# What is the Liquid Federation? Source URL: https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-the-liquid-federation Updated: 2026-04-09T09:37:48.000Z Category: Liquid Network Section: FAQs --- [The Liquid Federation](https://liquid.net/federation) is a group of more than 80 Bitcoin-aligned businesses, including exchanges, infrastructure companies and asset managers. The Federation fulfills a number of tasks that are integral to the [Liquid Network](https://glossary.blockstream.com/liquid-network/)’s operation. ### Functionary Operation A subset of the Liquid Federation (currently 15 members) operates Liquid functionaries. Liquid functionaries are specialized servers with custom, tamper-proof HSMs that sit at the center of the network. Functionaries perform two roles: - Take turns proposing and signing new blocks on the Liquid sidechain. - Manage the two-way Bitcoin peg and secure the bitcoin held on the network in the federation’s multisig wallet. > **Note:** With the deployment of Dynamic [Federations](https://glossary.blockstream.com/federations/) ([DynaFed](https://glossary.blockstream.com/dynamic-federations-dynafed/)), Liquid now supports the addition of many more functionaries beyond the initial 15. ### Network Governance The Liquid Federation members propose and vote for the representatives on the Federation’s boards that lead decision-making processes related to the network’s operation. - **The Technology Board** oversees the prioritization of new features and develops a technical roadmap for the network alongside Blockstream. - **The Membership Board** provides criteria for the onboarding and removal of federation members. - **The Oversight Board** recommends internal rules for the federation’s protocols and policies and oversees the network’s status. ### Peg-Out Services Every federation member can be added to the Peg-Out Authorization Key (PAK) list. Once added to the PAK list, the Bitcoin addresses of members are whitelisted, enabling them to [perform peg-outs](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-a-liquid-peg-out). [Liquid users](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-are-the-different-types-of-participants-in-the-liquid-network) can convert LBTC to BTC through the federation members’ peg-out services. ### Liquid Network Access for Users Federation members facilitate the access to the network for Liquid users. Members can operate bridge nodes that act as a link between [Liquid nodes](https://helpcenter.dxp-frontend.devserver.app/liquid-network/perform-advanced-liquid-operations/set-up-a-liquid-node) run by users and the Liquid functionaries. ## What Are the Benefits of Being a Liquid Federation Member? Federation members enjoy a number of privileges on the Liquid Network. These may serve as additional economic and strategic incentives for Bitcoin-focused companies that are already interested in joining the Liquid Federation. ### Contribution to the Network's Security The security of the network is in the best interest of its participants. By joining the Federation, members can actively contribute to Liquid’s geographical and geopolitical distribution, and thereby to its resilience. ### Contribution to the Network's Governance All federation members have voting rights in the board election process and can nominate representatives of their own companies for board seats, allowing every federation member a fair chance for a seat at the table. ### Reliable Connection to the Network Members can maximize the reliability of their connection to the Liquid Network by running bridge nodes that directly connect to functionaries via Tor. ### LBTC Peg-Outs Federation members can perform [LBTC](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/how-does-liquid-bitcoin-lbtc-work) peg-outs themselves, allowing for a high level of convenience and independence. Members may also opt to provide peg-out services for their users, providing additional revenue opportunities. For more information on how to become a Liquid Federation member, [review the guide](https://community.liquid.net/c/knowledge-base/how-to-become-a-liquid-federation-member) on the Liquid community forum. Navigation: Blockstream Help Center > Liquid Network > What is the Liquid Federation? ## Related Articles in This Section - [How many confirmations are needed for my Liquid transaction to be secure?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/how-many-confirmations-are-needed-for-my-liquid-transaction-to-be-secure) - [What is the Liquid Network?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-the-liquid-network) - [What is the Liquid Federation?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-the-liquid-federation) (current) - [How does Liquid Bitcoin (LBTC) work?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/how-does-liquid-bitcoin-lbtc-work) - [What is a Liquid peg-in?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-a-liquid-peg-in) - [What is a Liquid peg-out?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-a-liquid-peg-out) - [What are Liquid assets?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-are-liquid-assets) - [How does the Liquid Federation's multisig work?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/how-does-the-liquid-federations-multisig-work) - [How does Liquid keep my transaction data confidential?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/how-does-liquid-keep-my-transaction-data-confidential) - [How do transaction fees on Liquid work?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/how-do-transaction-fees-on-liquid-work) - [What is the transaction capacity of Liquid?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-the-transaction-capacity-of-liquid) - [Does a Liquid address support all types of assets?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/does-a-liquid-address-support-all-types-of-assets) - [What are the different types of participants in the Liquid Network?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-are-the-different-types-of-participants-in-the-liquid-network) - [What is a Liquid Network functionary?](https://helpcenter.dxp-frontend.devserver.app/liquid-network/faqs/what-is-a-liquid-network-functionary)