Company Name: Boltz
Founder: Killian and Michael
Established date: Project started in 2019 | Established in 2023
Headquarters: Remote | Established in El Salvador
Amount of Bitcoin held by the Treasury: 100% of finances in BTC
Number of employees: Five
Website: https://boltz.exchange/
Public or private? private
swapping soil Communication between Bitcoin layers can be difficult, but with Boltz it becomes easy.
Boltz allows users to use Bitcoin-based chains and Lightning Network And that Liquid Network.
While Boltz is currently used by both consumer Bitcoin users and institutions, the platform is almost as old as the Lightning Network itself, born out of necessity and was the foundation behind the Lightning Network’s functionality in its early days.
History of Boltz
“The idea for Boltz started in 2018,” Killian told Bitcoin Magazine.
“I was working on a lightning-based decentralized exchange and quickly realized that keeping lightning channels balanced was extremely difficult,” he added.
“Boltz was born as a stop-gap solution to this problem: a service provider that manages and keeps Lightning channel balances in place.”
In creating Boltz, one of the main non-negotiable conditions Killian and his team established was that it had to be non-custodial, to best align with Bitcoin’s ethos of decentralization.
The Boltz mainnet launched in April 2019 and only enabled swaps from the Bitcoin base chain to Lightning until early 2023, but around that time Killian and Boltz’s other co-founder, Michael, realized that Boltz needed more attention.
“We saw it growing organically and felt like it should grow more,” Killian said.
“We decided to go full time in early 2023 and our next major feature would be Liquid Swaps, which we launched in May 2023,” he added.
Around this time, Killian and Michael transformed Boltz from a passion project into a formal business, and in the process, they tried to reach a new user base but experienced some growing pains along the way.
Liquid Swap
“When we launched Liquid Swaps in 2023, we targeted more professional users, specifically the channel rebalancing use case in fee-sensitive (environments),” Killian explained. “We launched it during the fee spike in May 2023.”
The rising fees that Killian mentioned are Ordinal It joined the Bitcoin base chain. Bitcoin transaction fees reached an all-time high by late April 2023.
As fees rose to 500-600 sats/vByte, and in some cases transaction fees exceeded $100, things started to get bad, and even Boltz began to feel the pressure.
“We had to close Boltz for three or four days,” Kilian recalls.
“Boltz was unavailable because all of our working capital was locked in a memory pool and we couldn’t withdraw the funds as fees kept rising. Many similar services had this issue,” he added.
Killian noted that Liquid is a solution for many businesses facing such predicaments.
“Imagine the classic use case of getting inbound liquidity in Lightning. With Liquid you can do that multiple times,” Kilian explains.
“When you send via Lightning, you get inbound liquidity and get Liquid LBTC in return. When we launched this, it made a lot of sense for our users. The launch was successful and it added a bit of excitement to the Liquid ecosystem,” he added.
Kilian also said that the Voltz swap service Aqua WalletThis wallet allows for Liquid to Lightning swaps, which became popular in mid-2023.
Boltz — Behind the Scenes
Aqua is not the only Bitcoin-related product that employs Boltz on the backend.
Breeze Walleta non-custodial Lightning wallet, was actually the first Bitcoin wallet to utilize Boltz’s swap service.
“Breez users may want to send to a regular on-chain Bitcoin address because the merchant only accepts on-chain,” Killian said, “so Breez has integrated an open, publicly available API to offer these swaps directly within the app.”
When a Breez Wallet user makes an on-chain purchase with some sats on Lightning, they simply scan a Bitcoin QR code and the Bitcoin swap is executed in the background via Boltz from Lightning to the Bitcoin base chain.
Killian said Boltz plans to work with more companies to provide services behind the scenes.
“The ability for users to move bitcoin between layers on the fly, without having to open our website, and stay in the product or wallet they’re using, is crucial to a good UX,” Killian said. “Our non-custodial API is something we pioneered and are very proud of.”
How Boltz works — atomic swaps
According to Killian, creating a non-custodial service, especially one that integrates well with other non-custodial services, was no easy task.
As mentioned above, keeping the service non-custodial was essential for Kilian and the Boltz team, in part because they didn’t want to be regulated as an organization that managed users’ funds, and in part because they didn’t want users to have to trust an intermediary to execute their transactions.
“You don’t want to trust some random website or some random project you find on the internet,” Killian explained.
“We also want to engage users who say, ‘Sure, I don’t necessarily know them, but I’ve heard they say they’re non-custodial, and maybe a technician has confirmed that they are in fact non-custodial, so let’s give them a try,'” he added.
The key technology that allows Voltz to be unmanaged is Atomic SwapBoltz is a subcategory of atomic swaps Submarine Exchange.
Submarine Swap Adoption Hash Timelock Contracts (HTLC)Simply put, it cryptographically links two transactions (both sides of a swap) together in a smart contract, allowing them to take place simultaneously. Using this technology, one exchange cannot occur without the other happening at the same time.
This is the least reliable solution for moving SAT between Bitcoin layers.
Then in January of this year, Boltz took this technology to the next level, Taproot SwapThis improves the efficiency of refunds for failed Lightning transactions.
“Until January, if your swap to a Lightning invoice or Lightning destination failed, you had to wait to get a refund,” Killian said.
“It’s a drawback and ultimately bad UX. With Taproot, we have a new way to spend coins. It’s called ‘Key Pass.’ And once this Key Pass is used, you can basically do an instant refund,” he added.
Killian added that Taproot Swaps also enhances privacy as it doesn’t reveal anything about the swap on-chain.
“If an observer of the chain is looking at the chain, they can’t tell if this is part of an atomic swap or even part of a bolt swap,” Killian explained. “That can’t be the case.”
A “privacy-respecting” solution
After Killian mentioned the “P” word – privacy – I asked if Boltz was worried about becoming a target for authorities, especially after the US Department of Justice (DoJ). File a lawsuit To the Samourai Wallet developers.
“I’d be lying if I said I wasn’t worried at all. Everyone is worried, especially in the first few days after the Samurai incident, everyone was very worried,” Killian replied.
However, he was quick to point out that Boltz is not a privacy solution per se, but rather a “privacy-respecting” solution.
“We never CoinJoin Or it will work with the solutions you use to ensure privacy,” Killian said.
“When you do a swap on Boltz, there is at least one party that has information about your deposit and withdrawal, and that is us. You should not trust that we will not leak this information at some point,” he added.
“That being said, we respect your privacy in the sense that we don’t ask for any more information than is strictly necessary to make this work, like a destination address or billing address. We don’t need your email address. We don’t need your IP address. And you can access our service via Tor.”
The Future of Boltz
Going forward, there’s one main role Killian would like Bortz to play.
“Our vision is to be the bridge between layers of Bitcoin,” he said.
“Bitcoin’s Layer 2 Side Chain“The box is not going to close easily because there are so many different layers gaining momentum. This is unstoppable and we want to be the place that connects these layers,” he added.
At the same time, Killian emphasized that lightning remains Boltz’s main focus, as he sees it as the “connective tissue” between Bitcoin’s layers. In that regard, he noted that Boltz recently launched a new client that automates the rebalancing of lightning nodes.
It’s clear that Kilian and the Boltz team will continue to iterate on what they do best while always exploring new opportunities.
Whatever the future holds for Boltz, Killian reiterated that the platform remains focused on being “the easiest, best UX place to move (sat) between layers of Bitcoin in a non-custodial way.”
