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05 Jun, 2024

Atomic Swap

The direct transfer of cryptocurrency from one party to another, bypassing the need for an exchange or intermediary.

What Is an Atomic Swap?

An atomic swap is a mechanism that allows for direct peer-to-peer trading of cryptocurrencies without a centralized exchange.

Unlike traditional exchanges, atomic swaps are decentralized and enable wallet-to-wallet trading using specially designed smart contracts.

Atomic swaps are based on hash timelock contracts (HTLC).

Each HTLC includes a hash lock, which locks and unlocks the deposited currency with a key known only to the depositor, and a timelock, automatically returns the funds to the depositor if the transaction is not completed within a specified timeframe.

Atomic Swap
Atomic Swap

Secure Cross-Chain Trading with Guaranteed Outcomes

With atomic swaps, when a swap occurs, either both parties receive the desired funds, or nothing happens, and both parties retain their original funds (minus a small transaction fee for the “order-taker”).

Atomic swaps provide a high level of security for digital asset trading.

Atomic swaps can be used for on-chain trading across blockchains with native coins.

The technology is protocol agnostic, allowing for asset swaps between cryptocurrencies.

Off-chain atomic swaps offer faster transaction speeds, although they are still under development.

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