Discreet Log Contract Factories

A detailed technical proposal for 'DLC Factories' — a Bitcoin transaction pattern that enables multiple Discreet Log Contracts (DLCs) to be created off-chain from a single on-chain funding transaction. The factory can be extended indefinitely without on-chain transactions, and either party can unilaterally interrupt and settle during pre-defined windows. The design uses asymmetric commitment transactions, settlement transactions, and adaptor-signed CETs with oracle attestations for automatic revocation. Key use cases include perpetual CFDs, options-like contracts, and stablecoin-like instruments. The post also compares DLC Factories to DLC Channels, highlighting trade-offs around revocation mechanisms, liveness requirements, and deadlock risks.