SideSwap Reopens Liquid Bitcoin Conversions Amid Network Recovery
SideSwap, a prominent swap provider on the Liquid Network, has officially resumed conversions from synthetic Liquid Bitcoin (L-BTC) back into native Bitcoin. This move provides a vital exit strategy for users while direct withdrawals from the Liquid Federation remain restricted following a significant technical flaw identified late last month.
A Managed Exit for L-BTC Holders
Under the newly reopened service, SideSwap allows holders to convert their L-BTC at a 1:1 ratio, minus a standard 0.1% service fee. Since the service resumed on October 20, the provider has already processed approximately 600 peg-outs, totaling more than 60 BTC. This mechanism operates independently of the Liquid Federation’s direct withdrawal route, which is currently undergoing a multi-phase restoration process to ensure the security and integrity of the network’s reserves.
Navigating Liquidity and Manual Refills
Because direct federation withdrawals are still paused, SideSwap is currently fulfilling payouts using its own internal Bitcoin reserves. Once the L-BTC is received from users, the provider swaps it for Bitcoin in bulk to replenish its inventory. Consequently, users may experience delays or "queues" if SideSwap’s wallet requires a refill. These refills remain a partly manual process, meaning that while funds are not at risk, the timing of a payout depends entirely on the current liquidity available in SideSwap’s operational wallet.
The Path to Restoring Reserve Backing
The current restrictions stem from a September assessment by Blockstream, which revealed an Elements verification-cache flaw that resulted in the creation of roughly 4,000 unbacked L-BTC. The Liquid Federation is currently in a recovery phase focused on reestablishing full 1:1 backing for all assets on the network. While SideSwap offers a functional workaround for individual users, the Federation has not yet set a definitive date for the final reactivation of authorized direct peg-outs, as security and operational requirements are still being finalized.
