Liquid Network Technical Overview

Understanding the security architecture of the Liquid Network sidechain compared to the main Bitcoin blockchain.

The top 3

  1. Federated Security Model Explained: Unlike Bitcoin's Proof-of-Work, Liquid uses a 'Functionaries' federation to validate transactions, creating a different trust profile. Blockstream
  2. Sidechain vs. Mainnet Vulnerabilities: Sidechains carry unique risks—such as peg-out vulnerability—that do not exist on the base-layer Bitcoin mainnet.
  3. Functionary Node Distribution: The Liquid network relies on a diverse set of global functionary nodes to maintain uptime and resist censorship, distinct from mining pools.

Sources

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