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<ul class="list-ic vertical">
 <li><span>1</span> <a>Atomic Swaps are based on Unique keys that work to facilitate higher security and control.</a></li>
 <li><span>2</span> <a>Timing of the transaction within different cross-cryptocurrency pairs is reduced with Atomic DEX.</a></li>
</ul>
<p>Atomic Swaps is a peer-to-peer trading employed to transfer crypto-currencies between different blockchain exchanges without relying on third parties and excluding bridges, and wrapping. Some of the main features of the Atomic Swap Protocol are: (i) If all parties adhere to the protocol, swap occurs as intended. (ii) The party complying with the protocol will not suffer even if any one party deviates from the protocol. (iii) No party will be incentivized economically to deviate from the protocol.&nbsp;</p>
<p>The Atomic Swaps make use of a special category of smart contracts designed to facilitate exchanges of digital assets known as Hashed Time Lock Contracts (HTLCs). Smart contracts are self-executable predefined contracts.&nbsp;</p>
<h2 class="wp-block-heading" id="strong-components-of-htlc-strong"><strong>Components of HTLC</strong></h2>
<p><strong>Hashlock: </strong>This mechanism enables the security of a contract with a distinct cryptographic key that can only be created by the cryptocurrency’s depositor. The purpose of this unique key is to guarantee that the swap will be completed only when the party that has the key gives their consent to execute the transaction.&nbsp;</p>
<p><strong>Timelock:</strong> This mechanism is linked to the time limit for the completion of the swap. The purpose of this is to guarantee that the transaction should be finalized within the defined time frame. If the transaction is not finalized within the predefined time frame then it is possible that the depositor reclaim funds. The crucial role that is played by Timelock is to ensure the security of swap transactions. Thus, it mandates both parties to execute the transaction within the predefined time frame for a successful swap to complete. These timelocks are created on Check Sequence Verify (CSV) or Check-Lock-Time-Verify (CLTC). With CSV, funds are released or locked only after a certain number of blocks are generated. With CLTV, funds within a transaction are released or locked based on a pre-specified date and time.&nbsp;</p>
<h3 class="wp-block-heading" id="strong-advantages-of-atomic-swaps-strong"><strong>Advantages of Atomic Swaps</strong></h3>
<ul>
 <li>With the Atomic Swaps, it is possible for different blockchains to get interconnected leading to an increase in interoperability.</li>
 <li>Atomic Swaps supports complete decentralization as these are built on the main objectives of blockchain and cryptocurrency such as immutability, autonomy, and programmability.&nbsp;</li>
 <li>It makes it possible for liquidity providers to retain full control of their wallets with the use of private keys and tokens held inside.</li>
 <li>Atomic swap DEX are cost and time-efficient in comparison to their CEX counterparts.</li>
</ul>
<h3 class="wp-block-heading" id="strong-disadvantages-of-atomic-swaps-strong"><strong>Disadvantages of Atomic Swaps</strong></h3>
<ul>
 <li>The newness of dApps and atomic swaps has the potential to develop and be tested for safety and scalability.</li>
 <li>There are only a few atomic crypto pairs available as of now so for not-so-popular pairs it is easy to use CEX rather the Atomic DEX.</li>
 <li>It is only available for crypto-currencies as of now not other financial instruments.</li>
</ul>
<h2 class="wp-block-heading" id="strong-what-is-atomic-dex-strong"><strong>What is Atomic DEX?</strong></h2>
<p>Atomic DEX is a multi-coin wallet, bridge, and atomic swap that fully realizes decentralized order matching and trade clearing. Currently, it has 500 cryptocurrencies that users can use on Atomic<a href="https://www.thecoinrepublic.com/2023/10/15/everything-about-order-book-models-in-decentralized-exchanges/" rel="noopener noreferrer nofollow"> DEX extracted</a> from a number of different blockchain networks.</p>
<p>Atomic DEX facilitates quick, simple atomic cross-chain trading. Through this Atomic DEX, popular tokens on chains like Ethereum, Binance, Smartchain, and Litecoin can be directly traded for Bitcoins in the Bitcoin blockchain in minutes at lower transaction fees than the CEX. Atomic DEX allows traders to own and control their wallets through their private keys.&nbsp;</p>
<h4 class="wp-block-heading"><strong>Conclusion</strong></h4>
<p>The Atomic swaps are an upcoming solution for increasing efficiency in peer-to-peer transactions to promote the interconnectivity of cryptocurrencies trading on different exchanges.</p>

Atomic Swaps Improving Security and Cost Efficiency in DEX

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Thecoinrepublic.com

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