Bob Loblaw's avatar
Bob Loblaw 2 months ago
TL;DR A futures market forces fork supporters to risk their BTC instead of attacking Bitcoin for free. If they won’t bet, their conviction is weak and the fork is likely to fail. Skin in the game exposes whether a fork has real support or just loud talk.
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Replies (3)

Cobweb's avatar
Cobweb 2 months ago
If a hard fork happens I fully intend to sell one chain and buy the other.
JackTheMimic's avatar
JackTheMimic 2 months ago
Except the way to "bet" as stated doesn't work if the UASF succeeds. Because there is no way to guarantee your counterparty can submit both transactions on both chains. The UASF chain relies on miners resolving an OP_IF sighash, which would be disabled by the consensus change. So, no this is a "heads I win, tails you lose" type of bet.
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Marcus Satbard's avatar
Marcus Satbard yesterday
Although that doesn't seem to make sense, I wonder if you checked the updated logic after the BIP has changed?
Rob Hamilton 's avatar Rob Hamilton
I have now fully open sourced the code which creates this on-chain BIP-444 futures contract! image The contract starts with an atomic deposit into the contract address of 1 BTC each (to make sure both parties put in the same amount into the contract address). Context: BIP-444 makes the use of OP_IF & OP_NOTIF consensus INVALID upon activation. The contract is built as follows: The taproot address uses the NUMS point as described in BIP341, to provably show the key path is not active. We have two parties, a "YES" (444 activates) and "NO" (444 does NOT activate). YES and NO for short. The first leaf is a 2 of 2 multisig of both parties. This exists to be able to self send the UTXO AFTER BIP 444 activates. This is because BIP-444 just added a clause that UTXOs created before activation will NOT have the BIP-444 consensus rules applied to them. This self send removes that exception. image The second leaf: has 2 ways you can spend with it, a 2 of 2 (YES and NO) multisig, just like the first leaf OR the NO party, with a time lock which is LESS THAN the third tap leaf. This is important because it uses OP_NOTIF image The Third Leaf: The YES party can spend, after a time lock AFTER the second leaf. image The order of the timelocks is important. If BIP-444 activates, the spending condition that can spend before you will be consensus invalid, so it doesn't matter if you believe 444 activates. So to summarize: - If BIP-444 DOES activate, the party who believes it will be able to use the second tap leaf to get 2 BTC out. - If BIP-444 DOES NOT activate, the party who believes that will use the third tap leaf to get 2 BTC out. Since each side is highly confident in their position, the fair market price is a 1:1 ratio, implying 50% likelihood. With 85 days until activation, this contract as written gives you an implied ~430% APY on your bitcoin! The risk is being incorrect on your opinion of BIP-444 activating. You could modify the collateral each side puts up to get different implied odds of the futures contract as well. Github: https://github.com/Rob1Ham/BIP-444-Futures Address: https://mempool.space/signet/address/tb1p07flh4waghmkeep0l20nf2tyn4tw9wy3w4j5vkrf6mue9ddtakgsgc5clr Anyone who wants to take the BIP-444 WILL activate side, let me know! The Author of the BIP has agreed to this, I have already asked for a larger bet size beyond the 1 BTC I initially proposed, but I have more!
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