Eight companies have joined the Liquid Federation in the last month. The total supply in circulation on the Liquid network is 2,593 L-BTC, equivalent to more than USD 31 million.
In a matter of a few months, the amount currently in circulation on the Liquid network, a Bitcoin sidechain, has increased by 63.29%. This relates to the new additions that the Liquid Federation had made, since the decentralization of the network increases as it adds projects.
The Liquid network reached more than 2,593 L-BTC, which is approximately the amount of money currently in circulation in that market. In recent months, its growth has been remarkable, considering that its total supply in circulation in March alone was 952 L-BTC, a little more than all the money in circulation on the Lightning network. It is important to remember that one L-BTC has a 1:1 value with BTC, hence about 31 million L-BTC are recorded on this Bitcoin sidechain.
The arrival of new projects, which are mostly exchanges or investment funds, could explain this growth. They intend to use the Liquid network to take advantage of its speed to verify transactions.
The addition of 8 new projects in late July and another 10 in March now total of 52 members in the Liquid Federation. According to the governance model of the sidechain that Blockstream developed, the addition of more members could help decentralize the network and increase its security. One month ago, they stated that “decision-making on the development of the network is becoming more distributed.”
It does not matter whether the security of one of the keys is at risk in the federated model since the history of the transactions is secured in the rest of the nodes. In other words, if the number of participants grows, the sidechain will become more secure. This is because there is a distribution of responsibilities to manage the validation of transactions.
In the same way, the Liquid Federation’s roadmap includes an upcoming update called Dynamic Federations (DynaFed). It will allow “any of the members to add new officials to operate and secure the sidechain.”
New Members of Liquid Come from Different Sectors
The most prominent new members are companies such as cryptocurrency exchange INX, which recently announced a public sale of tokens with which they plan to raise USD 129.5 million.
In recent months, Satoshi’s Games has sought to integrate the Lightning network into its gaming network. It is also using Liquid to tokenize skins and weapons in its Lightnite game. This allows its players to withdraw them and trade them with other players and verify their scarcity.
Other additions that the Liquid Federation has made include CoinShares, Condensat, JST Capital, Paymium, PetruchevCapital, and Seven Labs. They will run projects on a network designed to provide faster transactions and smart contracts.
In 2020, the Liquid Federation has added companies of the stature of hardware wallet manufacturer Ledger, crypto trading firm MerklePro, blockchain tool developer Wyre, or exchanges Hodl Hodl and STOKR. These join other members of the federation like Bitso, BitMex, and OpenNode.
By Alexander Salazar