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The Bitcoin sidechain Liquid Network will execute the DynaFed hardfork on Oct. 4.
Liquid Schedules DynaFed Hardfork
A hardfork for the Bitcoin sidechain Liquid Network is scheduled to go live on Oct. 4.
Liquid Network is one of the two leading Layer 2 protocols on Bitcoin, alongside Lightning Network. Developed by Blockstream, both projects enhance Bitcoin’s scalability and allow the network to support faster payments.
Lightning Network is Blockstream’s most popular product. It was created to settle small-scale merchant payments, whereas Liquid Network is designed for traders and exchanges looking to move larger amounts of Bitcoin.
Blockstream’s most popular product called Lightning was created to settle smaller merchant payments. On the other hand, Liquid was designed for traders and exchanges to transact big amounts of Bitcoin quickly and privately.
The hardfork, dubbed Dynamic Federations (DynaFed), is aiming to improve the security and flexibility of Liquid Network.
In a Wednesday tweet, Blockstream said that the DynaFed was the sidechain’s “the biggest update to date.”
Some of the most important aspects of the upgrade include increasing the number of functionaries, which are currently limited to 15, and adding and removing functionaries without affecting network operations. Functionaries are the network’s equivalent of validators. They play a critical role in securing transactions and assets on Liquid by running specialized hardware security modules.
The hardfork is also aiming to improve the security of the functionaries. The update brings improvements to the current multi-signature model and restricts functionaries’ access to emergency keys by extending the time lock parameter. It’s hoped that the changes will eliminate the possibility of a nefarious entity stealing funds from the network.
According to Blockstream, users running Liquid Network nodes will need to upgrade to node client version Elements v0.18.1.11 to avoid service interruption.
While Liquid Network is a sidechain to Bitcoin, the base chain itself is also due to launch its own update later this year. Taproot is due to launch in November, opening the door for DeFi to emerge on the network.