Atomic Swap
A trustless exchange of cryptocurrencies between different blockchains without requiring an intermediary.
In-Depth Explanation
Atomic swaps use hashed timelock contracts (HTLCs) to ensure either both parties receive their funds or neither does—no counterparty risk. While elegant in theory, atomic swaps face practical limitations: both chains must support the same hashing algorithm, and timing requirements can be complex. Bridges and DEXs have largely superseded atomic swaps for cross-chain trading.
Related Terms
Bridge
A protocol that enables transferring assets or data between different blockchains.
Hashed Timelock Contract
HTLCA smart contract that locks funds with two conditions: a cryptographic hash preimage and a time deadline.
Cross-Chain
Interactions, transactions, or asset transfers between different blockchain networks.
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