like all other "incentive-driven honesty" proposals, it only works if the value locked in the bonds is greater than thevalue locked in the covenants. but that's a reasonable restriction for many "l2" use cases, where the purpose of l2 is to enable low-valued "vtxo's" that allow an emulated self custody of small amounts that would otherwise be too expensive to move on-chain
some analysis of the relationship between the bond lock value and the maximum "incentive-safe" covenant value, and the fees the oracles are paid vs the loss of liquidy needs to be done in order to drive the incentives home both for would-be oracles and would-be users. this is unlikely, for example, to be valueable for any vault-ing use case, but should be possible to enable ark2, enigma-network and other protocols designed to falicitate small-value-transactions-at-scale On Tuesday, November 26, 2024 at 7:21:03 PM UTC-8 jeremy wrote: Esteemed Bitcoin Developers, Sharing below an approach to implementing Bitcoin covenants without requiring native protocol changes. The approach uses covenant emulators signing servers. Unlike approaches to date for covenant emulation, the oracle signers put up bonds to BitVM auditors subject to a BITVM style fraud proof, whereby their funds can be stolen if the emulator oracle ever signs a transaction in violation of the covenant rules. you can find the paper here: https://rubin.io/bitcoin/2024/11/26/unfed-covenants/ Regards, Jeremy -- You received this message because you are subscribed to the Google Groups "Bitcoin Development Mailing List" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To view this discussion visit https://groups.google.com/d/msgid/bitcoindev/65f9c15a-c2cb-4831-a3dd-00bbbfb465e8n%40googlegroups.com.
