DLCs Evolving To Meet Institutional Needs

Discreet Log Contracts are an old concept in this space at this point, proposed by Thaddeus Dryja (co-creator of the Lightning Network protocol) in 2017. DLCs are a smart contract structure designed to address three issues with contract schemes prior to the proposal: firstly the scalability of the smart contract itself, which required larger on-chain footprints for a larger set of potential outcomes; secondly, the issue of getting data external to the blockchain “into the blockchain” for contract settlement; and lastly, the privacy of users of the smart contract.

The basic scheme is very simple, two parties create a multisig address composed of the two of them, and choose an oracle….

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