> You can use this to trade options, make atomic swaps, etc.
You can trade options now using DLCs (we pioneered this at atomicfinance (npub1at0…wshk))
Cross-chain atomic swaps have always been infeasible due to the free option problem (folks tried building them using HTLCs back in the day):
https://medium.com/@mchammond/atomic-swaps-eebd0fa8110d
> CTV is actually an advanced NEW smart contract platform that RUNS ON CHAIN.
I think this is a bit misleading, because it is not an entirely generalizable "smart contract platform" that creates a huge surface area of attack like you might see in Ethereum smart contracts. The surface area of attack is well defined, because you specify exactly what the parameters for exiting the locking script. You can create loops for example, but you must define when the loop ends. All possible states of the contract are defined ahead of time.
> Are you familiar with Uniswap and all the MEV opportunities created by financial trading and arbitrage?
As is mentioned in the article, MEV already exists on-chain on Bitcoin in the form of runes. People were sniping them right around the halving and selling at a higher price. And yet, all this activity died down, because it wasn't profitable. People learned that MEV is incredibly difficult to actually extract on Bitcoin, due to the 10 minute block times (which end up being 2 minutes or 40 minutes).
CTV does not enable an AMM to be created (CAT does, but an AMM is also extremely infeasible on Bitcoin due to the 10 minute block times once again, where slippage can be a huge concern).
What specific new MEV opportunities are opened up by CTV? In CTV you must constrain all the inputs and all the outputs, that you're committing to, so you'd have to specify ahead of time, which parties were able to snipe your transaction. It's not like anyone can try to snipe the transaction you were trying to do. And once again, even if someone specified a list of parties ahead of time, them sniping whatever type of contract is still incredible dangerous due to 10 minute block times, making it economically infeasible.
> This trading wouldn’t be risk if it were conducted say on Liquid and later settled on bitcoin.
Once again you can already do trading today of futures, options, bets using DLCs. But the key thing, is these contracts are all P2P, so there's no MEV opportunity. CTV makes DLCs better, but doesn't cause any new MEV opportunities.
I'm trying to understand exactly how someone would construct financial contracts on Bitcoin, that would be MEVable with CTV?
matthewjablack / Matt ₿lack ⚡️🍁 13% Bitcoiner
npub1wf…qsxhy
2024-09-12 14:01:25
in reply to nevent1q…h7hf
Author Public Key
npub1wf7w8mrzqs3uvd8wsp774462d3rtttzwetuhpmzjccgn63emy4ls5qsxhyPublished at
2024-09-12 14:01:25Event JSON
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"content": "\u003e You can use this to trade options, make atomic swaps, etc.\n\nYou can trade options now using DLCs (we pioneered this at nostr:npub1at0mlcdmkakz79zzylzn03k5ntltvhvdxhhupe53asnm5zktgwus4dwshk)\n\nCross-chain atomic swaps have always been infeasible due to the free option problem (folks tried building them using HTLCs back in the day):\n\nhttps://medium.com/@mchammond/atomic-swaps-eebd0fa8110d\n\n\u003e CTV is actually an advanced NEW smart contract platform that RUNS ON CHAIN.\n\nI think this is a bit misleading, because it is not an entirely generalizable \"smart contract platform\" that creates a huge surface area of attack like you might see in Ethereum smart contracts. The surface area of attack is well defined, because you specify exactly what the parameters for exiting the locking script. You can create loops for example, but you must define when the loop ends. All possible states of the contract are defined ahead of time.\n\n\u003e Are you familiar with Uniswap and all the MEV opportunities created by financial trading and arbitrage?\n\nAs is mentioned in the article, MEV already exists on-chain on Bitcoin in the form of runes. People were sniping them right around the halving and selling at a higher price. And yet, all this activity died down, because it wasn't profitable. People learned that MEV is incredibly difficult to actually extract on Bitcoin, due to the 10 minute block times (which end up being 2 minutes or 40 minutes). \n\nCTV does not enable an AMM to be created (CAT does, but an AMM is also extremely infeasible on Bitcoin due to the 10 minute block times once again, where slippage can be a huge concern).\n\nWhat specific new MEV opportunities are opened up by CTV? In CTV you must constrain all the inputs and all the outputs, that you're committing to, so you'd have to specify ahead of time, which parties were able to snipe your transaction. It's not like anyone can try to snipe the transaction you were trying to do. And once again, even if someone specified a list of parties ahead of time, them sniping whatever type of contract is still incredible dangerous due to 10 minute block times, making it economically infeasible.\n\n\u003e This trading wouldn’t be risk if it were conducted say on Liquid and later settled on bitcoin.\n\nOnce again you can already do trading today of futures, options, bets using DLCs. But the key thing, is these contracts are all P2P, so there's no MEV opportunity. CTV makes DLCs better, but doesn't cause any new MEV opportunities. \n\nI'm trying to understand exactly how someone would construct financial contracts on Bitcoin, that would be MEVable with CTV? ",
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