I'll post for Darth since he's probably at the citadel.
From #318849:
Liquid is not a L2... is a sidechain.
Liquid was a good intention. It was coming up early in the block size wars as a proposal for exchanges, to have some kind of interoperable network to move funds between them, faster and cheaper than BTC onchain, but still using BTC.
I kinda agree with that use case. A federation that is moving funds privately between them.
But then LN was launched and come in force and Liquid kinda lost the use case.
The block size war was also over, segwit in place and onchain mempool liberated, so even the exchanges that were excited about Liquid, they were still preferring to do it over onchain as usual.
LN got more and more grip and Liquid was slowly forgotten and became useless.
Now Blockstream, want to push people into using it as it would be a "cheapest and fastest" way instead of LN, because they do not want to see it terminated (as nobody is using it). In the end they put a lot of effort and money to build it.
IMHO they should go back to the original idea to be used for private entities and not pushed to large masses of users.
Now all those onchain maxis want to use Liquid instead of preparing in time, with calm new LN channels. That's why this crazy mania with Liquid. But as usual when the onchain fees are going down, Liquid use is going to meaningless until zero.