why would they swap? they cant risk a loss
Atomic cross-chain swap has zero risk attached.
Zero. It is 100% trustless.
The pegging mechanism merely provides a mechanism for market makers to adjust supply of sidecoins based on demand.
It is true that a two-way peg from Bitcoin to a side-chain would necessarily involve hard forking Bitcoin, right? You'd have to somehow signal to the Bitcoin blockchain that the "Bitcoin" represented by the side-chain is returning to the original Bitcoin blockchain.
Is there some OPCODE that can be used on mainnet right now that facilitates two way pegging between Bitcoin and a side-chain?