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291 sats \ 1 reply \ @w3irdrobot 21 Jan \ on: Fedimint is Self-Custodial ecash
great article. very informative! definitely clears some things up for me.
I do have one question about the swaps to/from btc to the ecash. since it seems the value of the ecash in a federation is not tied to the underlying sats that initially created the ecash, swapping back to btc for whatever reason should not imply that I'm getting back the same amount of sats I sent in to the federation? so there is the opportunity for speculation on ecash value in relation to btc for those inclined to do that. so I could send in 500,000 sats hoping the value of the ecash increases so I can exit and maybe get back 600,000 sats instead?
The theory that it could in fact be more favorable in BTC terms to exit is an interesting one. If a particular mint could be valued less, in theory one could be valued more.
Because of the smart contact module system in fedimint, there's a possibility that the functionality of modules on one mint but not another could push demand to be in that system. If it costs 200k to swap BTC in for Ecash on chain (mining fees) and there's an LN gateway willing to let you come in for 100k fee, in that case your 500k sat swap costs you 600k and netted the gateway (a user of the mint functioning as a swapping provider) an extra 100k profit. In the end, it saved you money.
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