Re #2: the long withdrawal windows don't bother me, because atomic swaps make it possible to get fast trustless exits. The long pegout window is really there to prevent any long term depeg, but you're right, short term deviation is possible.
I'll respond later with my thoughts on #3, but short answer: I think miner theft is not a problem.
Re: Atomic Swaps
I am thinking of the atomic swap providers much the way I think of Fedi lightning providers. The swap providers do not have to be associated in any way with the "side chain controlers" but they do have to trust them. Only difference is the swap providers need to trust the side chain for the duration of up to two withdrawal windows (1year) where as with fedi lightning providers only need to trust until they request an on chain withdrawal. This is a much more intense capital requirement.
Atomic swaps don't depend on a provider or platform. Atomic swaps are direct between the two parties involved, no need for a trusted 3rd party.
If Alice has sBTC and wants to atomic swap with Bob for his BTC, they can do so instantaneously (or at least within Bitcoin confirmation times). Alice and Bob do not need to trust each other. Both are trusting Bitcoin and sBitcoin's consensus, but thats already the case since they intend to use Bitcoin and sBitcoin
The bitcoin side of the swap cannot be reversed without a 51% attack on Bitcoin. The sBTC side cannot be reversed without a 51% attack on the side chain. These attack risks can be accommodated by waiting appropriate confirmation times on each chain before finalizing the swap.
I don't think a majority of sBTC to BTC volume will be peer to peer but rather will involve a swap provider.
Consider.
1. Anyone can deposit into the side using an M5 Deposit transfer of BTC from-main-to-side.
2. M6 Withdrawals take time and require bundles be proposed and accepted.
This results in a situation where sBTC to BTC pressure can build but BTC to sBTC pressure cannot build. From this I assume sBTC -> BTC fees will be higher than BTC -> sBTC. The fees will attract service providers to arbitrage. They will need BTC to swap for sBTC. To transfer back out to have enough BTC to continue the arbitrage they need to wait for a withdrawal. They are effectively locking up BTC as sBTC to earn the withdrawal fee.
Arbitrage traders are not platforms or service providers. There will be a slew of arbitrage traders ready to charge a premium to swap out of sBTC, but they are not 'service providers'. They are not trusted, centralized, or able to interfere with your exit from sBTC. Anyone with a little money can become an arbitrage trader, so there will be many traders competing for volume, so they wont be able to charge too much of a premium or risk losing business to the other arbitrage traders.
Yes, sBTC -> BTC pressure may build, and arbitragers may charge a premium to exit, but if that premium gets too large, it will invite more liquidity into the market, and cause the premium to drop back down.
This is much more desirable than the trusted mint/provider situation we find ourselves in with Lightning, Cashu, Fedimint, etc
Re: depeg:
Under normal situation sBTC=BTC.
However, if withdrawals freeze due to disagreement on withdrawal bundle progression, I see potential for long (months to years) depegs. I don't fully understand how to resolve side chain controversy. 50% of miners abstaining from any side chain controversy freezes the funds. What next?
I think that's the point. A sidechain must be popular in the bitcoin ecosystem. If a sidechain is unpopular, then it stops working, because miners won't care to progress it, or may even prefer to steal from it.
It prevents shit coins and stuff like that. Only a popular, bitcoin-beneficial sidechain that can sustain approval from the miners (e.g. fee competive) will survive. All others will be evicted. Its like a shitcoin garbage collector, lol.
