We gotta talk about cross chain.

I've seen three main architectures -

Collateralised multisig with bolt on AMM (thorchain)

Intent based cross chain with Oracle (Across)

Proxy block headers and verify (l0)

The problem with the last two is they're incompatible with Bitcoin. The problem with the first one is trust assumptions and brittle architecture. I imagine the incoming govt will disincentivise the need for resilient cross chain rails - but it's still important!

Is anyone working on this?

I'm actually so glad you asked. I love atomic swaps - they're basically fully self sovereign and you can construct settlement infrastructure that is Very Decentralised (tm). The issue is something called the free option problem

Basically due to the hashlock/timelock construction, if you commit ETH to trade for my BTC, and the price of your ETH goes down relative to my BTC in the period it takes me to commit - i have a "free option" to buy your Eth at commitment price for the duration of the timelock. Worse, your eth is committed for the duration and you can't initate another swap.

I think this is solvable by somehow pricing that option on chain with a decay function, but in practice this is very annoying to do on the bitcoin side

Much to think about here.

where do atomic swaps fit into these 3? i see them mentioned as another kind of bridge especially with older chains like btc

@jort-user.eth, you just received 7 DEGEN from @ainiyoumen!