0 sats \ 0 replies \ @sideswap_io OP 13 Aug 2022 \ parent \ on: SideSwap: The Future of Atomic Swaps. Ask us anything! bitcoin
We're interested in understanding your line of reasoning and why you believe Liquid is trying to take over bitcoin.
From our perspective, sidechains are the only way a bitcoin based financial system can be created,
- Multi-asset
- Supports both permissioned and non-permissioned assets being issued
- Atomic swap trading with no KYC/AML (if the two assets are non-permissioned)
- Easy peg-in and peg-out to enter and exit from the bitcoin mainchain
It has far better security than any custodial exchange. It's permissionless and allows anyone to build on top.
We assume you're referring to L-BTC and we would say it has significant (untapped) usability.
Bitcoin is a one-asset chain. The ultimate settlement layer. For it to develop into the settlement currency used against other blockchain based assets, we need to imagine what the architecture of such a system looks like and how it may fulfil the requirements of all stakeholders.
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How are financial assets currently issued and what custody model do they employ? In the current financial system securities are held with Central Securities Depositories (CSD) in which only Financial Institutions hold accounts.
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How are financial assets traded? On exchanges. Exchanges do not hold either cash or securities themselves. These assets are held with the Financial Institutions which connect to the exchange.
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How are financial assets settled? Exchange clearing members hold an account with the clearing house which services the exchange. They need to deliver cash and/or securities to the clearing house account at the end of each trading day. Once the pay-in is made, the clearing house does pay-outs to the Financial institutions account with the bank or the CSD. This means that the clearing house keeps collateral on account for each member and each party needs to deliver at the end of every day. It further means that all securities and cash are held in the name of a financial institution.
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How does trading in different cryptocurrencies work? Users pre-deposit cash and/or crypto with a custodial exchange. The exchange can only guarantee the fulfilment of settlement obligations by controlling both assets as there is no legal recourse against members (like in the case with a clearing house).
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How would trading work on a multi-asset blockchain? Trades can be done as atomic swaps directly between the parties involved. Real-time delivery versus payment without middlemen. The model also works with a custodial setup if one finds this more convenient.
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How does custody work on a financial asset issued on Liquid? The asset is held in the users name, and not with a financial institution.
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What type of assets does Liquid support? Liquid supports the issuance of both bearer assets as well as permissioned assets (i.e. securities).
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What exactly is SideSwap building? The infrastructure to showcase how assets can be issued in the users name and the p2p atomic swap settlement model which it may support. This model has not been implemented on any other blockchain. Liquid makes this possible and uses bitcoin as its settlement currency.
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Do people have eyes on this? Not yet. As an example, we issued our own equity on the Liquid network and offered the first 200 users who register their name on our legal registry 250 free shares. This is 0.5% of our outstanding shares. We have so far managed to give away no more than about 40 tranches. You can find more info here if interested (https://twitter.com/side_swap/status/1544646960069726209).
Ask away. This discussion is why we are building on Liquid.
For us to integrate Trezor and Ledger to our wallet, they would need to update their firmware to support Liquid. I don't think it is in their current roadmap. For now, our focus is on Jade.
Note! There are further questions if they would be able to support coinjoin transactions which we would require for our swap market.
Our code is open source and your seed can restore your wallet with other wallet providers. Your funds will always be safe as they are in custody with you, and not us.
We answered a similar question in our reddit AMA: https://www.reddit.com/r/liquidnetwork/comments/wls2ok/sideswap_the_future_of_atomic_swaps_ask_us/?sort=new
The statements may all be true to varying degrees. As an "outsider" and fairly recent federation member, these questions were one of the key points we had to overcome before deciding to take a bet on Liquid and start building on top of the chain.
After having been involved for some time and experienced the inner working of the federation, I can say for sure that the keys are distributed globally with hardware modules. Who controls each key is not currently known by us, but we can imagine that the requirements and responsibilities placed on an operator is significant and rules out a lot of organisations. It may very well be that several keys are indeed operated by one party until the network has grown to a size where the keys can actually be distributed.
In terms of being permissionless, you don't need anyone to peg-in or issue an asset, however, the network rules currently require that peg-out keys are held with federation members (I believe this was a result of engineers seeing edge-cases around permitting users to be able to do so directly - this may change going forward if the federation drives this question).
In the end, we feel the federation is doing its utmost to ensure the integrity of the chain and the management and distribution of keys (even to the point of decreasing usability like 102 confirmation peg-ins and peg-outs only via federation member keys). They have our full confidence.
(FYI. This question isn't new. If you look at the bitcointalk forum, "fellowtraveller" tried to create a protocol called "open transactions" where users could peg-in/out assets and trade them p2p. He was ahead of his time. Eventually the implementation failed due to the voting pools which he foresaw never being resolved.)
Good question. If we added more logs to our servers and made a concerted effort, it may be possible if our service is used to swap AMP assets. However, as long as the current team is in place, no such steps will ever be taken.
Yes, we are a for profit business and we're cash flow positive. We make money from:
Peg-in: 0.1%
Peg-out: 0.1%
Swap market fees: 0.1% (compared to most exchanges who charge 0.2%)
Instant swap dealer: 0.5%
If we convince anyone, we hope to do so by example and by offering a service which resonates with their own views. In terms of bitcoin maximalists, we hope that they can see that Liquid can be a securities issuance chain where bitcoin is the native settlement currency. Its still very early, and there isn't much knowledge or discussion about it, but Liquid has all the building blocks to make this come true. We hope to produce further discussion, knowledge, and material around it to build awareness. BMN is a great example.
We plan to look at lightning integrations once we're done with 2-step swaps and HWW wallet integrations, however, its still unclear exacly what we would like to do in the space.
In terms of obfuscating bitcoins via a peg-in and immediate peg-out, the service would be possible to build (right now it can only be manually executed). Interesting idea.
Good point. I now see what you mean. We could add a function which notifies the user when it is time to add to their L-BTC stack and setup a swap to exchange their desired amount. Let us discuss internally how we could go about doing so.
We're not able to offer any fiat payment rails ourseleves, however, we have considered integrating external service providers into the SideSwap wallet. In the near term, I would say that our focus is on hardware wallets (Jade) and 2-step swaps (i.e. Maker can go offline after posting an offer). Once this is done, we may look at adding additional services.
Great question!
No hostility at all. Lightning is a great payments layer.
In terms of building a bitcoin based financial system, nothing comes close to Liquid with its ease of having multiple assets issued on one chain and ability to have permissioned assets (via AMP). This allows for actual securities to be issued (few jurisdictions support bearer assets) and turns the current custodial securities system upside down. Given these properties and clear path forward, we believe Liquid will be a success in its own right.
Blockstream Green is a great wallet. Its seed can be ported to SideSwap (and vice versa), however, it mainly works as a "plain" wallet without assisting the user with peg-in/out or swapping p2p on Liquid. If the new user is looking to try out the functionalities offered by Liquid, we would suggest our own wallet which is easy to use.
GENESIS