Security
Last updated
Last updated
Security of atomiq.exchange is based on the concept of atomic swaps.
Atomic swaps are implemented in the form of smart contract vaults on Solana, such that they only pay out the escrowed funds when the counterparty proves that they really sent a bitcoin/lightning transaction. In case of non-cooperation the funds are returned to their original owner in a few days.
Atomicity of the swaps is ensured by submarine swaps (for lightning network swaps) & bitcoin light client (for bitcoin on-chain swaps).
In the following example we have a wallet #1 swapping SOL to BTC received by wallet #2. Liquidity provider node acts as a counterparty for this swap, receiving SOL from wallet #1 and paying out to wallet #2 in BTC. Smart contract vault makes sure that Liquidity provider node can take the SOL from the vault only and only if it successfully pays out the BTC to wallet #2.
In case Liquidity provider node doesn't cooperate the funds will be returned back to the wallet #1 after a timeout, and Liquidity provider node's reputation will decrease.
