Bitlayer Research: Analysis of DLC Principles and Optimization Thoughts
Discreet Log Contract (DLC) is a set of oracle-based contract execution schemes proposed by Tadge Dryja from MIT in 2018. DLC allows two parties to make conditional payments based on predefined conditions. The parties determine possible outcomes and pre-sign them, and use these pre-signatures to execute payments when the oracle signs the outcome. Therefore, DLC enables new decentralized financial applications while ensuring the security of Bitcoin deposits.