Improving the Federated 2-way Peg by Matt Luongo (Devcon5)

Fri, Oct 2, 2020, 12:00 AM

Visit the https://archive.devcon.org/ to gain access to the entire library of Devcon talks with the ease of filtering, playlists, personalized suggestions, decentralized access on IPFS and more. https://archive.devcon.org/archive/watch/5/improving-the-federated-2-way-peg-a-new-sidechain-design-for-trustless-bridges-on-ethereum In this talk, we'll introduce a novel mechanism to maintain 2-way pegs, as well an initial implementation of a Bitcoin peg on Ethereum. ## Problem Bitcoin's stable codebase is a strength. Developers are loathe to introduce significant changes, reasoning that a store of value should prioritize stable operation. While this cemented Bitcoin's place in the market, we all know the costs- Bitcoin's ossification at the expense of public experimentation and diverse use cases. In 2014, the answer to this problem was "sidechains". Trustless sidechains are the ultimate vaporware- and since 2014 the goalposts have moved. ## Approaches Blockstream's Liquid touted itself as the "first production sidechain", built on a multi-sig federation. No hashpower validates the sidechain-- funds are fully trusted to 15 Bitcoin multi-sig participants. BitGo's WBTC takes a similar tact-- but instead of building a new chain, custodians operate on Ethereum. Neat! Unfortunately, they require KYC :( These centralized projects have a few custodians that can be convinced by governments-- or their own interests-- to censor or seize funds. ## Design We propose a new approach-- the *bonded, multi-federated peg*. We believe this is the best candidate for a sufficiently trust-minimized alternative, unlocking Bitcoin for use in DeFi. Speaker(s): Matt Luongo Skill level: Intermediate Track: Execution layer Keywords: technical Follow us: https://twitter.com/efdevcon, https://twitter.com/ethereum Learn more about devcon: https://www.devcon.org/ Learn more about ethereum: https://ethereum.org/ Devcon is the Ethereum conference for developers, researchers, thinkers, and makers. Devcon 5 was held in Osaka, Japan on Oct 8 - 11, 2019. Devcon is organized and presented by the Ethereum Foundation, with the support of our sponsors. To find out more, please visit https://ethereum.foundation/