DLCs Are On Bitcoin, Bringing New Functionality And Major Potential
But recent work from developers at Suredbits, Crypto Garage and Atomic Loans — along with efforts from some independent contributors — on Discreet Log Contracts (DLCs) is bringing smart contracting to Bitcoin and will quell some of these critics. DLCs are uniquely positioned to bring smart contracting to Bitcoin using oracle contracts that are much more private and scalable than previously thought possible.
DLC oracle contracts allow for users to make a Bitcoin transaction contingent on an oracle’s signature. This second way to do Lightning DLCs likely won’t be possible until after Taproot is activated, but it would allow these DLCs to be routed across a network and would remove the requirement to have a channel with a user’s counterparty, however this setup requires barrier escrows which have no known major implementations.