What Is “Atomic Swap” and How Does It Relate to Intermediary Reduction?

An atomic swap is a peer-to-peer exchange of cryptocurrencies between two different blockchain networks without using a centralized exchange. It relies on a technology called Hash Time-Locked Contracts (HTLCs).

The contract ensures that either both parties receive the funds or neither does, making the transaction trustless. This eliminates the need for a third-party escrow or custodian to facilitate cross-chain trades.