[2020-09-08]Bitfinex Invests in Derivatives Exchange Built With Bitcoin’s LN

[Karartma1]

Lightning Network-based derivatives platform LN Markets closed a pre-seed funding round joined by Bitfinex and other early-stage Bitcoin startup investors. Launched in March 2020, LN Markets has reached nearly $10 million in aggregate traded volume and has over 100 channels connected to its exchange.
The platform is designed to avoid slow and costly on-chain transactions by connecting traders to a bitcoin derivatives market by “streaming” their funds through the Lightning Network, according to the project’s founders.
https://www.coindesk.com/ln-markets-bitfinex-lightning-network-bitcoin-derivatives

[figmentofmyass]

this is the first i've heard of LN markets. pretty cool implementation of a CFD market, but a tad too early in development for my taste:

LN Markets is an alpha software under active development. Please use with care, preferably on Testnet or with small amounts. LN Markets comes with no guarantees, use at your own risk.

i suppose with max margin of 0.01 BTC, one can only lose so much.

i was able to find the trading page, but does anybody know how to see the order books? and what index is being referenced for price? their site is a bit lacking in information. https://lnmarkets.com/product

[Karartma1]

Yep, it looks like a super early stage product. I mean look at the site, reminds me of an early 2000 version 
Of course it's a start, any LN implementation will be a big thing and this one might be huge one day.
At the moment, with 0.01 they can't go that far. 

[figmentofmyass]

This could be viable alternative for daily trader who wants control over cryptocurrency they trade. I just wonder what's maximum balance can be "deposited" when creating LN channel?

the maximum margin per account/channel is 1,000,000 satoshis, but i think you could open multiple channels to increase that. that's probably not a good idea though because i doubt the order books are very deep when you go to liquidate your positions.

[bbc.reporter]

Is the exchange built on the Lightning network or is it only a derivatives exchange that accepts transactions using the Lightning network? The article was not clear on this.

[Karartma1]

The only available info I was able to find to understand a bit what's this all about are here
https://lnmarkets.com/product
This is still in alpha testing phase, I wouldn't trust putting 0.01 in there at the moment. I will let other players have fun before it's finally released.

[jseverson]

Is the exchange built on the Lightning network or is it only a derivatives exchange that accepts transactions using the Lightning network? The article was not clear on this.

It's built directly on the Lightning Network:

    LN Markets is a Lightning Network application for derivatives trading
    No email or registration, connect your funds instantly with your Lightning Wallet (Phoenix, Blue Wallet, Joule, etc.)
    Leverage your satoshis in a trust-minimized environment
    This is just the beginning: the Lightning Network will be used as a settlement rail by all leading financial institutions

The above announcement (from March though lol) also has way more details about how it works, so everyone who's curious should give it a read.

[bbc.reporter]

@jseverson. Thank you!

I am not very optimistic on the Lightning network, however, if developers create a Lightning service built for bitcoin's biggest usecase which speculative trading, it might be a success.

Faster and cheaper Defi yield farming on Lightning should be next on development hehehe.

[Karartma1]

@jseverson. Thank you!

I am not very optimistic on the Lightning network, however, if developers create a Lightning service built for bitcoin's biggest usecase which speculative trading, it might be a success.

Faster and cheaper Defi yield farming on Lightning should be next on development hehehe.

No please, come on. The last thing I want from Bitcoin is defi yield farming. I can have some interest on those btc I will be lending out but I don't wish all that crap coming from Eth to be poured into bitcoin.
You might want to look at this
https://sovryn.app/

[bbc.reporter]

@Karartma1. I was clearly only joking about the defi hehe. However, I am quite certain it will be a success. This community is all about the get rich quick in ponzi yield farming and the ICO pump and dump. What would the perfect platform be to dump scams and hold bitcoin hehe.

[Karartma1]

Sorry man, I was in a bad mood recently and not able to read jokes/irony/sarcasm coming from a keyboard 
Anyway, I repeat, keep an eye on the project I mentioned earlier on. It might be an interesting one.

[Harlot]

I think this will attract a lot of attention from hackers especially that we all know that Lightning Network now is vulnerable to the Flood and Loot attack. Two months ago some researchers have spotted a vulnerability of the Lightning Network where they will be taking advantage of the transactions being off-chain. If this system becomes more popular and they will have a lot of transactions going on within Lightning Network it is possible that the users will be doing the work for them. There are proposals for a fix but I didn't see any updates regarding an implementation for this one.