Liquid Network

The Liquid Network is a Bitcoin sidechain launched by Blockstream in 2018 and governed by an open federation of exchanges, trading desks, wallet providers, and other companies. It runs on the open-source Elements platform and is pegged to Bitcoin: users lock BTC on the main chain to mint Liquid Bitcoin (L-BTC), and burn L-BTC to redeem BTC. Unlike most proposals on this list, Liquid is live and in production use.

Federated peg and fast settlement

Liquid blocks are produced about once per minute by a rotating set of functionaries, specialized hardware operated by federation members, and reorganizations are disallowed, so two confirmations are treated as final. The two-way peg is secured by the federation's multisignature scheme rather than by proof-of-work, which is the central trust trade-off: users rely on the federation not to collude. No single member controls the network.

Confidential transactions and assets

Liquid supports Confidential Transactions, which hide the asset type and amount of a transfer from outside observers (and even from functionaries), though addresses and transaction IDs remain visible. Third parties can issue tokens on Liquid, including stablecoins and tokenized securities, making it a settlement and issuance layer rather than a pure payment network.

Liquid's federated peg offers a useful contrast to miner-secured and one-way-peg designs. See Drivechain (BIP300/301) and Spacechain for alternative sidechain trust models.