Peg-in/out

1. SideSwap requests that the user produces a Liquid address to which they wish to receive their peg-in balance.
2. SideSwap proceeds to generate a Liquid Federation multisig mainchain peg-in address and a claim script. The mainchain peg-in address is presented to the user as the peg-in address to which they’re requested to send BTC.
3. On peg-in detection, we determine if the amount can be sent from our hot-wallet after 2 confirmations, or if the user must wait the full 102 confirmations before we can forward the funds.
4. Once the peg-in has 102 confirmations, the L-BTC are released using the claim script. If the payment has previously been release to the user, we replenish our hot wallet, and if not, we forward the balance.

Each peg-in/out URL is unique and can be re-entered to view your progress.

1. SideSwap requests that the user produces a Bitcoin address to which they wish to receive their peg-out balance and selects the network fee level.
2. SideSwap proceeds to generate a Liquid address and presents this to the user as the peg-out address to which they should send L-BTC.
3. On detection of the peg-out being made to the peg-out address, we wait two confirmations and then “burn” the L-BTC with our Peg-Out Activation key.
4. The Liquid Federation is notified that SideSwap has requested a peg-out and proceeds to auto-select which BTC residing on peg-in multisig addresses should be released on Bitcoin’s mainchain. It forwards this transaction to the Federation watchmen for signing.
5. SideSwap receives the peg-out balance to its pre-approved peg-out address, from where it will forward the balance to the user once the transaction has one confirmation.
6. The whole process takes anywhere between 15 and 60 minutes.

Each peg-in/out URL is unique and can be re-entered to view your progress.
A peg-in/out address may be re-used.

While reuse of a peg-in address is possible, SideSwap strongly discourages such practices for the following reasons:

1. Peg-in addresses are not long-term durable if network watchmen are changed.
2. Re-use of peg-in addresses may lead to privacy leaks.
3. If peg-in addresses are reused, follow our twitter and Telegram channels closely for watchmen notification updates. Such updates can be expected up to once a year.

All peg-ins take 102 confirmations. As a convenience service, we try to forward the pegged-in balance after 2 confirmations from our hot-wallet (the hot-wallet will be replenished after the full 102 confirmations). Therefore, our ability to offer pre-payment will depend on the number of concurrent peg-ins we’ve pre-paid without being replenished.

As a rule of thumb, peg-ins below 0.1 BTC will commonly be pre-paid, but we cannot guarantee it.

SideSwap utilizes the actual mechanisms for creating and destroying L-BTC through actual peg-in and peg-out processes, therefore, we can support peg-in/out transactions of any size.

Bitcoins are perfectly fungible. Any BTC sent to a Liquid Federation multisig peg-in address will result in an equal amount of L-BTC being created on the Liquid Network. Any L-BTC being pegged out from the Liquid Network will result in the Liquid Federation releasing an equal balance from its multsig address(es).

The UTXOs released in conjunction with a peg-out are done so non-deterministically and a user should not expect to receive the specific coins previously pegged to the Liquid sidechain.