I think Counterparty should become the first actual bitcoin sidecahin, offering the same great protocol and wallet but with BTC as its native asset. There might be a way of doing it safely without moving to a new blockchain.
Becoming a bitcoin sidechain has two main advantages: the first is having bitcoin with it's network effect benefits as a native asset. The second is getting more control over the blockchain side, making it more compatible with the required features.
The later comes with a price - the security model of sidechains is not yet clear, there are potential issues with merged mining and all sort of technological risks related to developing and running a new blockchain. But counterparty already did a great job integrating to the bitcoin blocakchain and can continue enjoying the security benefits of bitcoin's hash power.
The first point however - having bitcoin as a native asset - could be critical to counterparty's sucess:
It will solve the BTCPay problem. Disabling BTC trade on counterwallt is a problem. It was one of the main advantages of building on top of bitcoin and without it the DEX can't compete with projects which aren't limited by the bitcoin blockchain or with centralized exchanges which offer BTC markets for assets.
It will allow bets and CFDs to enjoy bitcoin's liquidity, marketcap, infrastructure and basically the network effect. The first decentralized derivative market to really work will be more disruptive than bitcoin itself in terms of capital flowing in - it just won't make sense to manage investments elsewhere. But no real market can be created if XCP with its limited liquidity is required as a collateral, even if it grows dramatically.
It will open the door for other features which require a protocol that can move bitcoin.
Most of the great work which was done is still very much relevant.
Most of the advantages (with the exception of the 10 minute block time) are related to the bitcoin-as-native-currency, rather than to the benefits of a new blockchain. The new blockchain part however, is the complicated and risky one.
The 2-way-peg mechanism presented in the sidechains paper is not 100% clear yet, but it seems like we could use the new script (which validates SPV proofs) for a BTC<->XBTC peg while keeping the same security model and without changing much of the rest.
BTC will be sent to an SPV-locked output and XBTC will be created against it (and the other way around). I won't pretend to have figured it out to details, but i believe it will be possible. Once we are on the XBTC side everything works the same way.
As for XCP, fees could be collected and distributed between XCP holders.
I understand sidechains are only a paper so far, but it seem like a serious effort which will become reality sooner or later. I believe it could be a great opportunity and that it could be done without migrating to a different blockchain, not until it was proven safe.
What do you think?