[dlc-dev] DLC Factories

conduition conduition at proton.me
Sun Jan 12 03:24:24 CET 2025


Hey DLC devs,

I have an interesting concept I concocted recently which I call DLC Factories. 

I'm curious to know if you've seen anything like it before or if you have any 

feedback. 


https://conduition.io/scriptless/dlc-factory/

This is a way to create a kind of "rolling" DLC which can be endlessly renewed, 

as long as both parties can come online to sign new CETs before a certain deadline. 

Technically, it's more like a series of DLCs which can be funded only at specific 

times and by specific parties.

It uses a punishment mechanism similar to lightning to deprecate outdated CETs, 

and so requires participants to be always online (or have a watchtower handle it 

for them).

There's also the potential for a factory to enter a deadlocked state if neither 

participant publishes their commitment TX in time. 


These drawbacks aside, it seems like a neat and relatively straightforward way 

to create things like american-style options, or flexible CFDs, which can be 

exercised or settled at arbitrary times. I wonder if there are new financial 

instruments we could implement on bitcoin using something like this, tailored 

to specific use-cases.

Feedback appreciated and thanks in advance for any constructive improvement suggestions :)

-c
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