Any way for Canadians to try it @Ben Justman🍷 ?

Laser eyes till 1 mil 🍻

Whoa! where can we get access to this?

> The term “AMM” appears 19 times in that article. 🤷‍♂️

It doesn't talk about AMMs in relation to CTV creating on-chain AMM-style marketplaces

> You don’t need introspection if the addresses are preregistered. Scanning the address will list all the UTXOs. Once you know the UTXOs then you also know the amounts.

The need for introspection relates to needing to look at the previous price of the AMM, to determine what the new price should be. It doesn't matter who previously did a trade for calculating the price, just that someone did, and you can verify that someone did.

> No, you don’t need multiplication if you can determine the product in another way. You might be able to create a state machine through a chain of predefined UTXOs that represent the AMM’s balance ratio.

I'm not sure how exactly this would be done, but even if it were possible to validate or invalidate certain pathways, you would still need a ridiculous amount of compute for this. CTV commit to all inputs and outputs, so you need to compute for all the possible prices for all the possible participants ahead of time.

You run into the infinite compute problem again

The key thing with CTV, is all possible states must be known ahead of time. So AMM with price x and pool of a,b,c,d....z users

All that must be precomputed. It's virtually impossible to precompute all the possible states of an AMM ahead of time.

This is specifically because you're committing to ALL inputs and outputs. If it was only committing to a subset of inputs and outputs, then you wouldn't need to precompute all the possible states ahead of time.

> CTV would enforce that only valid state transitions can occur by committing to specific transaction templates. If input A and input B, then move to point on the curve #1. But if input A and input C, then move to point #2. You’re determining the product based on the inputs provided. It has the same effect as multiplication, just doesn’t require computation or introspection.

This is an oversimplification of all the possible states. Also there isn't a good way to add funds to the AMM. You'd need to calculate all the possible states ahead of time when folks first add funds. And you'd also have to precompute anyone on the registrar that could add funds, for any amount. You'd also need to precompute anyone being able to withdraw funds from the AMM for any amount ahead of time too.

Like the number of states you need to precompute, makes the entire thing impossible.

> Looks like nobody responded with any information showing the non-technical risks were considered. I still haven’t seen anything either. It’s on the proponents to show safety. It would be negligent to not fully consider all risks.

Yea ended up getting limited visibility on that post. The main resources I've seen have been on mailing lists. But many of them were also for old versions of CTV.

The BIP119 PR is probably the best resource for risks discussed:
https://github.com/bitcoin/bitcoin/pull/21702

For example:
- https://github.com/bitcoin/bitcoin/pull/21702#issuecomment-825557354
- https://github.com/bitcoin/bitcoin/pull/21702#issuecomment-1106795814
- https://github.com/bitcoin/bitcoin/pull/21702#issuecomment-1107666137
- https://github.com/bitcoin/bitcoin/pull/21702#issuecomment-1129462467
- https://github.com/bitcoin/bitcoin/pull/21702#issuecomment-1335764227

Most of these concerns seem to be related to getting consensus on the change or confusion about the change, and I think one concern is related to complexity (raised by John).

> It appears that it might be possible for CTV to create on-chain AMM-style marketplaces. On chain marketplaces create arbitrage opportunities which motivate people to pay for faster transactions:

That article doesn't mention AMMs at all. It mentioned inscription marketplaces, like Magic Eden, which is running today, where you need to construct a PSBT to create an "ask" for a Rune (you can't even do bids). They were talking about that creating some MEV.

> Please show me where the non-technical risks were discussed. I haven’t been able to find anything other than Peter identifying the risk of cheaper OOB payments.

Great question. Let's see what folks say:

https://x.com/matthewjablack/status/1838340344607355010

utxos.org is obviously a great resource. And mailing list for previous iterations of CTV

OpTech had some things to say: https://utxos.org/analysis/optech/

> We were previously discussing AMM style marketplaces.

AMM style marketplaces can't be built with CTV.

> I suggested that perhaps specific UTXOs could represent points on the hyperbolic constant product curve (x * y = k) that’s used in AMM marketplaces.

You can't do transaction introspection with CTV, so this isn't possible

> You haven’t yet shown me why it’s impossible to create AMM style marketplaces using CTV.

You haven't shown me how you can!

First of all, you need to do multiplication to do x * y = k. You don't have OP_MUL in Bitcoin script since it was disabled back in 2010 by Satoshi. You can emulate OP_MUL using CAT in order 1400 bytes. But you cannot emulate it with just CTV.

Bitmatrix ran into this problem when they were building an AMM on Liquid. They were able to get MUL working using OP_SUBSTR and OP_CAT:

https://medium.com/bit-matrix/technical-how-does-bitmatrix-v1-multiply-two-integers-in-the-absence-of-op-mul-a58b7a3794a3

However CTV doesn't enable MUL in any capacity. You cannot create an AMM if you cannot calculate the price after a swap occurs.

> That’s true, but I think you’re conflating two services. Well, technically, there are three services (fast, regular, and slow). “Fast” would be an acceleration service for those who want faster transactions and willing to pay for speed. Regular would be the normal CPFP transaction. “Slow” would be a cheaper, slower service for those who don’t want to pay higher CPFP fees and are willing to wait.

Very fair point. However if folks are okay with “slow”, what’s the likelihood they’re also okay with just waiting for lower feerates for their tx to be confirmed in the first place?

> What if there was a registration step where traders sent the coordinator or AMM a small amount to register their address, and the contracts published the next day by the AMM would include these registered addresses?

AMMs are not possible with CTV only, because there is not sufficient transaction introspection to achieve this (aka you can’t look back at previous txs which is necessary to have the price update in an AMM).

Registration step with a coordinator is technically plausible, but in practice it’s computationally infeasible.

With CTV you need to pre-calculate all the possibility trees ahead of time.

For example, imagine you had 1 million addresses registered. You’re about to create an options contract that you want to be able to sell to any of the 1 million. So you need to precompute 1 million possibilities. Now imagine you want to allow that million to be able to also sell to any of the million registered as well. Well now you need to compute 1 million times 1 million combinations within your taproot tree script. Oh and if you want that 3rd sale to be able to sell to anyone, you need to do it again, creating infinite possibilities to compute.

On top of that, you’d need to also compute all the possible prices of the contract as well. For example dependent on the market price, it could sell for 0.01, 0.011, 0.012, 0.013 etc, etc. You’d typically have 100 possibilities for 0 to 0.1. To handle up to 1 BTC option price you’d need to compute an additional 1000 possibilities. So multiply all the previous million by another 1000 dependent on your price granularity.

So yea, you might be able to construct a transaction that is one time MEVable, but it can’t be continuously sold without infinite compute power. Additionally I highly doubt an on-chain market would ever form due to these restrictions

(Not to mention we haven’t even gotten into free option problem, since block confirmations take so long, that the potential for someone to RBF while they’re waiting for the block to confirm and they see the price move in the opposite direction makes these contracts infeasible in the first place)

wen btc pay e-cash integration?

That's awesome!

Honestly, the more I think about it, the more I realize it's way too early to be concerned about scaling issues. The Outbox model works well, and there's room to scale the current implementation.

If Nostr grows so much that we have scaling problems, that's a good problem to have 📈