OpenSats Grant Renewal Application

Over the past six months, I’ve dedicated substantial effort to advancing dlcdevkit, transforming it into a powerful toolkit that simplifies Discreet Log Contract (DLC) development on Bitcoin. This work has proven the concept’s viability and demonstrated a strong return on OpenSats’ investment. Through consistent progress and community engagement, I’ve established dlcdevkit as a valuable resource, paving the way for developers and businesses to explore DLC-based innovation with confidence.

The project so far highlights the effective allocation of OpenSats funding, with tangible outcomes that extend beyond initial expectations. By streamlining DLC implementation, dlcdevkit has opened doors to real-world applications, supported by promising collaborations and growing interest from the ecosystem. Looking ahead, I’m eager to build on this success, and with renewed support from OpenSats, I can drive dlcdevkit toward even broader adoption and impact within Bitcoin’s DLC landscape.

Future Plans for dlcdevkit

dlcdevkit Integration with Companies

I plan to deepen dlcdevkit’s integration with industry partners, focusing on innovative applications in energy payments and decentralized mining pools. A company providing real-time payments for energy utilities is leveraging collateralized contracts through DLCs, ensuring that if an issue arises, collateral is automatically released to the utility company without manual intervention. This setup utilizes DLCs to guarantee that funds remain secure and untouched unless predefined conditions are met, offering the trustless automation that utility companies demand. Additionally, I’ll collaborate with mining pools to establish financial markets within decentralized pool ecosystems, allowing speculators to gain exposure to pool performance while providing miners with more stable revenue streams through hashrate derivatives. By embedding dlcdevkit into these pools’ infrastructure, I’ll develop payout structures that effectively balance risk and reward for both miners and investors. These partnerships will showcase dlcdevkit’s versatility and drive real-world DLC adoption across critical sectors.

DLC Scalability

I have taken a keen interest in finding a Layer 2 that can help the scalability of DLCs to improve capital efficiency. rust-dlc is shipped with an on-chain backend and a "lightning" backend with DLC channels. I would like to expand the backends for dlcdevkit to explore the L2 space.

Fedi

I aim to integrate dlcdevkit with Fedi’s backend as part of another OpenSats grant proposal. This collaboration will explore how dlcdevkit can power a scalable DLC infrastructure within Fedi’s ecosystem, enabling efficient contract execution across a broader network. By aligning with Fedi’s goals, I’ll enhance dlcdevkit’s reach and utility, addressing scalability challenges in the DLC space.

Ark

I have gotten access to the early beta of Ark Labs rust crate. I believe Ark is an excellent candidate for DLC scalability for capital efficiency. Ark is a UTXO based L2 with different spending conditions in the taproot tree. A part of my renewed grant can include a backend for Ark. My work would be focused on Ark while the Fedi will just be implemented from the fedi-dlc-client from above. Reference document that would have a similar structure for DLCs

Efficient DLCs with Taproot and Beyond

I am working on a taproot implementation of DLCs in rust-dlc. I have started work in the repository taproot-dlc. Taproot & Musig2 greatly increases the privacy of DLCs. There has been exciting conversations about an actual upgrade path for CTV + CSFS. Ben Carman and I have worked on an implementation of CTV (& CAT) DLCs with dlcat. The efficiency gains of covenant enabled DLCs allows much less interactive contract set up through messaging that can decrease the number of back-and-forth messages by a factor of 4.

Collaborative Custody Module for dlcdevkit

To address the evolving needs of institutional users, I plan to expand dlcdevkit by developing a new module focused on collaborative custody for Discreet Log Contracts (DLCs). This initiative is driven by significant interest from institutions, who require enhanced security and compliance with legal standards when adopting DLCs. Collaborative custody, in this context, involves a multisig setup where multiple parties hold keys, and a threshold of approvals is needed to move funds or execute contracts. This approach ensures greater assurance that funds remain secure and aligns with regulatory mandates often requiring multisig arrangements.

Conclusion

Renewing my OpenSats grant will empower me to build on six months of impactful work, pushing dlcdevkit toward broader adoption and greater efficiency. My proven dedication—through code improvements, community engagement, and ecosystem contributions—demonstrates my capability to deliver. With this support, I’ll integrate dlcdevkit with industry leaders, enhance scalability via Fedi and Ark, and pioneer efficient DLC designs with Taproot and covenants.

I know there was concern on the adoption of DLCs but the investment and usage of DLCs has increased since my grant was awarded. DLC Markets has gone mainnet with a focus on institutional derivatives. Lava has also raised a $30 million series A building lending with DLCs. The market has increased demand for DLCs and an open source project like dlcdevkit is a champion in the ethos of OpenSats.

Thank you, OpenSats, for considering my application—I’m eager to keep advancing Bitcoin’s DLC frontier!