Why would Bitcoin become incentive incompatible if Drivechains are allowed?

Because coin value maximization (i.e. risk/trust minimization) may stop being the main driver of tx fees.

1. Let's say over 2/3 of Bitcoin miner fees end up coming from DC transaction fees, through BMM.

2. Then, for some reason, the DC splits in two forks with similar hashpower, making unclear what side would win a race to withdraw coins to the main chain.

3. This split can be expected to spread to Bitcoin. If DC fees dominate, the race would otherwise be won by the fork with more valuable DC transactions, regardless of whether it maximizes bitcoin value or not.

Bitcoin transaction demand ≠ bitcoin demand.

4. I tend to believe Bitcoin would likely split in 3 in such scenario, as some holders may prefer to remove DC induced risk altogether and disallow Drivechains (potentially dominant hashrate escrows in general).


5. Unless you don't think a trust-minimal asset will always be demanded by the market, why would you want to go through all these shenanigans?

P.S. While this is an extreme case for clarity, much smaller levels of DC fee revenue may affect Bitcoin incentives and represent a damage to bitcoin owners.

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