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.
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!
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.
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
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?
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
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.
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.
Your docs say:
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.
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!
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
I don't
Keep up the good work! I love to see software like this come out
Very cool ideas
This sounds somewhat like Kollider but I don't know if Kollider works with HTLCs like this.
From the docs:
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?
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
Kollider was a centralized derivatives exchange that had you deposit funds.
We are purely spot! Plus LNMarkets is killing the derivative game with ATHs
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.
Think they were really tight on resources, so the eth pivot was a desperate attempt to find a money maker.
But ETH?!! Goes to show they didn’t think about their business model
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
Will this be available in every state? Which regulatory agency do you need to comply with?
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.
How do you make money from it and where are the servers (which jurisdiction)?
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.
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