#PixelSwap101: What is an Atomic Swap?

Atomic swaps, a.k.a Hashed Timelock Contracts Protocols, enable peer-to-peer exchanges of crypto assets across separate blockchain networks. They operate using a “virtual vault” in the form of a time-bound smart contract, which ensures that funds can only be released when both parties fulfill their obligations by depositing the correct amounts of assets.

The term “atomic” or “atomicity” comes from software development, referring to transactions that must either be completed fully or not at all. In the context of atomic swaps, this means the exchange will only occur if all necessary token deposits are made by the users involved. If any participant does not comply, the transaction is canceled, and all parties are refunded their assets.

Why is it important in the development of the #TON ecosystem?

While decentralized, most blockchains were not originally built to communicate with one another, creating a divide and isolating assets on separate networks. The principle behind atomic swaps is similar to the trustless Bitcoin bridge announced by the TON Foundation, allowing asset holders from other networks to engage in DeFi activities on TON without compromising the security of their original assets. Infrastructures like atomic swaps are crucial for bridging these gaps and will greatly contribute to the further prosperity of the TON ecosystem.