Discreet Log Contracts (DLC) are a new type of smart contract which limit the information gained and influence of oracles, and can run on the very limited scripting system present in Bitcoin, without the need for more complex languages such as in Ethereum.
DLC works by precomputing a wide range of potential outcomes for a given contract, and when the oracle announces an event, the event-dependent correct outcome can be published. There are a number of applications where this model applies, and the one that we’ll be starting with first is Bitcoin settled dollar futures. This use case introduces a useful tool to mitigate the volatility of Bitcoin.