A P2P Bitcoin exchange doesn't necessarily need to hold user balances

I've been looking more closely at the architecture behind Mostro after deciding to help the MostroEuropa community.

The part I find most interesting isn't simply “no KYC.”

It's the separation of responsibilities.

Communication happens over Nostr. Settlement happens over Lightning. During a trade the seller's sats are committed using a Lightning hold invoice/HTLC rather than being deposited into a conventional exchange account with an internal user balance.

That doesn't make the system trustless. The coordinator still matters, the implementation matters and dispute resolution matters.

But it gives the intermediary less authority than the normal custodial exchange model.

I wrote up why that architecture convinced me to help an independent European coordinator:

https://davidebtc186.substack.com/p/why-i-chose-mostroeuropa-for-peer

I'm particularly interested in one question:

For P2P Bitcoin markets, which functions actually require an intermediary and which ones can we remove entirely?