Company Name Boltz
Founders: Kilian Michael
Date of Founded Project started in 2019 and incorporated in 2023| Incorporated in 2023
Headquarter Location: Incorporated El Salvador| Incorporated in El Salvador
Bitcoins held by the Treasury BTC accounts for 100% of Treasury
The number of employees: 5
Website: https://boltz.exchange/
Is it Public or Private? Private Investigators
Swapping sats Boltz helps you to easily navigate between Bitcoin layers.
Boltz This is a non custodial exchange which allows users to transfer their bitcoins from the Bitcoin Base Chain, between each other. Lightning Network Then, there is the Liquid Network.
Boltz was created out of necessity to help the Lightning Network in the early stages.
Boltz: A History
“Boltz as an idea started in 2018,” Kilian tells Bitcoin Magazine.
“I was working on a Lightning-based decentralized exchange and realized pretty quickly that it was very tough to keep Lightning channels balanced,” He added.
“Boltz was really born as a band-aid to fix this, a service provider that would take care of your Lightning channel balances and keep them balanced for you.”
Kilian’s team and he were adamant that Boltz would be decentralized, so it was important to them to create a non-custodial system.
Boltz launched its mainnet in April 2019, but only allowed Bitcoin base-chain to Lightning Swaps until the beginning of 2023. This is when Kilian, and Michael Boltz, Boltz’s co-founder realized Boltz required more attention.
“We saw it organically growing and we felt that it deserved more,” Kilian, said
“We decided in early 2023 to go in full time and that the next major feature would be Liquid Swaps, which we then launched in May 2023,” He added.
Kilian or Michael began to turn Boltz, which had previously been a passion-project, into a business. As a result, they had to deal with some growing-pains as they tried to attract a whole new audience.
Liquid Swaps
“In 2023, when we started Liquid Swaps, we targeted more professional users, specifically for the channel rebalance use case in a fee sensitive [environment],” Kilian explains. “We launched it during the fee spike in May 2023.”
Kilian was referring to the fee hike that resulted from the introduction Ordinals Bitcoin is a base-chain. Bitcoin transaction fees reached an all-time-high by April 2023.
When fees reached 500-600 sats/vByte and transaction fees were over $100 for some transactions, the situation began to deteriorate. Even Boltz was feeling the pressure.
“We had to shut down Boltz for three or four days,” Kilian was recalled.
“Boltz was not available because we had all our working capital locked up in the mempool and we were not able to pump it out because fees kept on rising. A lot of similar services had this problem,” He added.
Kilian then pointed to Liquid, which was a viable solution for many of the companies that were in this position.
“If you imagine the typical use case of getting inbound liquidity on Lightning, you can do so multiple times with Liquid,” Kilian explains.
“You send out via Lightning, thus getting inbound liquidity, and get Liquid LBTC back. This really made a lot of sense to users when we launched it. The launch was successful, [and we] breathed a little bit of life into the Liquid ecosystem,” He added.
Kilian shared with Boltz that the swap service is what underpins Boltz. Aqua WalletA wallet which allows Liquid-to-Lightning swaps became very popular by mid-2023.
Boltz — Behind the Scenes
Boltz’s use in the background of Aqua is not unique among Bitcoin products.
Breez WalletBoltz’s Swap service, which is a Lightning non-custodial wallet, enabled the wallet to be used as the first bitcoin wallet.
“Sometimes Breez users want to send to an on-chain regular Bitcoin address because the merchant only accepts on-chain,” Kilian, said “So, Breez integrated our open, publicly-available API in order to offer these swaps directly within the app.”
Breez Wallet allows users to purchase on-chain using Lightning. They simply scan a Bitcoin QR code, and Boltz will perform the Bitcoin swap.
Kilian stated that Boltz intends to provide its services behind-the-scenes with additional companies.
“It’s crucial for great UX that users do not have to open our website but can stay in whatever product/wallet they [are using] and move their bitcoin between layers right where they are,” Kilian said. “Our non-custodial API is something we pioneered and we are very proud of.”
How Boltz Works — Atomic Swaps
According to Kilian, creating a non-custodial service — especially one that integrates well with other non-custodial services — was not an easy task.
Kilian Boltz’s team and Kilian were very clear that they wanted to avoid being regulated by the government as an organization which is responsible for the funds of users. They also didn’t wish to rely on intermediaries in order to complete the transaction.
“You do not want to trust a random website, a random project that you find on the internet,” Kilian explains.
“We also want to be available to users that say, ‘Okay, I don’t know them necessarily, but I hear these guys saying it’s non-custodial. Probably some technical person checked that it’s actually non-custodial, so I’m going to give it a shot,'” He added.
Boltz’s key feature that allows it to operate as a non-custodial service is its Atomic Swap. Boltz is a variant of Atomic Swap that uses the Submarine Swap.
Submarine Swaps employ hash time-locked contracts (HTLC)This technology, in plain English, allows for two simultaneous transactions (both ends of the swap), by linking them cryptographically together inside a “smart contract”. With this technology, it is impossible for two transactions to take place at the same time.
The most reliable solution for moving bitcoin layers between sats is this.
Boltz’s technology was taken to the next step in January this year when it enabled Taproot SwapsThe Lightning refund system has been made more efficient.
“Until January, when a swap to a Lightning invoice or to a Lightning destination failed, you had to wait until you could get your refund back,” Kilian, said
“That’s a drawback and just bad UX in the end. With Taproot, there’s a new way you can spend coins. It’s called ‘key path.’ And with this key path spent, basically what we could do is we could issue refunds immediately,” He added.
Kilian also added that Taproot Swaps enhance privacy as they do not reveal anything about swapping on the chain.
“If a chain observer is looking at the chain, one cannot tell that this is part of an Atomic Swap or even a Boltz swap,” Kilian explains. “There’s no way to do that.”
You can also find out more about the A-Team here. “Privacy-Respecting” The solution is to use
Kilian claimed that the “P” word — privacy — I inquired as to whether or not he was worried that Boltz might end up in the crosshairs of the authorities, especially in the wake of the US Department of Justice (DoJ) pressing charges Samourai Wallet Developers.
“I’d be lying if I’d be saying we’re not worried at all because everyone is worried and everyone was very worried, especially in the first couple of days after the Samourai incident happened,” Responded Kilian
Boltz, however, isn’t an actual privacy solution. “privacy-respecting” solution.
We are not to be compared in any way with other companies. coinjoin Kilian added, “or with the solution you’re using to get privacy.”
“When you do a swap on Boltz, there’s minimum one party that has the information of incoming and outgoing payments — and that is us. You shouldn’t trust us to not reveal this information one day,” He added.
“That being said, we are respecting privacy in the sense that we are not requiring more information than is strictly necessary — the destination address or the destination invoice — in order to do this work. We do not need your email address. We also do not need your IP address. And you can access our service via Tor.”
Boltz in the Future
Boltz will have a key role to play in Kilian’s future plans.
“Our vision really is to be the bridge between the Bitcoin layers,” “He said”
“We’re seeing Bitcoin layer 2 sidechains, different sorts of layers are gaining traction, and this box won’t just close. This is unstoppable now, and we want to be the place that connects these layers,” He added.
Kilian also stressed that Lightning would continue to remain Boltz’s main focus, as it is his favorite game. “connecting tissue” between Bitcoin layers. Boltz has recently released a client which automates rebalancing Lightning Nodes.
Kilian Boltz and his team will not only continue to iterate on their best practices, but also keep an eye out for any new opportunities.
Kilian has repeatedly stated that Boltz will remain focused on its core values, whatever the future may hold. “the easiest place with the best UX to non-custodially move [sats] in between Bitcoin layers.”
“This article is not financial advice.”
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Source: bitcoinmagazine.com
