The future is unknown but the unknown is where all the good things come from.

A former colleague.

In this blogpost, we outline our vision and how project Baru is supposed to get us there.

DeFi is taking the world by storm. At the time of writing, there are more than 3.9M ETH worth of wrapped ERC20 tokens locked up as collateral in MakerDAO's smart contracts. A newer product such as MIMO has seen over 15M€ being invested in it over the past few days.

Because of DeFi's prominence on Ethereum, it would seem like Bitcoin is destined to miss out. Wrapping your bitcoin in an ERC20 token on Ethereum to access DeFi products is a possibility, but it doesn't appeal to everyone.

True DeFi for Bitcoin is starting to become a necessity.

"You can't stop the waves, but you can learn to surf.", Jon Kabat-Zinn

COMIT's vision is to have an open financial system - truly inclusive, censorship resistant and non-discriminatory. And we believe that Bitcoin is the most promising platform for such an open financial system due to its decentralization and its censorship resistance.

Ultimately we would love to see such an open financial system be built on top of Bitcoin, however, as of today, Bitcoin lacks privacy and only supports a single asset (BTC).

As mentioned in Project Droplet, we believe that Liquid is such a platform allowing us to build a financial ecosystem around Bitcoin. We see the possibility to build products such as lending and borrowing, prediction markets (option/futures) and even saving products. All of these share a basic building block: trading.

Over the last 2 weeks we looked into Blockstream's sidechain Liquid. We explored its confidential transaction format [2] and built a little PoC which enables two parties to swap atomically 2 assets on Liquid [1].

A droplet is a small column of liquid, bounded completely or almost completely by free surfaces.

COMIT's mission is to have an open financial system - truly inclusive, censorship resistant and non-discriminatory. Such a financial system has to allow for exchange of funds between different market participants such as investors, lenders and borrowers in a trustless manner. Liquid [1] seems to be a promising platform for such marketplaces as it has built-in support for different assets in a single transaction while keeping amounts, addresses and assets confidential. These features used in combination allow us to create trustless and private atomic swaps, trustless loans and other financial products.

#Confidential Atomic Swaps on Liquid

We are kicking-off a new project to look into Liquid's transaction format which would allow us to do true atomic swaps between two assets. This would allow us to have true trustless BTC/USD (using L-BTC and L-USDT) while all amounts, assets and addresses are confidential. This is huge as it is one step closer to a truly trustless and censorship resistant financial system.

If deemed useful, this might be the start of a longer series of R&D projects focusing on Blockstream's sidechain Liquid.