What Is the Risk of “Atomic” Settlement Failing in a Cross-Chain Derivative Transaction?

Atomic settlement is designed to ensure that either all parts of a transaction across two chains succeed, or all parts fail simultaneously, preventing one party from being unfairly disadvantaged. Failure can occur due to network congestion, gas price spikes, or a bug in the bridge or derivative smart contract.

If the atomic swap fails, assets can be locked on one chain without the corresponding action on the other, creating a deadlock and requiring a complex, often manual, recovery process.