> TLDR someone needs to find a kickass off chain (L2 if you like) protocol that could 50x the usage of bitcoin using covenants, *without centralization *, then needs to write code and deploy it on say Liquid and signet.
A Federated L2 could be interesting where the federation is not limited to Liquid where the federation is limited to regulated parties.
Instead, what if we have a federation managed by a threshold signature that could grow to 50-100 parties to help execute state changes for coinpool.
Such an federation is possible using a Schnorr Threshold Signature. I am building one for a mining pool, where the federation membership is backed by PoW. How such a federation can minimise trust without PoW is a question I am thinking about these days.
Meanwhile - unashamed link share to my repo: https://github.com/pool2win/frost-federation
Nice, seems like a good general concept for federation.
For a coinpool, I'm wondering how you fold in a threshold. For exit, unilateral exit has to exist of course. But for state updates generally, I guess *maybe* thresholds help for an optimistic path that therefore doesn't require everyone online? (Whether 1 of N or t of N is different.. i guess it just depends?).
tbh, I am using the federation for a mining pool design, where the payout is a DLC contract. The federation acts as an oracle, and voila, the miner gets a unilateral exit, with DLC backed payout guaranteed as long as 1) miner produces hashrate and 2) federation remains honest and signs the attestation.
I have been wracking my brains to see if we can do anything with the federation for an L2 payment mechanism.
I see two problems, a) without PoW how do you keep federation honest and not start sybil attacking b) does it really do anything useful at all, as you asked the question too. I have this uncanny feeling someone somewhere will figure this out. Threshold signatures are way too cool to not give us an interesting future.
