Author: Web3CN

This article will highlight some of these projects and update the more mature projects on Liquid and their goals for 2023.

Preface

In this edition of the Layer 2 report, we take a deep dive into the key projects on Liquid and the plans their teams have for 2023.

Despite a slowdown across the industry, Liquid has made significant progress in expanding its ecosystem. This is mainly due to the gradual maturity of those projects under development. This article will highlight some of these projects and update the more mature projects on Liquid and their goals for 2023.

1. Blockstream

As a technical supporter of Liquid, Blockstream conducted in-depth development based on DynaFed in 2022 and further updated the Peg-out Authorization Key (PAK) and Blocksigners. DynaFed brings significant upgrades to the network, making Liquid's functionality more flexible and easier to add or remove, thus building a more stable sidechain system.

At the same time, Elements v22.0.2 has also been launched. This version ensures that Liquid's code is synchronized with Bitcoin Core 22.0, and a series of optimizations and improvements are made to DynaFed parameters. Currently, the team is evaluating Elements v22.1-rc1 and plans to release the full 22.1 version next month (so far, Elements has been updated to version 22.1.1), which will fully support Liquid Testnet. In addition, they are also preparing to migrate it to Bitcoin Core 24.0, which is expected to be completed later this year.

In October 2022, Blockstream wrote and published a white paper titled “Unmanaged Options with Elements.” The post provides an in-depth look at the new scripts and opcodes that enable a variety of financial products on Liquid, such as non-custodial limit orders and fully collateralized options contracts. The team plans to release reference implementations of these new options contracts in the near future.

Another Liquid project led by Blockstream - Build On L2 (BOL2). BOL2 is a one-stop community platform that will provide developer and business documentation, online hackathons, masterclasses and other events for Bitcoin enthusiasts interested in building applications on Core Lightning and Liquid. BOL2 is scheduled to launch later this quarter.

2. Bitcoin Reserve

Bitcoin Reserve is a Bitcoin-only brokerage and a member of the Liquid Alliance. Last year, it added an L-BTC purchase option on its platform. Customers can purchase L-BTC from as little as €10 to over €10 million via bank transfer and self-custody in any Liquid wallet of their choice.

Since the news, Bitcoin Reserve has added an L-BTC selling option and expanded its services to Liquid USDT.

3. Bitmatrix

Bitmatrix, an AMM protocol built on Liquid, released its mainnet beta version in the fourth quarter of 2022, supporting trustless liquidity provision and custom LP fees between L-BTC, stablecoins, and other assets.

According to Bitmatrix chief engineer Burak, multiple updates in the first half of 2023 will include providing users with more advanced price and analysis charts showing TVL, fees, revenue and other indicators. He also said that an information panel for asset pairs is also planned, with a design that will resemble a “CoinMarketCap for Liquid assets.”

Looking ahead, Bitmatrix plans to use Simplicity to optimize network applications in 2024 to reduce transaction sizes and costs and enable multi-party pools. Currently, each pair of assets requires a separate pool to be deployed. For example, when trading X and Y, there must be a direct pool for XY. But under a multi-party pool design, you can trade X and Y indirectly; you only need to have a pool with X, LBTC and Y, LBTC.

4. DIGTL

DIGTL Markets (DIGTL) provides the infrastructure for capital markets, enabling issuers to manage their digital securities and reach retail investors around the world in a compliant manner.

After joining the Liquid Alliance in early 2022, DIGTL subsequently provided MERJ Exchange with technical support for BMN investors and helped it be listed and traded on the exchange, bringing more affordable prices and trading units to BMN investors around the world. According to Kyle Fry, co-founder and CEO of DIGTL, DIGTL plans to further expand its cooperation network of stock exchanges and cooperate with large asset issuers, including a carbon offset project worth more than US$1 billion, which will Choose Liquid as its registration platform.

Additionally, DIGTL is a founding member of 1transfer, an SEC-registered transfer agent designed to provide issuers on Liquid with the additional regulatory structure needed as part of its full-service platform.

5.Fuji Money

Fuji Money is a non-custodial, bitcoin-only lending platform that allows users to borrow stablecoins and synthetic assets and conduct peer-to-peer transactions. Since launch, Fuji has offered early closed beta access to the first 100 subscribers on the waitlist and successfully integrated Lightning’s submarine swapping feature.

FUJI USD (FUSD), a USD-pegged, Bitcoin-backed stablecoin, will be the first Fuji synthetic asset available on the platform. Users can borrow FUSD by depositing Bitcoin within the Liquid smart contract (i.e. the agreed address), which can be done through the Lightning sub exchange or directly using L-BTC.

6.Raretoshi

Raretoshi is a physical and digital art marketplace built by Adam Soltys and his team using the open-source L-NFT protocol to connect patrons with their favorite Bitcoin artists.

In 2022, Raretoshi brings new features to the platform, such as tipping artists directly, switching between currencies, and leaving comments on specific artworks. One of the biggest updates is an encrypted messaging system that utilizes the Nostr protocol based on encryption keys.

7. SideSwap

SideSwap is a non-custodial wallet and decentralized exchange that allows users to enter and exit Liquid and conduct instant, trustless swaps between L-BTC, USDt, and EURx. Assets like security tokens and certificate tokens, which cannot be atomically swapped, can be traded on decentralized order books. SideSwap is one of the easiest ways for newbies to acquire L-BTC and quickly experience the advantages of Liquid.

In a regular UI update in 2022, SideSwap tokenizes a certain amount of equity on the secondary market. Fifty thousand shares were reserved for the first users to register on its registered agent PEGx, some of which are still available. Last quarter, SideSwap also supported offline swaps by default in its wallet and order book, a major improvement to platform trading. Offline exchanges benefit from the new LiquiDEX protocol launched by Blockstream engineer Leonardo Comandini.

SideSwap founder Scott Millar has ambitious plans for 2023, including adding Fuji’s Bitcoin-backed FUSD stablecoin and synthetic assets (currently available on testnet) as well as integrating hardware wallets like Blockstream Jade so users can directly access Their signature device performs the exchange.

8. STOKR

STOKR is an investment marketplace for alternative assets. Asset managers and founders will be able to conduct initial offerings of securities on the platform through Liquid after obtaining a license in the EU. From business entrepreneurs to asset managers, STOKR provides a full set of technology deployment, investment structures, payment gateways and support for compliant digital securities issuance.

To date, over $60 million in assets have been tokenized on STOKR. In the past, STOKR has provided issuance services for the Exordium EXO token and Blockstream Mining Note (BMN), while vetting issuers and providing due diligence for investors.

STOKR has become the only digital securities issuance platform registered as a virtual asset service provider (VASP) by an EU member state. This honor, awarded by Luxembourg’s financial regulator CSSF, gives the company a solid regulatory footing in Europe.

Looking forward to 2023, STOKR co-founder Arnab Naskar said the company will continue to focus on building capital market infrastructure and providing financing and tokenization solutions to small and medium-sized enterprises.

“We will be building more cutting-edge capital markets tools on Liquid Network in 2023. Our focus will be on providing solutions to established asset managers and fund managers who are facing liquidity issues in today’s market. Get ready for A game-changing year”

One of the upcoming security token offerings on Liquid is Angelpreneur, a Swiss entity that invests in startups to help them scale and develop successful franchise models.

9. Close

Zaprite is a platform that offers a range of self-hosted merchant tools such as invoicing, accounting and bookkeeping. The web application, currently in the MVP stage, allows users to connect their own nodes or wallets to get paid in Bitcoin, Lightning Network and Liquid.

In 2022, Zaprite officially became a member of the Liquid Alliance and added Liquid payment methods to its invoicing system. Heading into the new year, Zaprite founder and CEO John explained that the team will soon be migrating its codebase to integrate Liquid into its Checkouts functionality in new releases.

Checkouts are highly customizable, branded pages hosted by Zaprite that allow users to accept payments with unique processes and information requests. Checkouts can connect to users' own websites to create instant e-commerce solutions.

Zaprite will also develop new hosted services such as point of sale, product store, donation page and ticket sales. These can all be connected to existing Checkouts to provide merchants with a rich Bitcoin and Liquid payment processing experience.