Blockstream has their own private ecosystem set up. Sort of a side chain.

They call it "federated". Basically trusted people run nodes akin to Bitcoin. To participate, blockstream will match the BTC deposit with a Liquid Token. Called a peg in. Then you can use that in the Liquid system or peg out. On the way out you get a new wallet address I believe as well.

It's basically a trust chain ecosystem. Not a shit coin. More of a closed house trust.

I might have this a bit wrong but that's my understanding from memory.

Read between the lines if needed.