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It's basically a federated state chain. Shinobi wrote about state chains recently for BM: https://bitcoinmagazine.com/technical/bitcoin-layer-2-statechains. He doesn't touch on Sparkchain but it'll tell you most of what you need to know.
The main tradeoffs stem from it relying on a central coordinator (in spark's case a federation of coordinators):
  • if all coordinators are dishonest they can double spend a transfer to a recipient with the help of the sender iirc
  • you can unilaterally withdrawal but it's like a lightning force close and your bitcoin is unspendable for a few weeks
  • also, I'm not sure if it has consequences for using bitcoin on spark chain, but their token protocol allows for operators to coordinate on freezing funds ... afaict this doesn't affect the bitcoin part of the protocol considering that lrc20 does not hit the chain, but idk.
Spark's docs are very well written, so I'd go there: https://docs.spark.money/home/welcome
Sounds like corporate Liquid
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165 sats \ 0 replies \ @k00b 14 Jun
It is a lot like liquid. The main difference is that you can unilaterally exit and get your L1 bitcoin back - which is the main criteria met by things we consider a layer 2.
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Thanks for the info. I still don't quite get it, sounds like it's on the custodial spectrum to me from bitcoin...ln...spark...liquid...ecash
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20 sats \ 0 replies \ @k00b 14 Jun
it sounds custodial
It's not custodial, but it's not free of tradeoffs either. Almost forgot to answer that one.
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