Blockstream Announces 14 New Liquid Network Members
Blockstream announces 14 additional companies joining Liquid Network Bitcoin sidechain, expanding federated settlement infrastructure for exchanges and trading firms.
On March 6, 2019, Blockstream announced that 14 new companies had joined its Liquid Network, the Bitcoin sidechain designed for faster settlement between cryptocurrency exchanges and trading firms. The expansion demonstrated growing adoption of Liquid's federated model for institutional Bitcoin transactions requiring speed and privacy beyond what Bitcoin's base layer provided.
The Liquid Network operated as sidechain where Bitcoin could be locked on the main chain and represented as L-BTC on Liquid, enabling near-instant settlement between participating exchanges and businesses. The federation model meant that predefined trusted entities controlled the sidechain rather than permissionless miners, trading some decentralization for performance and privacy.
For exchanges, Liquid offered several benefits: near-instant settlement enabling more efficient arbitrage and market making between platforms, confidential transactions hiding amounts being transferred to prevent front-running, reduced on-chain fees by conducting multiple trades off-chain before settling to Bitcoin, and streamlined processes for moving funds between participating exchanges.
The 14 new members joining Liquid indicated that institutional Bitcoin market participants saw value in the sidechain approach despite it requiring trust in federation operators. However, Liquid adoption remained limited to its specific use case of institutional settlement rather than achieving broader mainstream usage.
For Bitcoin's scaling ecosystem, Liquid represented recognition that different use cases required different solutions—consumer payments might eventually use Lightning Network, institutional settlement could use Liquid, and long-term storage remained on Bitcoin's base layer. Critics noted that Liquid's federation model introduced centralization and trust requirements absent from Bitcoin itself, questioning whether this qualified as Bitcoin scaling or merely efficient database for participating companies.Nevertheless, Liquid's growing membership demonstrated that institutional Bitcoin infrastructure was developing through diverse approaches beyond just base-layer improvements or Lightning Network.