𝟏𝟎𝟏𝟎𝟏'𝐬 𝟏𝟎𝟏 - 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝟏

How Discreet Log Contracts work in Peer-to-Peer Futures trades?

Trade while keeping your precious sats in self-custody!

#P2P #SoundFinance #Bitcoin

Say Jay is betting that Bitcoin price will get higher at a certain date

Bob's taking the opposing bet, claiming it'll be worth less

This is it - that's basically what we call FUTURES trading

Jay and Bob fill a contract with equal parts of corn (a 2-of-2 Multisig)

Each of them places 1 corn in the contract

If Jay wins, he gets his corn and Bob's, and vice versa

They also both pre-signed the 2 possible outcomes of the contract

DUE DATE!

If one of them is a bad player, the oracle publishes the corresponding signature, thus closing the contract

That's it, the Discreet Log Contract has been closed, and there's nothing to see on-chain, just a regular transaction! (that's why it's Discreet)

A note on the oracle :

We've made it fun, but in fact, the Oracle has no idea a bet is taking place. His only job is to certify the price of bitcoin

We may use a quorum of oracles who have no idea about your contract, or that other oracles are being used

That's it for this first episode!

And if you want to learn more, you can visit our blog, we have articles on DLCs, self-custodial trading, and more!

https://10101.finance/blog/dlc-to-lightning-part-1

If you learned something, we'll appreciate any support, you can also share this thread with your friends!