Why woulsn't people just use an atomic swap to instantly get mainchain coins if that's what they want?
Discussion
two reasons...
1. it hasnt been built yet
2. the fee may not be desireable
You can compare it to submarine swaps on LN. Theres dozens of implementations of github and the market is perfectly efficient (since you don't have to trust the swap service) so the fees would be easily driven to zero by competition.
Do you believe a drivechain powered sidechain would have the liquidity of lightning to support this?
I think its possible with enough adoption, assuming rationale for demand but getting through an initial hurdle isnt guaranteed. Liquid suffers from this.
That's a good point. If the drivechain is tiny there probably wont be anyone willing to swap with you. But then, there wont be many people that need that either, haha
Also, remember that as the receiver you can just tell whoever is paying you what drivechain to use, no reason to use a zero liquidity chain.
That assumes the payer has options. Or the payer saying they can pay in Litecoin or Doge. Which of those would you prefer?
But on a more serious note, need to think of incentives. The natural preference is for Bitcoin, as it can be quickly moved into a drivechain sidechain if so desired
Very true, but that's exactly how it works now. Most people accept Bitcoin (maybe Bitcoin cash too lol, sometimes ethereum) a lot support lightning too. Some darknets only accept monero (in a drivechain future they might also accept zcash drivechain bitcoin).
Point is the reciever chooses.
I usually prefer merchants that accept lightning for the low fees and privacy, but if they don't accept lightning, I have yo go onchain. Incentives are aligned so that merchants accept payments so long as the amount they might earn on that rail outweighs the costs of supporting it (they can factor swap fees into the price for example).