This is made possible by incorporating smart contracts, which are self-initiating programs that enforce the conditions governing the success of a transaction.įor example, the two parties involved may agree to set a two-hour time constraint for the atomic swap.
In other words, an atomic swap comes with functionalities that ensure that two sides of trade fulfill all predefined conditions before the trade can be completed. “Atomic” is a terminology used to connote processes that would either finalize or would not initiate at all. In a way, this system preserves the autonomy of crypto users and enables trustless transactions in which users do not need to know one another and are void of counterparty risks.ĭue to the trustless, peer-to-peer nature of atomic swaps, it is widely considered one of the few truly decentralized trading techniques. Sometimes referred to as atomic cross-chain trading, this type of mechanism completely eliminates the need for centralized third-party entities when executing trades. Institutional Distribution IntelligenceĪtomic swaps are automatic exchange contracts that allow two parties to trade tokens from two different blockchains.Non-Traditional Exchanges & New Markets.
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