https://petertodd.org/2024/covenant-dependent-layer-2-review
“Soft-Fork/Covenant Dependent Layer 2 Review”
I've finally published my big article sponsored by Fulgur Ventures, analyzing all the main covenant proposals, and the L2 proposals that would use them.
tl;dr: Ark is pretty cool, and CTV is a good way to get it.
amazing and comprehensive article by nostr:npub1ej493cmun8y9h3082spg5uvt63jgtewneve526g7e2urca2afrxqm3ndrm.
The only thing that I would add is that the analysis of how many channel openings or splicing are possible in a year is not so relevant.
The biggest limit is distribution of wealth, which is likely to follow a power law, which means that ~80% won't be able to afford an UTXO.
nostr:note1num4zp4qefrxtehc6gn8e7p0n43pcaawmkd0cctslvjz58lcvdqs5euxr9
Fees aren't proportional to UTXO value. So it's really hard to know at what price point will people be priced out.
All we can know with this kind of analysis is what is technically possible.
well, one could compute an upper bound by saying that paying more than10% of the UXTO value just for fees doesn't make any sense.
So, people that owns an amount below 10x the average onchain fees for 1-IN-1-OUT taproot tx will be priced out according to this reasoning.
Under a power law sats distribution, this might mean 80% or more of the world.
All arbitrary number I know, but this I feel is the biggest practical limit.
Sure. But that's an upper bound. Hell, it's not even the real upper bound, due to non-btc protocols.
We just don't know without an economic analysis, which I was not trying to do. And economics isn't exactly all that scientific.
