SideSwap: A Wallet, Bridge and Decentralized Exchange for Liquid Network Assets
SideSwap @sideswap_io is a Bitcoin wallet, bridge and decentralized exchange on the Liquid Network sidechain @liquid.
What can you do with SideSwap and how does it work?
SideSwap Basics
SideSwap is trying to bring capital markets to Bitcoin.
It allows you to:
✅ Peg in and out to/from the Liquid Network
✅ Hold Liquid assets
✅ Swap between Liquid assets and Liquid BTC
You can learn more about Liquid here.
SideSwap was launched in 2021.
The app is open-source and available for desktop, iOS and Android.
Trading, Pegging In/Out, Fees
Besides being a Liquid wallet and a bridge, SideSwap also functions as a non-custodial p2p DEX for Liquid assets.
The asset swaps are atomic (trading fees 0.1%, swap spread 0.6%).
You can use the "Instant Swap" feature or use an order book to buy and sell.
When pegging in to Liquid, SideSwap will generate an on-chain address for you, and once you've sent the funds, they will be converted to your Liquid BTC balance on your SideSwap wallet.
The peg-in takes up to 102 confirmations on the main chain with larger amounts, and generally 2 confirmations (often between 10-20 minutes) with amounts smaller than 0.1 BTC.
Fees for pegging in and out are 0.1%.
No KYC (Unless Trading Securities)
Using SideSwap doesn't require KYC, unless you're trading security tokens.
Trading between e.g. Liquid BTC and Liquid USDT is permissionless.
Since Liquid transactions are confidential, asset types and amounts are hidden from 3rd parties (no front-running or MEV).
Even when trading "transfer restricted assets" (securities), SideSwap is not responsible for verifying users' identities: this is done by the asset issuer itself by a whitelisting process.
Trading securities on SideSwap and Liquid could make the whole process more interoperable.
In TradFi, if you want to switch between brokers, you have to sell your assets first to fiat and then buy again on a new broker platform.
Self-Custodial With Jade Hardware Wallet Support
SideSwap prompts you to back up your wallet and save your seed phrase upon creating a wallet.
Storing your seed phrase is extremely important!
Otherwise you might lose your funds!
SideSwap supports the Jade hardware wallet by Blockstream @blockstream_official , but only with the desktop version and not in the QR code mode.
Jade can be imported as "watch-only", so you don't need to connect it to view balances or receive Liquid assets.
The Jade device is only required when signing transactions.
Learn more about Jade here.
SideSwap supports exporting all your transactions to a CSV file, for e.g. accounting purposes.
The app also enables an option to connect your own personal Electrum server.
Censorship-Resistance and User Experience
The web version of SideSwap is a downloadable program that you run on your computer (it's not an app you run on a web front-end).
This design choice can potentially add censorship-resistance in case permissionless DeFi front-ends get banned or restricted.
Although Liquid blocks take 1 minute to confirm and 2 minutes to settle, when testing the swapping feature on SideSwap the swapped assets were credited almost instantly.
Liquid transaction fees were very small too (around $0.15).
L-BTC is used to pay tx fees on Liquid, but unlike on many smart contract blockchains, I don't have to reserve an amount of L-BTC on my balance to pay for "gas fees".
If I want to swap all my L-BTC to e.g. L-USDT, the tx fees are automatically deducted from the amount.
It's good to note that SideSwap only supports the Liquid Network and can't be used with on-chain bitcoin or with the Lighting Network.