Atomic Swap

Beginner

    An atomic swap is a process of using smart contracts to automatically swap cryptocurrencies from different blockchain networks in a peer-to-peer, decentralized manner. It is one of the most effective peer-to-peer methods to trade crypto assets without intermediaries such as exchanges.

     

    Atomic swaps, also known as atomic cross-chain trading, allow users to trade digital assets across multiple blockchains. On the other hand, token swaps only enable users to exchange tokens existing within a single blockchain network.

     

    An atomic swąp ensures that both parties fulfill all pre-set conditions before completing the trade between the assets. It uses Hashed Timelock Contract (HTLC) technology, which uses a hash function with a time constraint to reverse transactions if either party does not meet the previously agreed upon conditions. 

     

    Atomic swaps are one of the most efficient and decentralized ways to move cryptocurrencies between different blockchains. They can be of two kinds: on-chain swaps between two separate digital assets on two different blockchains or off-chain swaps between crypto assets on a Layer-1 blockchain and its second-layer channel.

    Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information. Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.