Sequentia is an upcoming Bitcoin sidechain based on a fork of Elements (a fork of bitcoin core made by Blockstream and used for the Liquid Network).

We have now launched a signet and a demo walkthrough showcasing one of Sequentia's two most fundamental features, which are also the two most key differences with Liquid. These are therefore also the two development milestones that we've committed to building before we launch a mainnet.

As demonstrated by the signet and walkthrough, Sequentia is the first blockchain with no specific or native coin for transaction fees. Instead, it allows users to propose transaction fees with any token issued on it.

Without going any further, if Blockstream were to integrate some of the modifications to Elements we've already made so far, you could pay transaction fees on Liquid in USDT directly (as also possible with Liquid Taxi, except directly at the protocol level, therefore jumping through fewer hoops, and able to become the default behaviour of most wallets with most assets) etc. while L-BTC could still of course exist and be used to represent BTC on the sidechain, but it would not necessarily be favoured over any other pegged BTC or other assets by the network itself, since tx fees could be proposed using anything at all and block producers will likely accept anything of relatively stable value and sufficient liquidity.

However, the next (and final before mainnet launch) major development milestone will perhaps be considered the most defining characteristic of Sequentia: Bitcoin Anchoring.

In the context of Sequentia, "Bitcoin anchoring" refers to a consensus rule requiring each Sequentia block to contain a reference to the hash of a Bitcoin block at an equal or greater height than the block referred to by the previous Sequentia block. Since Sequentia will have a higher block frequency than Bitcoin (similar to Liquid), several Sequentia blocks can refer to the same Bitcoin block.

The goal of this policy is to ensure that Sequentia reorganizes every time Bitcoin does (every Sequentia block containing a reference to an orphaned Bitcoin block is discarded), as assuming that Sequentia never reorganizes by itself, this creates an opportunity to have reorg-proof cross-chain atomic swaps, and even submarine swaps, with BTC on the mainchain/LN. You could, therefore, have viable native Bitcoin and even Lightning DEXs for tokenized assets issued on Sequentia, where, unlike with Liquid or any other sidechain today, you can actually implement these cross-chain swaps with real BTC without needing to add a burdensome timelock in case the swap reverses on one chain and not the other.

So as you might be able to tell by now, the use-cases and intended user experience / user journey on Sequentia are actually fairly similar to that of Taproot Assets (i.e. a bitcoin/LN wallet with access to tokenized assets that can also be transferred over LN and p2p swapped for on-chain/LN BTC at any time), but with a completely different approach to implementation, such that Sequentia doesn't ever need to compete for (far too scarce!) Bitcoin blockspace to write into, whereas Taproot Assets does whenever an asset is issued, locked into or unlocked from a lightning channel, and also for the transfer of assets without sufficient liquidity to warrant using over Lightning.

More changes are planned besides the two features that I've described here, but these will come much later, after the initial launch of the Sequentia Network. One of these planned post-mainnet upgrades is opening up the federation of Sequentia blocksigners to market-based participation. Our current proposal for this and several other features can be found in the Sequentia whitepaper.

We would highly appreciate any feedback on this demo! This is a completely open-source project, and we will try to compensate any contribution to the codebase commensurately, so please jump right ahead if you think this sounds like something you could add to.