LIQUID TRANSACTION FEES ARE PAID TO BLOCKSTREAM NOT FEDERATION MEMBERS.
SEEMS LIKE A BROKEN INCENTIVE BUT FEW TALK ABOUT IT?
Discussion
TIL
Need an update Rip with mallers and back
Maybe there are other incentives?
do you have any recommended sources about that topic?
What is the incentive for federation members to participate then?
Maybe having a system that provides confidential, censorship resistant transactions? Seems like a strong incentive to me
nostr:npub185h9z5yxn8uc7retm0n6gkm88358lejzparxms5kmy9epr236k2qcswrdp is one of the creators of Liquid, and he says we should not use it. Liquid is for exchanges. It’s not a proper sidechain. 
I would love to hear the arguments supporting his statement. I believe there is no "black and white" answer, just different trade-offs that users must evaluate and decide if they are worthwhile for their particular use case
When the post was made, on-chain fees were zero and lightning was starting to take off. Today, people have an understanding of lightning and the liquid trust model much better. The popular discourse on its use makes more sense than it used to, though the federation set is…not commonly discussed so it’d be nice if that were more front-and-center in the discussion.
fxxx liquid. fxxx blockstream🖕
nostr:note1u25r5kvmxtcn30cjjuek4dfaajvws36jd2n80w8p8mdpmcw3dlqssgtnu2
Thank you for shedding more light ✨️ 🙏
Yes, Blockstream’s website even says Liquid is not a true 2-way peg, and a soft fork would be required. According to Paul Sztorc, a total of 10 sidechains is all Bitcoin really needs. I can’t imagine 8 billion people using 10 Liquid federations.
If you don’t mind me asking, was there a legal reason Liquid went with confidential transactions instead of private?
All the members report to and are subject to the IRS and SEC, at some point along the way. How confidential and resistant is that ?
👀
Trade Offs
El Salvador Is More Of A Blockstream and Bitfinex Country
All The Bitcoin Backed Bonds And Securities Will Be Traded Over The Liquid Network
Think About It🤔
Liquid is not a proper sidechain. True 2-way peg sidechains are not possible without a softfork. Their own website says this.
Neither Liquid nor Fedimint can scale Bitcoin or give us decentralized self-custody and privacy. #Bitcoin has to change, and the government does not want that to happen.
Considering that no one uses liquid...not surprised anyone has looked into it. Explains why no merchants give a shit about adopting it either.
Thanks for digging 🤙
I asked Adam about the logic for it last year, he told me the fees go to pay for rotating the federation’s onchain utxos, to refresh the timelocks
if they dont get regularly rotated, eventually the onchain funds can be spent by a smaller emergency keys multisig
it’s a normal cost for any multisig thats using contracts with timelocked emergency spend path. basically every corporate structured multisig works this way, see anchorwatch contracts
honestly, big benefit of the way LN contracts are constructed is they dont need onchain refreshes to stay valid over time
iiuc blockstream has basically been eating this cost, maybe at some point tx fees onchain will cover it + help payback what they already spent
definitely a good question about incentives to run sidechains tho — unless you’re taking margin on swaps to/from the chain or issuing a token there isn’t really much incentive to run one, afaict
LND force closure SUCKS that bottom line
telling someone to RUN NODE selfcustody for hold 1000 SATS - losing 100000 SATS in channel CLOSING is BULLSHIT PROPAGANDA of certain maximalist here
that seems more LOGICAL answer to accept
Adam Back was cited in the White paper. Federations are a way to donate your bitcoin to an organization, Not to keep it for yourself. Federated tokens are shitcoins too.
Seems like Blockstream may be a sleeping megacorp
TIL
In their FAQs 
HOLY SHIT!! I didn’t know that. That’s fucked up. Should change that. Now I’m irritated.
Their ultimate goal.
nostr:note1kpffp3xr48szuh7jventmfwac789menesecat49et4pyq8ph8wvqklrjad
#Monero
#m=image%2Fjpeg&dim=1200x675&blurhash=iVH2%24OyZOSxHnNXRWZs9ox4p%25Fe%40oyWBV%40t6bcV%40x%5DMy%24yR%3ARjofj%3FV%40bHWBWBayt6WZt6V%40WUofV%5Bj%3DR%2Baet6WEaxj%5Day&x=0a9e3c52ffd0ac930588603b34393c352a9e9211ad610835f4b2049e1a4bff5c
Using #SideSwap (sideswap.io) as an example, they charge a 0.1% fee to peg in from & peg out to the main chain. They provide a swap market for things like liquid tether, and along with this an instant swap service where they take the other side for ~0.75% spread. These fees likely provide proper incentive. Transaction fees currently seem insignificant in comparison.
I'm looking forward to learning about & appreciate #Mutiny Wallet's hard work to integrate #fedimints. But also appreciate #Blockstream's great work with liquid and the use cases it fills now. I really hope Fedi & Mutiny teams take advantage when appropriate of the knowledge, technology, & research Blockstream has provided with liquid.
1. Business is not evil. And the tradeoffs for this network are tweaked and different than the base layer by design. No one has to use it.
2. I see a lot of black and white thinking in these comments which will lead us in circles. We HAVE to choose which compromises we are willing to use on various layers. And I agree this one needs to be explored for sure. I am grateful that we can start having this conversation.
3. Elements and Liquid are FOSS. Anyone can fork it, and change the incentives as they wish. I imagine Blockstream would love to see this, and would likely want to work with the other implementations to allow for interoperabvility between the forks.
Finally... The only way I see for us to build good software on top of bitcoin is to choose the tradeoffs we want to see and weigh them against the benefits they provide. AND take the time to understand them. Again I am glad you brought up this topic nostr:npub1qny3tkh0acurzla8x3zy4nhrjz5zd8l9sy9jys09umwng00manysew95gx since we really SHOULD be talking about it. A federated trust model is inherently more centralized than the base chain. This is going to necessarily lead to questions as to the incentives it creates. I just suggest we walk in with both skepticism as well as an open mind.
Liquid is, in my opinion, one of the brightest lights in the realm of bitcoin scaling. While we all hyperventilate over the formation of ETFs which are 100% centralized "Bitcoin Banks", #Blockstream is actually building the foundations of a distributed "Bitcoin Bank" that retains a degree of decentralization while offering strong benefits to those who choose to use the network. AND the software is there for anyone else to implement with.
Carry on with talking about it, I'd say!
hmm noted - Burned 7.50667257 L-BTC
% is really small - compare that abrupt LND channel closing FEE on mainnet - its insignificant amt
LND has only ~5000 BTC locked
observe some dummies in the thread unware that 50000BTC LOCKED in EVM chains WRAPPED BTC
ERC20 BEP20 AVAX20 PLG20
those are real BTC LOCK NOBODY TALK ABOUT THAT in NOSTR why ?