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Fun fact to stir up the pot: There's 49x more BTC wrapped on Ethereum than there is locked up on public lightning network capacity

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Now compare how much WBTC is self custodied vs how much lightning BTC is self custodied.

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I think most WBTC is operating in defi, controlled by private keys. Quite a bit of lightning btc is operated/controlled by KYC'd financial intermediaries... Not sure which has a higher self-custody ratio. It'd be an interesting study...

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0% of WBTC is self custodied 😏

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The WBTC is self-custodied. You can argue (fairly) that the backing BTC is not. But since one can trade WBTC permissionlessly into other fully self-custody assets easily (like ETH via Uniswap or back into BTC via Thorchain) it's not correct to assume all WBTC is permissioned.

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You can trade WBTC as long as other people post asks. If there's a loss of confidence in the management of the underlying asset, you're gonna have a hard time finding an exit trade...

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Uniswap and Thorchain are liquidity pools, not order books, but your point still stands. Nobody should consider WBTC = BTC. The former has risks the latter doesn't. But that doesn't mean WBTC is useless/worthless either.

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I believe we have successfully come full circle to the point that WBTC and lightning BTC are apples and oranges!

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And I find both fruits to be delicious. Joking aside, has anyone done analysis on what portion of lightning btc is held by permissioned intermediaries (Strike, Chivo, etc)?

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Not in-depth, but from eyeballing top capacity nodes I'd estimate ~50% of lightning capacity is managed by custodians. This is to be expected not just due to convenience, but because most payments are b2b & c2b, not c2c as I explained in this presentation

youtube.com

Lightning Conference Berlin Day1

10:00AM OPENING REMARKS10:10AM JAMESON LOPP: Enterprise Lightning FTW10:30AM RUSTY RUSSELL11:00AM FABRICE DROUIN11:20AM CONNER FROMKNECHT11:40AM ...

11:18 AM · Oct 8, 2022

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#DEX liquidity pools #Bitcoiners have a difficult time to wrap their heads around it,, they need a bit more time for understanding.. Ill just keep repeating this information like a broken record, standard procedure

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Regardless, the avg person is like water - find the easiest route. They’ll choose a custodial route 9/10 times. It’ll be a thing as adoption goes up. In many ways, lightning looks like a rebuild of 1980s commercial banking - custodial silos. It does have optionality though.