The Liquid Network is a Bitcoin layer-2 solution enabling the fast, confidential settlement, and issuance of digital assets, such as stablecoins, security tokens, and other financial instruments. As a sidechain of Bitcoin, Liquid allows you to move bitcoin (BTC) between the Bitcoin mainchain and the Liquid sidechain through a verifiable 1-to-1 peg. Who is Liquid for? The Liquid Network is designed to improve a broken financial system that relies on centralized trust, middlemen, and custodians and to replace it with one of distributed trust, privacy, and self-custody. Users include institutional and retail investors, trading desks, exchange platforms, and digital asset issuers. What is Liquid used for? Liquid is used to: Facilitate faster Bitcoin transactions: Non-variable, one-minute block times with two-block transaction finality. Improve the confidentiality of Bitcoin transactions: Transaction amounts and asset types are not visible to third parties. Issue new assets: Anyone can issue assets on Liquid, including stablecoins, security tokens, and digital collectibles. These assets enjoy the same speed and confidentiality features as Liquid Bitcoin. Some examples of ways people are using Liquid include: More efficient arbitrage: Faster Bitcoin and stablecoin settlements enable traders to more quickly “close the loop” than their competitors. Reducing front-run risk for large trades: Transaction amounts of large OTC trades are not visible to third parties on the Liquid blockchain, preventing competitors from acting on the information before settlement Minimizing settlement risk: Multiple interoperable assets on the same chain enable simple atomic swaps of one asset for another when conducting large OTC trades. Stablecoin issuance: Tether has issued USDt on the Liquid Network. Financial instruments: The Blockstream Mining Note and the El Salvador Bitcoin Bond are security tokens issued on the Liquid Network. Gaming asset tokenization: Online battle royale game Lightnite and the MMO space strategy game Infinite Fleet have tokenized their in-game items on the Liquid Network. What is a Sidechain? Bitcoin sidechains such as Liquid are blockchains that facilitate the transfer of assets to and from the Bitcoin mainchain via a two-way peg. The amount of BTC circulating on a sidechain is always verifiably equal to the amount of BTC “locked” on the Bitcoin mainchain. While sidechains are interoperable with the Bitcoin mainchain, they operate independently of the Bitcoin network itself. Sidechains depend on Bitcoin; Bitcoin does not depend on sidechains. Note: The Liquid Network is an implementation of an Elements-based sidechain. Elements is an open-source sidechain platform from Blockstream, based on the Bitcoin codebase. Why use a Sidechain? Making changes to Bitcoin’s protocol to address the niche needs of certain users, such as traders or asset issuers, is very difficult due to Bitcoin’s high degree of decentralization. Even if achievable, changes may not be desirable due to the risk of compromising Bitcoin’s unique security and censorship resistance. Sidechains, on the other hand, operate at a lower degree of decentralization. They provide an environment where new features can be deployed more quickly without affecting the Bitcoin mainchain. Importantly, sidechains can provide these features without exposing the user to the risks connected with altcoins, such as low liquidity and price volatility, because the underlying asset is bitcoin, the world's first, most sound, and battle-tested cryptocurrency. What is Liquid Bitcoin? Liquid Bitcoin (L-BTC) is a special type of asset on the Liquid sidechain. Its supply is verifiably backed 1-to-1 with bitcoin (BTC) held on the Bitcoin mainchain. L-BTC is created when BTC is moved to the Liquid Network and destroyed when BTC is moved out of the network. The process of moving BTC to Liquid is known as a peg-in, and moving BTC out of Liquid is known as a peg-out. Aside from its uses in trading, L-BTC is also needed to pay for transaction fees when transacting any type of asset on Liquid. What are Issued Assets? Liquid was built using the Elements platform, which enables the issuance of multiple assets on the same blockchain. Assets issued independently on Liquid are called Issued Assets. While there are subtle differences between the security models for L-BTC and Issued Assets, for the most part, all assets on Liquid look and function the same: they share the same base features which include 1-minute block times, Confidential Transactions, and Bitcoin-style smart contracts. Issued Assets can be used for various purposes including stablecoins, digital collectibles, security tokens, reward points, vouchers, and more. How does Liquid work? Liquid is run by the Liquid Federation, which comprises leading exchanges, trading desks, wallet providers, payment processing services, financial institutions, and other Bitcoin-focused companies. No single member has control over the network. Unlike on Bitcoin, blocks on the Liquid sidechain aren’t mined using proof-of-work. Instead, blocks are signed by 15 Liquid functionaries in a round-robin. The Liquid functionaries are specialist hardware units operated by a subsection of the Liquid Federation, geographically dispersed around the world. While anyone can run a Liquid node and verify the state of the network, the Liquid functionaries are the “beating heart” of the network, signing transactions, generating blocks, and securing the BTC held by the network. Get Started Download a Liquid Wallet The easiest way for most users to get started with sending and receiving Liquid assets is Blockstream Green, available for all major operating systems across mobile and desktop. Acquire L-BTC You can quickly purchase small amounts of L-BTC with an Apple Pay or a debit card on the official Liquid Network site (currently available to 20+ countries). You can also easily convert BTC to L-BTC on various exchanges as well as through peer-to-peer trading platforms. See our full list of platforms and services that have integrated with Liquid. Run a Liquid Node Anyone can permissionlessly validate the information on the Liquid sidechain by installing a Liquid node. You can also use your Liquid node to initiate a peg-in or issue an asset. Get Integrated You don’t need to be a Liquid member to offer Liquid-based features to your users. Check our technical documentation for basic details on how to start integrating your platform or application. Join as a Member The Liquid Federation comprises key industry participants such as exchanges, OTC desks, wallet providers, and payment processors. If you wish to join the federation, submit your interest through the Liquid Network official site.