⚡Metrics, we are hiring a Quant Developer, Discreet Log Contracts and much more!

Welcome to the fourth issue of this newsletter which covers market trends, Lightning Network developments and updates about LN Markets.

If you enjoy this content, feel free to spread the word!

🔥🔥🔥🔥 Metrics

The rally continues for all of our metrics!

We have now reached $4 million in aggregate volume traded on LN Markets:

Our users seem to have appreciated our latest upgrade:

  • Stop-loss orders already account for 5% of our trading volume
  • 20% log in with decentralized authentication (10% with LNURL-AUTH, 10% with Joule, 80% with other Lightning Wallets)

LN Markets lightning node now has a capacity of 4.2 BTC with 100 channels opened.

⚒️ Building

We shipped another LN Markets upgrade with mostly back-end improvements. Indeed, we have been fine-tuning the security and optimisation of our trade engine to deal smoothly with the spikes in volume we are currently witnessing.

We thank you all for your feedbacks and help on debugging, with a special thanks to our very own Jc Crown! Feel free to let us know on Twitter and Telegram which new features you would be most excited about.

Last but not least, we are looking for a Quant Developer to join our trading team in charge of the structuring, pricing, and risk management of LN Markets’ positions.

You will work directly on the trading desk and hand-in-hand with our development team. More details and how to apply on this link.

🤓 Discreet Log Contracts (DLCs)

You may be familiar with the term Decentralized Finance or “DeFi” that encompasses new financial products or services being built on top of blockchain networks, mainly Ethereum.

A common criticism to most DeFi projects is known as the “oracle problem”, which refers to the fact that most of these projects currently rely on centralized or federated oracles for external data feeds. What happens when these oracles go down?

Thaddeus Dryja, co-author with Joseph Poon of the Lightning Network white paper, published in 2018 another paper on what he called Discreet Log Contracts (DLCs).

DLCs is a system that could enable setting up contracts between two parties directly on the Bitcoin blockchain, while minimizing the trust required in the oracle that provides external data. The parties can determine the outcome of a contract without them having to notify the oracle.

Indeed, as the MIT Digital Currency Initiative puts it:

“By creating a Discreet Log Contract, two parties can form a monetary contract redistributing their funds to each other, based on preset conditions, without revealing any details of those conditions to the blockchain. Its appearance on the blockchain will be no different than an ordinary multi signature output. Therefore the contract is discreet in the sense that no external observer can learn its existence or details from the public ledger.”

Discreet Log Contracts make a special use of Schnorr signature, not yet implemented in Bitcoin, but since the Schnorr signature does not happen on-chain, DLCs can already be implemented on top of Bitcoin.

And indeed, several teams such as Crypto Garage, Suredbits, and of course the MIT DCI, are actively developing DLCs implementations.

Along with the RGB protocol (described in our #3rd issue), Discreet Log Contracts may enable to issue new assets on top of the Lightning Network.

The future is bright!

🔮 Reading

Not one, but two must-read by Ryan Gentry and Marty Bent on how Bitcoin and the Lightning Network are changing the way we use the Internet.

As Ryan puts it:

"The Lightning Network is maturing into a new self-sovereign authentication and data network—with payments embedded as a first-class citizen."

And a special thanks to Marty for his post that we could send to our families to try to help them understand what we are doing with our lives 😬

📺 Video

Very interesting talk by the one and only Elizabeth Stark, co-founder and CEO of Lightning Labs, which keeps shipping awesome products for Lightning Network global adoption such as Loop and of course LND.

In this talk, Elizabeth describes three emerging use cases for the Lightning Network:

  • Lightning Chat with clients like Sphinx
  • Lightning Gaming with MintGox and Satoshi’s Games
  • Lightning Finance with LN Markets and new financial products that could run on top of Lightning with DLCs and RGB protocol

If you prefer the written format, here is a concise summary of another talk Elizabeth gave last week, by Kyle Torpey.

⚡ Bonus 1

Nice initiative by CryptoSou, whose stated goal is to share the possibilities of the Lightning Network, to spread it everywhere, and most of all to have fun!

He / she has started sharing publicly all his / her trades on LN Markets in this spreadsheet. 10% of his profits are given away, only via the Lightning Network.

Disclaimer: he / she is not a professional trader, nothing in his / her project should be considered as financial advice, and he / she is not affiliated to LN Markets in any way.

⚡ Bonus 2

J.K. Rowling trowling the Bitcoin community was a major Twitter event this week, but what we found more interesting was Elon Musk’s reply, which echoes the candid FeD’s chairman Jerome Powell:

"We print money digitally. As a central bank, we have the ability to create money."

Please feel free to reach out to us on Twitter and Telegram.

Thank you all for the support and let’s keep building a BILLION sats company together!