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Liquid Network

Liquid Network is extremely undervalued. People are still thinking about coinjoins and arguing among themselves when they have a much cheaper method.

Remember that transactions on Liquid are confidential, only the signer of the transaction and the receiver can know what amount has been sent, for them Borromean ring signatures are used.

Manual for Dummies:

- You make a peg-in of the amount you want to anonymize, if you have an elements node (Liquid node) or use the decentralized Exchange Tdex the cost will be only the cost of the chain transaction, if you do not have any of the above available you can make a peg-in with sideswap for 0.1%.

- Once you have converted your btc inside Liquid to L-BTC you make a peg-out with sideswap, do not make a peg-out of the same total amount that you have made the peg-in and try to space it in time if there are several. The cost of the sideswap peg-out is 0.1% plus the fee of the chain transaction.

One way to avoid also performing the peg-in is to buy L-BTC directly for example on Bisq.

In the best case, the whole operation will cost you the fee of two blockchain transactions and 0.1% in the worst case 0.2% plus the two blockchain transactions, I recommend you to set up your own node elements or use the decentralized Exchange tdex to perform the peg-in without permission and avoid that 0.1%.

When you make a peg-out you receive btc that are retained in the federation, the allocation is random, so seen from the outside, Liquid is like a classic mixer but without centralized custody as it is federated, your coins enter the federation and when you leave with a peg-out you are given other coins that are not your initial coins thus breaking the heuristics of your initial coins.

All this is done without any KYC, you can increase the anonymity using tor or a vpn in sideswap so that there is no trace of your ip.

DarthCoin ₿⚡️ 1y ago

Don't make Blockstream games... promoting their failed experiement, that now want to bring it back to life.

Liquid is not a L2... is a sidechain.

Liquid was a good intention. It was coming up early in the block size wars as a proposal for exchanges, to have some kind of interoperable network to move funds between them, faster and cheaper than BTC onchain, but still using BTC.

I kinda agree with that use case. A federation that is moving funds privately between them.

But then LN was launched and come in force and Liquid kinda lost the use case.

The block size war was also over, segwit in place and onchain mempool liberated, so even the exchanges that were excited about Liquid, they were still preferring to do it over onchain as usual.

LN got more and more grip and Liquid was slowly forgotten and became useless.

Now Blockstream, want to push people into using it as it would be a "cheapest and fastest" way instead of LN, because they do not want to see it terminated (as nobody is using it). In the end they put a lot of effort and money to build it.

IMHO they should go back to the original idea to be used for private entities and not pushed to large masses of users.

Now all those onchain maxis want to use Liquid instead of preparing in time, with calm new LN channels. That's why this crazy mania with Liquid. But as usual when the onchain fees are going down, Liquid use is going to meaningless until zero.

A TLDR:

the only use case for liquid is this

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Discussion

Cyph3rp9nk 1y ago

I understand your point, but in my case I only want liquid to anonymize bitcoins and at most have a small cache in cases of high fees to be able to continue managing my LN channels.

xmrk ₿ ⚡️ 1y ago

What are your thought on Liquid with Peerswap?

I still want to like Liquid, but even if it wasn't custodial (ok, federation, tiny bit better than average CEX), it is basically equivalent to doubling BTC block size. So if most people start using Liquid because BTC fees are too high, then shortly Liquid fees will be almost as high. Doesn't really help scaling in the long term.