What Is the Concept of ‘Atomic Swaps’ in Decentralized Finance (DeFi)?
Atomic swaps are peer-to-peer cryptocurrency trades executed directly between different blockchains without the need for a centralized exchange or intermediary. They use smart contracts and Hash Time-Locked Contracts (HTLCs) to ensure that both parties either receive the other's currency or neither does, eliminating counterparty risk.
Glossar
Decentralized Finance
Architecture ⎊ Decentralized Finance, or DeFi, fundamentally reimagines traditional financial infrastructure through blockchain technology, specifically leveraging smart contracts to automate and execute financial agreements without intermediaries.
Smart Contracts
Function ⎊ Smart contracts are self-executing agreements with the terms of the agreement directly written into lines of code, residing on a decentralized ledger.
Time-Locked Contracts
Mechanism ⎊ Time-Locked Contracts represent a pre-defined conditional transfer of digital assets, executed automatically upon fulfillment of specified temporal or event-based criteria, fundamentally altering risk profiles within decentralized finance.