What if instead of trying to create complicated “layer 2” setups involving noveau cryptographic techniques we just did the following:
- we take that Fedimint source code and remove the “mint” stuff, and just use their federation stuff secure coins with multisig;
- then we make a spacechain;
- and we make the federations issue multisig-btc tokens on it;
- and then we put some uniswap-like thing in there to allow these tokens to be exchanged freely.
The recent spike in fees caused by Ordinals and BRC-20 shitcoinery has shown that Lightning isn’t a silver bullet. Channels are too fragile, it costs a lot to open a channel under a high fee environment, to run a routing node and so on.
People who want to keep using Lightning are instead flocking to the big Lightning custodial providers: WalletofSatoshi, ZEBEDEE, OpenNode and so on. We could leverage that trust people have in these companies (and individuals) operating shadow Lightning providers and turn each of these into a btc-token issuer. Each issue their own token, transactions flow freely. Each person can hold only assets from the issuers they trust more.