Liquidity Network is an off-chain payment network built on Ethereum in order to enable an instant transaction system. It is the equivalent of Lightning Network for Ethereum, with a slightly different operation but with the same objective: to provide better scalability.
La Liquidity Network is a off-chain payment network based on the blockchain of Ethereum which allows payments to be made and funds to be transferred much more quickly, efficiently and economically.
The creators of Liquidity Network define it as a network where users can make their transactions instantly and with very low commission rates. Maintaining full and absolute control and possession of the funds at all times. The development of this network is a work started by Dr. Arthur Gervais and Rami Khalil. It was they who presented the idea in 2017, seeking to improve the performance of Lightning Network. In fact, Liquidity is an adaptation designed to work on the Ethereum blockchain.
The implementation of this payment network seeks to guarantee a higher level of security, transparency and scalability on the Ethereum network. In addition, it allows providing an excellent experience and service to users who wish to use blockchain technology as a means of making their payments.
A response to Ethereum's lack of scalability
As is well known, the scalability problem in blockchains has been one of the biggest limitations that have made it difficult to adopt this technology in a massive way since its launch. So blockchain-based payment networks seek to tackle this problem by presenting a feasible and feasible solution to overcome this obstacle.
While in the Bitcoin network the implementation of Lighting Network (LN) is the one that proposes to solve some problems associated with scalability and transaction costs through off-chain payments, in Ethereum the solution that, at the moment, has the greatest traction for off-chain payments is the network Liquidity Network.
The technology implemented by the Liquidity Network makes it possible for the most striking features of blockchain technology to remain intact and present within this payment network. But at the same time, it manages to improve those characteristics less favorable for the cryptographic community and the environment itself. So with Liquidity Network users can make their financial transactions off-chain in seconds, immediately and completely secure. In addition, the network also allows such transfers to be executed with very low costs, without users losing ownership of their digital assets at any time and without the need for trusted third parties.
How does Liquidity Network work?
Liquidity Network structure combines the best of centralized systems with decentralized systems, operating as a second layer solution that is based on protocols NOCUSTHub y Revive.
First, NOCUSTHub It is a scalable chain of commitment that allows making payments from person to person, directly and without trusted intermediaries. Thus, it allows users to maintain the ownership of their private keys, and therefore, of their assets at all times. In addition, this protocol also allows the realization of off-chain payments since it works safely and reliably with centralized servers for the processing of financial transactions and operations. Guaranteeing security, scalability and economy to the Liquidity Network.
For this process, the NOCUST Hub protocol uses universal nodes that allow users to connect with others who are anywhere in the world. Allowing the realization of payments and transactions instantly and securely off-chain, and of course with a lower cost than if the operation occurred on-chain.
El Revive protocol, For its part, it is a complement to NOCUST Hub, which allows a fast, secure and reliable record of all transactions and operations carried out outside the chain within the blockchain network.
Liquidity Network Architecture
Liquidity Network's design focuses on the notion of universal hubs. As such, a user who is joining a hub or center can transact their funds with any other hub member. This is an instantaneous and off-chain operation. Therefore, at significantly lower costs than regular on-chain transactions.
The architecture of the center is novel because there are no funds locked between just two users for a stipulated time. Instead, the funds are accessible to thousands of other users in the same center. But at the same time, the funds are secured by the blockchain, so other users cannot steal the allocated funds from other users. This is very different from Lightning, because such technology would need to open an excessive amount of payment channels to be able to function this way.
The Liquidity ecosystem is currently implemented for Ethereum and allows millions of users and payment processors to exchange crypto. Because the Liquidity Network is built on the Ethereum blockchain, it benefits from the existing research and development community. With its novel design, the Liquidity Network architecture solves several critical points of existing payment channel designs. At the same time, Liquidity presents features and functionalities that make it technically superior to Lightning, but more complex to implement.
Advantages offered by the Liquidity Network
Scalability and economy
Liquidity Network addresses the most common problems presented by traditional blockchains, such as Ethereum, and traditional payment systems like Visa y Paypal.
Firstly, traditional blockchains have shown enormous potential in terms of security, transparency and autonomy. But when it comes to scalability, the number of transactions processed per second is very few compared to traditional payment systems, which can process thousands of transactions per second without problems. Second, the commissions charged by these traditional payment systems for such transactions can exceed up to 10% of the amount transferred, something that makes them very expensive and inconvenient.
Instant and secure operations
With the Liquidity Network it is possible to operate payment centers from which users can join to carry out their operations and transactions with total confidence and security outside the chain. From the payment centers operated by the Liquidity Network, users will be able to manage their funds autonomously and completely. With the guarantee offered by the network, without the risk that the payment center may block or cancel your funds or assets.
Furthermore, as this network combines the potential of centralization and decentralization, it is possible to make payments instantaneously using the speed of centralized exchanges, together with the security and trust of decentralized exchanges.
No blocking of funds
One of the most striking properties of Liquidity Network is that the transferred funds are not blocked by the network, but rather are added to the blockchain and there remain accessible to all users. However, no user has the ability to appropriate funds or assets that do not belong to him.
Transparency at all times
One of the principles that the Liquidity Network maintains is transparency in its operations, as it is presented in the Ethereum blockchain. To achieve this, the Revive protocol is used, which summarizes all the operations carried out in the centralized and private systems, and registers it within the blockchain. Where it can be visible and auditable by any user and at any time.
How much do you know, cryptonuta?
Can Liquidity Network effectively solve Ethereum's scalability problem?TRUE!
Yes, Liquidity Network was designed so that it can effectively solve Ethereum's serious scalability problem and its growing token ecosystem, so it is a really practical solution, and in fact projects like Tether (USDT) have started to use for that purpose.
Network implementations
Off-chain wallet
The Liquidity Network has its own wallet or purse. This is compatible with various operating systems and mobile devices such as Android and iOS. This wallet was launched in mid-2018 as an operational off-chain wallet on the Ethereum blockchain. With it, users can make free transfers between blockchains supported by the network.
Decentralized exchange
Another implementation of the Liquidity Network is a decentralized exchange or exchange platform. Where users will be able to carry out their financial operations without having to transfer ownership of their funds anywhere. This gives the platform a high level of security, while operating under off-chain technology.
Liquid Token (LQD)
Liquidity Network has its own ERC20 token. This can be used outside the chain to access all the functions provided by this payment network. However, the use of these tokens is not mandatory for users who wish to implement payments and carry out standard or regular transactions within this network.
There is no doubt that the implementation of the Liquidity Network payment network provides great solutions to the problems of scalability and transaction costs. At the same time, it brings multiple benefits to the Ethereum community and to the crypto community in general. This network has managed to merge the best qualities and characteristics of two worlds: centralization and decentralization. Resulting in a structure of high efficiency and practicality that allows us to provide a feasible solution to the problems presented by blockchain technology.
Without a doubt, a very interesting proposal where, if it is accepted, users seem to be able to enjoy highly fast, secure and very cheap transactions.
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