One difference for sure is that coloured coins are issued on Bitcoin mainchain/L1. This is not scalable or efficient way to use bitcoin blockchain.m 
Discussion
My apologies colored coins are made from bitcoin transactions.
No worries. It’s been a few years since I checked. I forgotten to how they work.
If bitcoiners want to shitcoin they can use Ordinals, Inscriptions, BRC20 tokens, Taproot Assets on LN, Original Pepe bitcoin NFTs, Tokens on Rootstock, Tokens on Liquid, Tokens on RGB etc.
Bitcoiners are not interested in shitcoins for the most part.
I personally dont think DC is going to create a shitcoin casino. I think it will actually enable useful features, market places and apps for bitcoiners.
You kinda just proved my point why we don’t need drive chains.
Look at all the tools built already & we don’t use them.
I believe we dont use them because they are dog shit tools lol with so many limitations.
They are either centralised, federated, require custodians, and very slow/expensive to use with bad UX.
That’s my thought.. everyone was talking about Liquid this way years ago and now we have it and do nothing with it
Still not sure why we haven’t lifted the block size or done Segwitx2 at least
Just flip a switch & lower fees make more room for whatever type of transactions to collect more fees for the miners like it was intended.
It’s really not that hard guys.
Liquid is federated with unknown group of federation members who can steal you bitcoin at anytime if they wish to collude.
Liquid doesnt offer much, 1 minute for transactions to execute which is very slow despite being 9 minute improvement on mainchain.
Liquid has confidential transactions which can still be traced so the privacy of Liquid is nonexistent.
The apps on Liquid are limited. The only app I see being cool is the LBTC and USDT AMM pool. Could be used to hedge your bets to convert USDT to Bitcoin without using exchange. Since the network effect is low, liquidity is low making slippage a problem when using these AMM pools.
Liquid lacks a network effect due to being a permissioned network, slow transactions speeds, lacks privacy and lack of applications.
There is no guarantee DC will succeed.But there is equally no guarantee any L2 succeed. But I am of the view its better to “try and fail” than “fail and never try”.
So, do you like liquid or not? 😂
Never used it
His video today ended with talking about BitVM saying a video is coming out about it tomorrow as a better idea to DCs. I like to think he’s seen this thread 😂
Maybe he should wait til Robin Linus and Paul Sztorcs discussion on Friday twitter space. Could be interesting. You don’t want to say anything dumb prematurely.