If you are reading this post, you may have already heard that we have closed all Lightning channels with our users, replacing them with DLC channels. That may sound like a step backwards, so we want to explain our reasoning behind this decision and tell you why we think it is actually a good thing.
This is the third and last part of the series on how to bring DLCs to Lightning. Check out the first two blog posts if you haven't already.
In part 3, we are going to show you how 10101 is utilizing virtual channels to bring DLCs to Lightning.
In the first part of this series, we provided an overview of Lightning, Adaptor Signatures and DLCs. If you need a refresher, you can find it here.
In part 2, we will now delve into the approach of expanding the commitment transaction with a custom output. This was our first attempt at bringing DLCs to Lightning.
The recent mempool situation reminded us all about the scarcity of blocksize. The mempool is full, transaction fees are soaring, which makes small on-chain transaction not viable anymore. This is a problem as we can't scale Bitcoin to billions of users.
At 10101 we are working on extending the Lightning network to support DLCs, allowing Bitcoiners not only to pay and receive payments, but also to trade right from their channels.
In this series of blog posts, we will delve into how 10101 brings DLCs to the Lightning Network. The series will consist of three parts:
