Liquid restores 1:1 Bitcoin backing, but wallet refills remain manual
SideSwap reports full L-BTC backing, while customer payouts still depend on its own Bitcoin wallet and manual refills. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
The Liquid Network's Bitcoin reserve again fully backs L-BTC, its Bitcoin-linked token, swap provider SideSwap said Nov. 3.
Direct withdrawals from the Liquid Federation remain restricted, leaving SideSwap's customers dependent on the provider's own Bitcoin wallet for payouts.
In its Nov. 3 update, the swap provider cited 4,270.54 L-BTC in circulation against 4,270.54 BTC in the reserve managed by the Liquid Federation that morning. Those equal balances restore one Bitcoin of reserve backing for each L-BTC, according to SideSwap.
The company identified deposits of 300 BTC and 250 BTC on Nov. 2 among the transfers that brought the reserve level with circulation.
The restoration follows the Sept. 6 incident in which an Elements software flaw allowed about 4,000 unbacked L-BTC to be created and converted into Bitcoin through SideSwap's service, according to the provider.
Related ReadingSideSwap says its L-BTC-to-BTC service has been open since Oct. 20, and holders can send L-BTC and receive Bitcoin at a one-to-one rate, minus the provider's standard 0.1% fee. That customer conversion route remains separate from direct Federation peg-outs, the mechanism for releasing Bitcoin from the network's reserve.
Until Federation peg-outs return, SideSwap says every customer payout comes from its own Bitcoin wallet, and that it exchanges the L-BTC it receives for Bitcoin in bulk.