SideSwap is paying roughly 600 L-BTC redemptions out of its own bitcoin wallet, the exchange disclosed after reopening L-BTC swaps. The payouts follow the restart of swap activity on the platform, with users queued to convert their holdings back into bitcoin.
The arrangement matters because it separates how users get made whole from how the underlying Liquid federation is capitalized. SideSwap is eating the cost directly rather than routing redemptions through the federation's reserves.
The ~600 redemptions and who's paying
About 600 redemptions came through after SideSwap reopened L-BTC swaps, according to the exchange. The company says it is funding those payouts from its own bitcoin wallet, not from federation reserves.
That's a meaningful distinction. A redemption back into bitcoin normally pulls on L-BTC liquidity and, ultimately, the federation backing. SideSwap is choosing to absorb the hit itself, at least for this batch of users.
The number is small in absolute terms but not trivial. Six hundred redemptions is a concrete, countable queue — the kind of figure an exchange publishes when it wants to show a process is finite and moving.
Reserves still short of full backing
Liquid federation reserves currently cover about 85.8% of outstanding L-BTC. That's the number SideSwap is effectively working around.
In plain terms, the federation doesn't hold enough bitcoin to redeem every L-BTC in circulation at once. It's not a full backing ratio, and the gap is what makes the redemption process sensitive. If every holder tried to exit simultaneously, the math doesn't work.
SideSwap's decision to pay from its own wallet keeps that gap from widening through its platform. Whether that's a temporary bridge or a longer-term posture isn't something the exchange has spelled out.
What the reopening actually fixed
SideSwap restarted L-BTC swaps before processing the redemptions. The sequence matters: swaps first, then payouts. Users who wanted out had to wait for the swap function to come back online before their redemptions could be handled.
The exchange hasn't given a public timeline for clearing the remaining queue, and it hasn't said whether the 600 figure represents the full backlog or a subset. Those are the two questions users will be asking next.
For now, the mechanics are simple. SideSwap pays from its own bitcoin. The federation sits at roughly 85.8% coverage. And several hundred users are watching their redemption status.
