Liquid
Overview
Status
Mainnet
Type
Federation
Fee Token
LBTC
BTC Supply
₿0
The Liquid Network is a sidechain that enables users to perform confidential transactions, swaps, issue tokenized assets, and more, on the sidechain. It is managed by a permissioned federation, and does not use the Bitcoin Layer 1 for security. It uses a federated multi-sig to custody the BTC that is used to issue BTC IOUs (L-BTC) on the sidechain.
CUSTODY
DATA AVAILABILITY
OPERATORS
FINALITY ASSURANCE
BTC Supply
Total supply per day
Supplycoming soon
TVL Data Coming Soon
We're currently gathering and building data infrastructure for this network. TVL analytics will be available soon.
Token Contracts
Token Contracts Coming Soon
We're working to collect the various BTC-backed token contracts for this network. Contract addresses will be available soon.
Risk Summary
All BTC pegs have custodian trust assumptions
All BTC backing wrapped tokens on this network are ultimately secured by custodians. Users trust that these custodians will not misappropriate funds and keep their assets pegged 1:1. Each custodian has their own risks. Learn more in the trust assumptions review section.
The network is managed by a federation.
The network is managed by a federation. Users trust the federation to not censor them, halt the network, and freeze user funds.
Trust Assumption Review
BTC Custody
Very High
🛑
Users trust a federation with custody of their BTC. The members of the federation have not been disclosed.
BTC withdrawals are currently permissioned by the Liquid federation. Users must trust that when they deposit BTC into the Liquid blockchain, the signers will not collude and steal their BTC. Most users typically acquire L-BTC on secondary marketplaces, not through bridge deposits. Supported marketplaces for L-BTC are also members of the Liquid federation. Users trust that the federation will not steal the BTC, which would leave their newly acquired L-BTC worthless. The BTC that backs L-BTC is held in a 11-15 multi-sig wallet where 11 (⅔ + 1) of the signers would need to be compromised in order to steal the BTC.
Not all signers for the Liquid two-way peg are publicly disclosed.
Not all signers for the Liquid two-way peg are publicly disclosed.
Learn more about Liquid L-BTC's custody model→
Data Availability
Under Review
🔬
Data is stored and made available by Liquid full nodes. Full nodes must connect to the network via permissioned entities
Data is published to, and made available by, full nodes participating in an alternative consensus network. Anyone can run a node and verify the current state of the network.
Liquid full nodes must connect to bridge nodes to be able to participate in the network. Bridge nodes are run by Liquid federation members
Liquid full nodes must connect to bridge nodes to be able to participate in the network. Bridge nodes are run by Liquid federation members
This section is under review
Due to some nuance related to this specific implementation, we are reviewing a score for this section of the review.
Network Operators
Very High
🛑
Blocks are produced by Liquid functionaries. The identities of the functionary set has not been revealed.
Blocks are proposed and finalized by a permissioned federation. Only a limited number of operators are able to participate in block production.
Finality Guarantees
Under Review
🔬
Liquid blocks are finalized via Liquid full nodes. Full nodes must connect to the network via permissioned entities
After blocks are proposed by a block producer, a majority of the network operators are needed to sign off on the block to propagate it to the network. After this is done, full nodes accept the block and include it in the chain.
Liquid full nodes must connect to bridge nodes to be able to participate in the network. Bridge nodes are run by Liquid federation members.
Liquid full nodes must connect to bridge nodes to be able to participate in the network. Bridge nodes are run by Liquid federation members.
This section is under review
Due to some nuance related to this specific implementation, we are reviewing a score for this section of the review.
Bitcoin Security
Liquid does not inherit any security from Bitcoin consensus participants
In its current state, the network does not inherit security from Bitcoin.
No other token required
Network fees are paid in a BTC-backed asset on the network.
No MEV introduced on Bitcoin
The network does not introduce any MEV on the Bitcoin L1. Users trust the validators of the network to not reorder their transactions to extract MEV.
Does not directly contribute to the security budget
The network does not currently contribute to the Bitcoin security budget.
Withdrawals
Users trust permissioned operators to process their withdrawals
Withdrawals are permitted by the Liquid Federation. There is no way for users to withdraw their funds if the federation censors them. Users can also use a secondary marketplace to swap BTC for LBTC, but also must trust the federation to include, propose and validate their swap transaction within a Liquid block.
Technology
Elements
The network is built with the Elements technology stack. Elements is an open-source technology stack built on top of the Bitcoin code base. Since it is built on the Bitcoin code base, Elements enables the network to be a testing ground for potential changes to the Bitcoin protocol.
Confidential Transactions
The network enables Confidential Transactions which can provide users a higher level of privacy. This feature ensures that anyone, other than the participants in a transaction, cannot see the tokens, and the amount of, transferred between them.
Use Cases
Tokenized assets
The network enables developers and users alike to issue tokenized securities, stablecoins, and synthetic forms of cryptocurrencies.
Testing ground for new opcodes
Since the network has enabled opcodes that are not yet live on Bitcoin, developers can deploy applications there to preview what it would be like on Bitcoin. This includes analyzing the builder experience, potential security vulnerabilities, and presenting how these changes might permanently affect the Bitcoin network.
Source Code
Code is open-source
All code related to the Liquid Network project is open source.