According to @Excellion, it's possible stablecoins closely tied to the traditional banking system, such as Tether and USD coin (USDC), could see a new competitor emerge in the form of a bitcoin-backed stablecoin issued on Liquid.https://cryptonews.com/exclusives/el-salvador-will-be-a-serious-test-for-bitcoin-s-layer-2-net-10837.htm …
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Replying to @kyletorpey @Excellion
I've been thinking more about it and that's a tough one. Who is the counter-party? Unless you have liquid market you're basically hedging a single position I guess you start w/ several market makers holding BTC balances and hedging against each other with DLCs.
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Federation participants probably have such market positions already on exchange (respective trading desks) and could possibly divert some of this liquidity to on-chain contracts to bootstrap the liquidity.
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I would love to see an algorithmic stablecoin running fully on Liquid
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I think we're getting there. We'll just need your liquidity :P
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Happy to help. Would be DAI style with liquidation event?
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I haven't thought this true completely but I'm sure
@Chris_Stewart_5 has a better idea of scaled up DLC market?1 reply 0 retweets 2 likes -
Replying to @bergealex4 @paoloardoino and
Here is what I drew up awhile ago for how matching can occur on a CEX, but settlement/clearing happens later on the bitcoin blockchain https://docs.google.com/drawings/d/1PyUVGrzkBRFf_jIO3hdWKqyJUQqXif-NpZnfxl6gHrw/edit?usp=sharing … LMK if the permissions aren't right
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Replying to @Chris_Stewart_5 @bergealex4 and
In general for decentralized match making, this really seems to be a limitation of the utxo model compared to the account model. IMO, this gives account chains a regulatory advantage as the "blockchain" does the match making.
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Finex new engine has support for JSON metadata that can even be semi-signed / raw bitcoin txs. Upon execution the trade contains the meta of the order. So ideally one can build a service that implements a market maker over Finex really easily, with chain settlement
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Replying to @paoloardoino @bergealex4 and
Chris Stewart Retweeted Chris Stewart
Yeah, this is the ideal flow IMOhttps://twitter.com/Chris_Stewart_5/status/1409617015074140166 …
Chris Stewart added,
Chris Stewart @Chris_Stewart_5Replying to @bergealex4 @paoloardoino and 2 othersThe dream is you deposit into an echange like Bitfinex with Lightning, you get matched for a DLC, they print the bitcoin transaction from their matching engine, and you are now in a DLC. You can reduce your custodial exposure to under an hour0 replies 0 retweets 2 likesThanks. Twitter will use this to make your timeline better. UndoUndo
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