[bisq-network/proposals] List new Confidential Asset L-BTC pegged 1:1 to BTC on Liquid (#169)

wiz notifications at github.com
Mon Jan 13 17:36:52 UTC 2020

> _This is a Bisq Network proposal. Please familiarize yourself with the [submission and review process](https://docs.bisq.network/proposals.html)._

## Background

Liquid is a federated sidechain pegged to the Bitcoin blockchain, featuring Confidential Transactions (CT) and Confidential Assets (CA). One of the Confidential Assets issued on Liquid is L-BTC which is a fully verifiable 1:1 backed BTC token. The federation members of Liquid include Blockstream, Bitfinex, BitMEX, and many other reputable Bitcoin exchanges and infrastructure providers.

## Summary

While [listing new assets on Bisq is currently on hold](https://github.com/bisq-network/proposals/issues/166) due to the excess Shitcoinery problem we are facing, I feel an exception should be made to list L-BTC as a new asset in Bisq for its privacy use cases, since L-BTC is pegged 1:1 to BTC.

Since the Liquid federation has 100% cryptographically verifiable BTC backed holdings for the 1:1 peg, the risk of “printing money” inflation or other Shitcoinery related issues is quite low. For example, Bisq users will be able trade (or peg-in) BTC for L-BTC, do some CT transactions on the Liquid blockchain, and later trade (or peg-out) the L-BTC for BTC, all without the risk of exchange rate fluctuation between L-BTC and BTC.

**Bisq users will essentially be able to mix their coins with all of Liquid federation BTC holdings.**

## Verification

Since the Liquid blockchain has Confidential Transactions, it is not possible for a Bisq mediator or arbitrator to verify a trade has taken place, unless the Blinding Key is disclosed by the L-BTC seller. The [full documentation has all the details](https://docs.blockstream.com/liquid/developer-guide/confidential-transactions.html?highlight=blinding%20key), but this shouldn’t be an issue for Bisq trading.

## Proposal

* Exempt L-BTC from the current Bisq policy of putting new asset listings on hold
* Waive application fee, if any exists
* Merge PR to add L-BTC into Bisq

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