CTV+CSFS: Can we reach consensus on a first step towards covenants?

In the realm of cryptocurrency and blockchain technology, the integration of CheckTemplateVerify (CTV) within the Liquid network has sparked a detailed discussion among experts. A key point raised revolves around the necessity for users to know the exact amount they will transfer before generating an address, coupled with the assurance that this amount will not change in subsequent communications. This precision is crucial as any deviation might result in the permanent locking of funds or unnecessary burning of excess through fees. Furthermore, there is a significant emphasis on the challenge of ensuring that addresses are not reused for different transactions in the future, a common difficulty in maintaining user compliance.

An innovative solution to these challenges involves a streamlined process where users deposit funds using a standard liquid peg-in script, which are then consolidated into a separate CTV address under the management of the watchmen. This strategic shift transfers the burden of correctly implementing CTV from individual users to the skilled liquid engineering team. While this method demands meticulous engineering to avoid pitfalls previously mentioned, the potential reduction in transaction fees presents a compelling incentive for its adoption.

Despite these advancements, the dialogue acknowledges that Liana, being non-custodial, may not replicate these benefits due to its inherent design differences. The conversation culminates in the consensus that while CTV offers a viable method to circumvent recurring fees, the application of general-purpose vaults could provide a more robust and less error-prone solution for managing such transactions. The nuanced discussion reflects a broader understanding that while technological innovations like CTV hold promise, their successful implementation requires careful consideration of user behavior, security protocols, and the overarching system architecture.