How Does an Atomic Swap Differ from Using a Centralized Crypto Bridge Service?
An atomic swap is trustless and decentralized, using smart contracts (HTLCs) to directly exchange assets between two users on different chains. A centralized bridge requires users to trust a third-party custodian to lock the asset on one chain and mint a wrapped version on the other.
The bridge is a single point of failure and censorship risk, whereas the atomic swap removes the need for this trusted intermediary.
Glossar
Atomic Swap
Mechanism ⎊ An atomic swap facilitates the peer-to-peer exchange of one cryptocurrency for another directly between two parties without relying on a centralized intermediary or custodian.
Single Point of Failure
Concentration ⎊ In crypto derivatives, this risk materializes when excessive collateral or governance control resides with a small number of entities, such as a few large liquidity providers or key developers.
Crypto Bridge
Intermediation ⎊ A crypto bridge functions as an intermediary mechanism facilitating token or data transfer between disparate blockchain networks, addressing inherent limitations of isolated blockchain ecosystems.
Bridge
Nexus ⎊ The term "Bridge" within cryptocurrency, options trading, and financial derivatives signifies a mechanism facilitating the transfer of assets or value between disparate systems, protocols, or markets.