Liquid isn't a long-term scaling solution on its own (that's obvious), but federations can and will be part of the solution. Many federations (both off-chain like Fedimint and on-chain like Liquid) will scale #Bitcoin alongside Lightning, which will play a key role as the connective tissue between different protocols. There will be no 'one size fits all' scaling solution but rather a range of complementary protocols that cater to specific use cases and markets, each addressing different challenges with a unique set of trade-offs. In July, I wrote about this and the importance interoperability will play within second layers and think it's even more relevant today with the discussions happening over the past week. Give it a read if you like.

Blockstream

Increasing Interoperability Between Bitcoin’s Second-Layer Protocols

The prevailing wisdom is that, in order to achieve hyperbitcoinization, Bitcoin should scale in layers. The current discussion or debate is mainly ...