It's ultimately a trust-based solution, and Scamson referring to it as an L2 is the first trust violation. I can accept trusted solutions when they're honest and decentralizing, but Liquid has doubled-down on the opposite.

Federation is also a scam word, trustodial is trustodial. We have no idea how many signatories are actually in the federation in terms of how distributed those keys are, every Federation is Schrodinger's node.

The infrastructure still has a single point of trust in Blockstream, rendering any actually federated peg pointless.

It's another example of broken incentives, they generate swap fees and think they're cute by scamming regulator with technobabble to make it sound not like a money business. In so doing, they have to mislead to the unsophisticated user even if most of us know the truth.