13 sats \ 1 reply \ @SequentiaSEQ OP 20 Jul \ parent \ on: Sequentia: A Bitcoin sidechain that doesn't need a peg/bridge bitcoin
One of the fundamental properties of Sequentia is not needing an exit, unilateral or otherwise, because you don't need an entry.
If there is no peg in (no representation/derivative of BTC on the sidechain), then there is no peg out either of course.
You don't need to represent BTC on Sequentia because you can swap tokens on Sequentia for actual BTC on the mainchain.
In short : using Bitcoin in disintermediated financial markets without needing to pollute bitcoin blockspace.
But maybe my other replies in this comment section can make it even clearer for you?
Sorry, what? I'm not sure we're understanding each other at all. Maybe my other answers in this comment section can clarify something for you?
If financial markets (instruments such as stocks, bonds, commodities...) are to exist in a hyperbitcoinized world, and Bitcoin to be used as money in these markets...
Then I do believe that we need something at least like Sequentia; some viable way of issuing tokens which can be traded p2p for BTC (on whatever L2 most people use for payments; almost certainly Lightning) without polluting Bitcoin blockspace too much.
Not in the same category at all! Lightning is a payments network, Sequentia is a tokenized assets network, both are interoperable in the following senses :
- You can use Bitcoin on LN to buy(*) assets issued on Sequentia (submarine swaps)
- You can load assets issued on Sequentia to LN channels of their own
- You can use Bitcoin on LN to buy(*) assets issued on Sequentia which have been loaded into LN channels of their own (lightning swaps)
- You can perform multi-hop asset payments, ie Sequentia assets loaded to LN can "travel" through BTC channels and vice versa; growing lightning on Sequentia helps BTC payments and vice versa
That last feature was pioneered by Taproot Assets (https://x.com/roasbeef/status/1788624974728790471). However, Taproot Assets relies on committing data to the Bitcoin blockchain directly, whereas Sequentia is a separate chain which doesn't "pollute" Bitcoin blockspace.
(*) swap between chains, p2p and in real-time
Please refer to my reply to @TNStacker
Instead of L-BTC, Sequentia lets you propose transaction fees using any asset issued on it.
So if you're moving USDT over the sidechain, you'll probably want to pay fees directly in USDT. If you're moving an asset with much less liquidity such that no block producer is willing to take it (or an NFT I suppose), you'll probably need something else for fees, but in any case, any asset in your wallet is eligible to propose fees with.
You could even in theory issue L-BTC on Sequentia, pay fees with it and use it exactly as on Liquid, but it's just that the network wouldn't treat it any different than any other asset.
However, anchoring makes it so that p2p swaps between assets on Sequentia and "real" BTC (mainchain/LN BTC) are viable in real-time, unlike with Liquid.
That's what makes pegged BTC pretty much unnecessary (at least for most use cases) on Sequentia.
Sequentia wallets will therefore always first and foremost be normal Bitcoin/Lightning wallets, which will also use your bitcoin seed phrase to generate Sequentia keypairs. In that sense, we're "replacing" L-BTC with just BTC, or BTC over LN.
Also, if you check out the Sequentia signet walkthrough it will guide you on issuing an asset on Sequentia, paying tx fees using it, issuing a second asset and transferring asset 1 with fees paid in asset 2, and even using RBF to change the proposed tx fee asset in an unconfirmed transaction.
Tokens will be issued in the same way as they are on Liquid, in fact the initial version of Sequentia that will be launched in a few months will be almost identical to Liquid in every way except that:
- You can propose transaction fees using any token issued on Sequentia, it doesn't need to be a specific pegged Bitcoin like L-BTC, and it can actually be any other token, such as USDT
- Unlike Liquid or other existing sidechains, Sequentia will support making p2p swaps with real BTC (on the mainchain or on LN) in real-time, so you won't necessarily need to ever have any kind of representation of BTC on the sidechain.
There will of course be infinite different ways for wallets to calculate fee estimates and some may prove more accurate than others, but in the case of tokens which are often used to pay for tx fees, looking at recent on-chain data should prove to be a sufficiently effective method.
What's important is how block producers will choose which tokens they're willing to accept and at what rate. To that end, we've developed a "price server" software which nodes can use to connect to an external data source such as a CEX API or a DEX Oracle such that they can designate a reference unit, calculate the prices of different assets in this reference unit (and apply weights/multipliers depending on factors such as liquidity), and update their list of accepted assets and rates accordingly.
if it is some illiquid shitcoin, there may not me a market rate
That's exactly right. When transferring an illiquid shitcoin, you may also need a more liquid token to pay tx fees with. In such an environment it is obviously very important to be able to bump transactions that get stuck due to the proposed asset, and even change the proposed tx fee asset using RBF - we've implemented a way to do that and it's shown in the demo!
Sequentia is the first sidechain which doesn't claim / try to be a bitcoin payments scaling solution. We are the first sidechain builders that actually believe sidechains NOT to be a good solution for bitcoin payments, and which instead bet on the Lightning Network as the only real L2 for Bitcoin.
Sequentia is anti-bridge technology
Your first question is a fairly good one. Unfortunately, we simply don't know the answer yet. There's still some time before we are ready to go live, and hopefully by then we can assemble a federation that's of equally reputable members as Liquid's, or maybe even share some of the same federation members...
As for the second question, I think there might be some misunderstanding. While there is no "native" peg that's required to pay transaction fees, you can still issue pegged BTC on Sequentia, and it can work exactly like L-BTC does on Liquid. The difference is that:
- You can propose transaction fees using any token issued on Sequentia, it doesn't need to be a specific pegged Bitcoin, and it can actually be any other token, such as USDT
- Unlike Liquid or existing sidechains, Sequentia will support making p2p swaps with real BTC (on the mainchain or on LN) in real-time, so you won't necessarily need to ever have any kind of representation of BTC on the sidechain.
There is no inflation because there is no native coin, block producers are only rewarded with the transaction fees they collect (in whatever tokens they're willing to accept), there aren't any block rewards on top of that.
GENESIS