What Is the Risk of “Time Lock Expiration” in an Atomic Swap?

The time lock is a safety mechanism. If one party fails to complete their side of the swap before the time lock expires, the contract is automatically canceled.

The funds are then safely returned to the original sender. The risk is that the desired exchange simply does not occur, forcing the user to attempt the swap again, potentially at a less favorable exchange rate.

It prevents funds from being permanently stuck.