[dlc-dev] DLC Factories

[Kulpreet Singh]

Hi,

Nice write up there. Similar approaches have been suggested by Kuwahara et.al. [1, 2] and are in use by DLC Markets [3].

I am using those approaches in Radpool's payout mechanism as well [4].

Will be nice to add a section on how your approach compares to those approaches.

Best regards

-kp


[1] - https://ieeexplore.ieee.org/document/9805512 
[2] - https://github.com/p2pderivatives/offchain-dlc-paper/blob/master/offchaindlc.pdf
[3] - https://dlcmarkets.com/whitepaper.pdf
[4] - https://www.radpool.xyz/1/payout-mechanism.html#_roll_over_contract_transactions

On Sunday, January 12th, 2025 at 3:24 AM, conduition via dlc-dev <dlc-dev at mailmanlists.org> wrote:

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 It uses a punishment mechanism similar to lightning to deprecate outdated CETs,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