Do you have BTC on Liquid? How much do you trust Blockstream not to rug you?
LBTC on the Liquid Network is NOT BTC. It's a IOU handed to you by Blockstream and federation members, while they keep your BTC.
With allegations of Blockstream running a mining ponzi, we need to dig deeper:
While the Liquid ecosystem is comprised of 80+ companies, the BTC backing LBTC sits in 11-of-15 multisig wallets held by only 15 Liquid Federation “functionaries”.
You need 11 of these 15 functionaries to sign off so you can withdraw your BTC.
So who are these functionaries?
We don’t know, they’ve never been disclosed.
All we know is they’re a subset of the 80+ Liquid federation member companies.
This is a problem because ~20 of those companies are intimately interconnected to Blockstream and their funding partners.
We need to investigate them.
Some are Blockstream, their subsidiaries, or share board members: Komainu, Crypto Garage, JAN3, Pixelmatic, Wiz.
Many are investors in Blockstream: Tether’s BitFinex, Fulgur & DCG.
Several are funded by the same capital as Blockstream: STOKR, OpenNode, CoinShares, Breez, etc.
At least 20 of the ~80 companies have deep overlapping ties to Blockstream through C-suite relationships, board representation, JVs, or mutual major investors.
On an 11/15 multisig, you would only need to effect control on 5 companies to be able to veto any BTC unlock from LBTC.
Blockstream, through its close network, very likely can veto BTC releases by enforcing its own key and 4 other close relationships.
Also, if the federation simply stops processing BTC peg-outs, the fallback is emergency keys held by Blockstream itself, that unlock after 28 days.
In conclusion, Liquid revolves around the Blockstream ecosystem and if you have any permissioned LBTC, your BTC could be frozen at will.
In light of Blockstream’s mining ponzi allegations, are you sure your BTC is still there?
Maybe you should withdraw while you still can.
