Crossing the Gulf — SafeSwap’s Atomic Swap Platform Takes Tokens Cross-Chain, Securely
Blockchain-powered decentralised finance will come to play an important role in the future of sustainable global development. When we recently unveiled our new whitepaper and mission alongside Boston Consulting Group (summarised here), we described an interconnected set of ecosystems that leverage incentives and gamification to drive sustainable behaviour. Decentralised finance is a critical aspect of that vision.
To achieve the levels of compliance, efficiency, transparency and speed expected of vechain, it is essential that we utilise only the most secure solutions, powered by code, in pursuit of our aims. To that effect, today, we highlight SafeSwap — an Atomic Swap platform built by SafeTech Labs — well known for their compliant, rigorously designed technologies. SafeTech recently deployed mainnet node clusters across Europe and the United States, helping bolster VechainThor’s network infrastructure.
In the age of interoperability, it is key that the highways connecting blockchains are failsafe, powered without a need for trusted intermediaries. Atomic Swaps provide a key tool to achieve this vision.
SafeSwap — Path To the Great Beyond
The term ‘atomic swap’ describes the exchange of cryptocurrencies between blockchains, performed by smart contracts and without third party involvement. The rationale of atomic swaps is to remove centralized intermediaries such as regulated exchanges or custodians, giving token owners total control and peace of mind about their assets.
A major appeal of atomic swaps is that they are binary — they either happen, or fail — there is no in-between, eliminating the risk of accidentally deploying unbacked assets existing on another blockchain. By using smart contracts to oversee the transaction, certain conditions need to be met before a timer runs out else no transaction takes place. Smart contracts also help prevent one party stealing cryptocurrency from the other, ensuring fairness in the execution of the transaction.
One of the most common methods for transferring crypto assets between blockchains is via the use of wrapped tokens — native tokens that represent assets on another blockchain. For example, Bitcoin (BTC) can be represented by an ERC-20 equivalent (wBTC) on the Ethereum blockchain. The issue with this, however, is the introduction of counterparty risk. Wrapped tokens rely on an intermediary to hold and manage the real asset from the other chain, and that the asset is actually held in custody to give the wrapped token its value.
In a scenario where the assets underlying wrapped assets are not secured, users on another blockchain may find themselves with unbacked, worthless assets. As the crypto assets of an atomic swap are secured by smart contracts, counterparty risk is eliminated, with crypto assets, and subsequently, the value of assets on the receiving chain, secured.
Tokens Swapped, Safely
One of the core tenets of blockchain is removing the need to trust the counterparty. Atomic Swaps offer projects connecting to and from the VechainThor blockchain the opportunity to do so in a trusted and secure manner, with peace of mind for the security and safety of the assets deposited into the smart contract.
SafeTech Labs have shown their prowess, once again, in building secure technologies that leverage the key attributes of blockchain and Web3. We look forward to future collaboration and developing more DeFi services as we build toward our vision of delivering digital transformation, building sustainability at the heart of global development and transforming society through the power of Web3 and blockchain.
Vechain, headquartered in San Marino, Europe, is the curator of VechainThor, a world leading smart contract platform spearheading the real world adoption of blockchain technology.
Through leveraging the capabilities of ‘trustless’ data (information without intermediaries), smart contracts and IoT technologies, VechainThor has enabled solutions across a wide array of fields. Vechain now turns its attention to the greatest challenge of all — building digital ecosystems to drive sustainability and digital transformation at global scale.
Visit https://www.vechain.org to learn more.