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In the cryptocurrency world, decentralization is finally starting to take center stage again. Albeit long overdue, it seems some projects are finally coming together. Switcheo introduces its atomic swaps on NEO and EOS this week. A very prominent development which shows how versatile the cryptocurrency industry can be at times.
NEO and EOS Cross-chain Swaps
It is rather interesting to see how atomic swaps can be facilitated between ecosystems which are very different from one another. Albeit EOS and NEO both provide dApp support, it seems both projects are heading in opposite directions at this time. However, that doesn’t mean there won’t be an interest in swapping between these two currencies on the fly. Preferably without going through an “intermediary” such as Bitcoin first.
Switcheo acknowledges there is a lot of untapped potential to be explored in this regard. That is one of the primary reasons why the platform now provides a direct EOS/NEO market for traders to take advantage of. Transactions will be done between both chains directly, making this platform the first to provide cross-chain swaps between these two blockchains.
Rapid Settlement is Crucial
By cutting out the middleman – in this case, a currency traded against both EOS and NEO – one would expect these settlements to occur virtually instantaneous. That will be the case, as both NEO and EOS offer high transaction speeds. As such, the new trading pair seems to be a good match of two markets which share that particular trait. This doesn’t mean both currencies are exclusively linked to one another, but it is a good example of what the future may hold.
The bigger question is whether or not this market will get enough liquidity to make something happen. It is expected an algorithmic market maker will ensure that is the case. A smart touch by the Switcheo team, as they acknowledge illiquid trading markets are a growing problem in the cryptocurrency industry today.
Using Time-locked Smart Contracts
One of the crucial aspects of this particular trading pair is how both blockchains can communicate with one another. Making that happen is a lot more difficult than one may think. After all, EOS and NEO have no native way of communication, let alone cross-chain transaction settlement. A solution had to be found, albeit it is not the most complicated option by any means.
Under the hood, the Switcheo team will make use of time-locked smart contracts which run on both blockchains simultaneously. As such, a core communication protocol can be established without developing entirely new software from scratch. There appears to be a growing interest in these types of smart contracts. Given how many other blockchains can offer similar functionality, it will be interesting to see which further cross-chain swaps will be enabled through Switcheo in the future.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.
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