Atomic swap

An atomic swap is a cross-chain crypto exchange with a cryptographic guarantee that both transfers happen or neither does. It uses a construction called a Hash Time-Locked Contract (HTLC): party A locks funds on chain 1 with a hash-lock, party B locks funds on chain 2 with the same hash-lock and a shorter timeout, and both funds unlock only when the pre-image (the "secret") is revealed on-chain by one of them. If either party abandons the swap, the funds return automatically after the timeout.

The property is called atomicity: the whole swap is one indivisible operation from an economic standpoint, even though it spans two chains. No trusted third party is needed to hold funds during the exchange — the smart-contract primitives on both chains enforce the trade.

True atomic swaps are elegant but slow, complex to implement across chains that do not natively support HTLC, and require both parties to be online for the reveal step. In practice, most crypto users do not do direct atomic swaps between random peers; they use aggregators or exchanges that route through market-making providers.

SwapZilla is not an atomic-swap protocol. It is a multi-provider aggregator that routes swaps through integrated exchange providers, each of which handles the actual cross-chain settlement (sometimes using atomic-swap-like mechanisms internally, sometimes using bridged liquidity). The user experience is non-custodial, but the underlying mechanism is provider routing, not direct on-chain atomic swap.