Two questions:
1 - what is a fidelity bond?
2 - what does it mean to be a layer 2 protocol on top of nostr?
N3XB: Naive Nostr No-KYC Exchange for Bitcoin
N3X (Naive Nostr No-KYC Exchange) is a layer 2 protocol inspired by, and runs on top of Nostr. The goal is to be a simple but extensible protocol to facilitate exchanges and marketplaces in an interoperable, censorship-resistant, privacy-aware, and decentralized manner. The initial example of N3X might be a Bitcoin <=> fiat decentralized exchange protocol, codenamed N3XB, but any type of marketplace or exchange should potentially be enabled with N3X.
Discussion
not sure about #1, but #2 sounds like it's just using nostr relays and architecture. possibly proposing a new NIP and event kind. honestly it just seems like a very in depth NIP to me. perhaps im oversimplifying it.
A fidelity bond is some locked-up funds that you lose if you do bad stuff.
1. Think of it like a deposit you make when entering into a trade with stranger having no trusted third party. The deposit gets returned to you if you don’t cheat or break pre-listed trading rules, and all or a portion of the deposit gets taken away if you cheat or break trading rules. Bisq had been using fidelity bonds in its trades for many years. The model had proven to work.
2. Correct me if I’m wrong, but from what I read, it seems the protocol wants to exist on top of the nostr layer without requiring NIPs or big changes to nostr protocol. Like how http or ftp is built on top of tcp/ip.
Thanks for the details :-)