Samuel Miller
Sep 20, 2018 · 4 min read

By introducing true decentralization to its infrastructure, Aerum enables the exchange of tokens without the need for a third party, such as an exchange, to guarantee trust. In order to achieve this, the platform takes advantage of atomic swaps.

Atomic Swaps and Their Purpose

Atomic swaps represent a technical means of exchanging tokens without having to go through a trusted third party such as an exchange. In order to achieve optimal efficiency, Aerum takes advantage of two types of atomic swaps:

  • On-chain atomic swaps
  • Cross-chain atomic swaps

It’s worth noting that both of these are included in the Aerum Wallet in both its web and mobile versions. By implementing these two types of atomic swaps, Aerum achieves true decentralization of token payments as well as real-time smart contract interaction.

Now, let’s have a deeper dive into both types of atomic swaps to see why they are so essential to Aerum’s infrastructure.

On-Chain Atomic Swaps

These are designed to enable the trust-less, decentralized exchange of digital assets (e.g. tokens and coins) within the blockchain infrastructure of Aerum.

Two parties are necessary to engage in an exchange with atomic swaps. The first party will create the swap, indicating the name or the address of the other party as well as the specific asset subjected to the exchange, its amount and the exchange rate. The second party will only be accepting or rejecting the swap. It’s that simple.

Simply put, both parties would have to acknowledge the transfer of assets using a cryptographic function. Once this is taken care of, the trade will be completed instantly without having to involve an intermediary.

Why is this necessary? Well, atomic swaps are key to solving a range of otherwise serious issues. For example, they take away the hurdles of having to find compatible coin trading pairs. Furthermore, users no longer have to rely on the exchange’s availability, the imposing fees, and an array of other problems, all of which raise the barrier to market entry.

On-chain atomic swaps represent the base layer of decentralization implemented by the Aerum blockchain.

Cross-Chain Atomic Swaps

Think of these as a more complex variation of the function that on-chain atomic swaps bring. This is because these have to transfer value between two completely separate blockchains.

Within the Aerum blockchain, cross-chain atomic swaps are built to bring the trust-less and decentralized exchange of assets such as the EIP20 tokens which are issued on Ethereum and Aerum blockchain. The mechanism for that is known as a Hash-Lock-Timed-Contract.

There are basically two ways those swaps can be carried out.

  1. Deposit

The user can deposit Ethereum-based assets (e.g. ETH or EIP20 Tokens) to a decentralized swap contract on different Ethereum-based networks. In exchange, he will receive EIP20 tokens on the Aerum network from the exchanging counter-party (referred to as Liquidity Provider).

  1. Withdrawal

The user can simply submit Ethereum-based assets to swap contracts based on the Aerum network. The Liquidity Provider will, as a result, release ETH or EIP20 tokens from another Ethereum-based network.

Things to Consider

Apart from the above, it has to be noted that these operations are commonly time-sensitive. This is because there is a mechanism which enables the asset owner to withdraw assets from the contract if the swap operation has failed or hasn’t been successful. These are deadlines which are not stipulated by the smart contract but are set by the parties while the swap trade is being created.

In order to participate in the trade, Liquidity Providers will be using the Aerum Blockchain Integration Toolkit (AerBIT). This proprietary software has been developed by the Aerum’s team and it’s specifically designed to respond to requests for asset exchange within certain configured limits. This is what enables basic decentralized features to be entirely available to the Aerum user, while eliminating the intermediary nature of exchanges at the same time.

The Aerum project is currently entering its Pilot stage and is in preparations for the mainnet soft launch later in September. To test out the current beta platform, please visit the Aerum website.

You can read more about the Aerum network on its official website or stay tuned on the project’s Facebook or Twitter page. You can also join the live discussion at the official Telegram group.

What do you think of Aerum’s vision? Don’t hesitate to let us know in the comments below!

Aerum Technologies

https://aerum.com/ We make Blockchain blossom

Samuel Miller

Written by

Aerum Technologies

https://aerum.com/ We make Blockchain blossom

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