Thoughts on the Lava fiasco: Lava’s founder: “The main point of Lava is seeing collateral on-chain. It’s about non-rehypothecation, privacy, and non-custodial guarantees.” Five months later, Lava moved funds from self-custody to custody without user permission—or at least without clear communication. Many of those depositors explicitly picked Lava because that action was supposed to be impossible. Building in this area, it was always obvious that any real-world implementation of DLCs would include unilateral control over the oracle, which obviates the security assurances. It is security and decentralization theatre. Bitcoiners often distrust smart contracts more than DLCs, which is a reasonable instinct. But in this case, smart contracts are exactly what Lava users thought they were getting: transparent, real-time, on-chain, and tamper-proof assurances that no one can quietly rewrite the rules. There are several contracts on Stacks that actually offer these properties. BSD, for example, stores sBTC collateral in a smart-contract vault. Only the creator of the vault can add or remove collateral—no one else. The most invasive, Lava-like action the protocol could take would be to initiate a contract upgrade and migrate the collateral. But that process is fully transparent on-chain and comes with a two-day timelock, giving depositors ample time to exit. In short, smart-contract-based, on-chain systems like BSD lean on transparent rules because they deliver the assurances people actually want—visibility, predictability, and finality.