trustless from your marketing.

There are reputational factors to this 100%, but it's the same as saying Lightning is trustless when you have peers you have to route through -- same principle imo. Oracle has 0 incentive to steal the collateral, which at most is a couple bps.

That being said I completely understand your point. Will revisit wording!

0 sats \ 2 replies \ @supertestnet 29 Feb

it's the same as saying Lightning is trustless when you have peers you have to route through

Your counterparty on flashnet can collude with flashnet to steal your money if you are a Taker. Your lightning peers can't do that. They could collude with miners to execute a 51% attack on bitcoin, censor your justice transactions, and steal from you that way. But that's a lot harder than phoning up flashnet and saying "hey, let's rug this guy." I appreciate the comparison, but flashnet introduces a lot bigger of a trust assumption than lightning does.

0 sats \ 1 reply \ @ethanmarcus OP 29 Feb

Your counterparty on flashnet can collude with flashnet to steal your money if you are a Taker. Your lightning peers can't do that. They could collude with miners to execute a 51% attack on bitcoin, censor your justice transactions, and steal from you that way. But that's a lot harder than phoning up flashnet and saying "hey, let's rug this guy." I appreciate the comparison, but flashnet introduces a lot bigger of a trust assumption than lightning does.

What I meant was that there are trust-assumptions on Lightning as well, but we still call it trustless. I agree that the attack vector may be bigger here, but incentives are not aligned. But, again, yes will revisit wording!

Also, this is just v1! Lots of room for improvement as always :)

If you want to keep chatting more than happy to @ t.me/lnpolarity

110 sats \ 0 replies \ @supertestnet 29 Feb

What I meant was that there are trust-assumptions on Lightning as well, but we still call it trustless

I don't

Also, this is just v1! Lots of room for improvement as always

Keep up the good work! I love to see software like this come out

Very cool ideas

106 sats \ 6 replies \ @k00b 28 Feb

This sounds somewhat like Kollider but I don't know if Kollider works with HTLCs like this.

From the docs:

To bring life to the schema, Flashnet leverages a sophisticated framework composed of several key components: a state-of-the-art centralized limit order book (CLOB), strategic peering relationships, and advanced routing services.

Seems centralized only in terms of coordination. I'm curious what is being swapped and how? LN to BTC and other chains that support hash timelocks?

660 sats \ 0 replies \ @ethanmarcus OP 29 Feb

Centralized matching, trust-less lightning settlement. Anything you can put in a Lightning channel can be traded. Our focus is stables on UTXO token protocols. All Bitcoin native :)

Made the compromise of centralized matching as we optimized for performance. The actual capital settlement/trade is trustless on LN.

More than happy to dive into things if you want: t.me/lnpolarity

426 sats \ 4 replies \ @kr 28 Feb

not sure if Kollider worked that way either, but Kollider closed up shop in November

https://kollider.substack.com/p/announcing-the-closure-of-kollider?utm_source=profile&utm_medium=reader2

742 sats \ 0 replies \ @ethanmarcus OP 29 Feb

Kollider was a centralized derivatives exchange that had you deposit funds.

We are purely spot! Plus LNMarkets is killing the derivative game with ATHs

0 sats \ 2 replies \ @BlokchainB 29 Feb

As a Kollider user it had great UI but the back end struggled. Plus they really lacked focus the added Eth/USDT pair at one time.

196 sats \ 1 reply \ @chairman_pretense 29 Feb

Think they were really tight on resources, so the eth pivot was a desperate attempt to find a money maker.

0 sats \ 0 replies \ @BlokchainB 29 Feb

But ETH?!! Goes to show they didn’t think about their business model

0 sats \ 1 reply \ @joda 29 Feb

Will this be available in every state? Which regulatory agency do you need to comply with?

26 sats \ 0 replies \ @ethanmarcus OP 29 Feb

Available everywhere! The "orderbook" is simply a service we provide to help makers and takers find each other. The actual settlement is P2P on the Lightning Network! No compliance checks on our end unless the maker/taker uses something like Reflex or some LSP checks.

0 sats \ 1 reply \ @joda 29 Feb

How do you make money from it and where are the servers (which jurisdiction)?

26 sats \ 0 replies \ @ethanmarcus OP 29 Feb

We make money by providing liquidity services and small make-take fees. We're hosting servers in the US in the beginning but have plans to spread out depending on regional activity.

0 sats \ 0 replies \ @nitter 28 Feb

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