What is an Atomic Swap?

An atomic swap is a cross-chain trading mechanism that allows two parties to exchange cryptocurrencies across different blockchains without the need for an intermediary, such as an exchange. The term 'atomic' refers to the fact that each transaction is singular and indivisible. The transaction is either fully completed or voided entirely. Atomic swaps use Hashed Time Locked Contracts (HTLCs), which lock funds for a set period of time while both parties fulfill their end of the transaction. If one party fails to meet their obligation, the transaction is canceled, and funds are returned to their original owners.