Trading across different blockchains nowadays is not just an add-on, but a core necessity for any exchanging platform. In this sense, Jelly Swap offers a user-friendly platform for peer to peer trades across different blockchains.
How Does Jelly Swap Work?
Jelly is a decentralized finance application that permits users to have interoperability across different chains, seamlessly transferring crypto assets between networks.
Jelly Swap runs transactions smart contracts within the Ethereum ecosystem. As we all know, smart contract technology is programmed to be self-reliant in terms of control, which means there is no third-party interaction to worry about.
It is also censorship-free and has no risk of fraud or external interference. Also, it remains completely non-custodial, which means users remain in full control of their assets throughout the process.
Through Jelly, investors can exchange crypto assets from different ecosystems, such as BTC for ETH and vice-versa, for example, using a decentralized and permissionless solution.
Swapping digital assets cross-chain can be difficult (almost impossible) without IT-savvy and lots of patience, but Jelly does all the hard work while customers have an easy-to-use interface.
The design is very straight forward, with a minimalistic “exchanging box” featuring just a swap button. So far, Jelly supports swaps between Bitcoin (BTC), Ethereum (ETH), Aeternity (AE), Dai digital dollars (DAI), and Wrapped Bitcoin (WBTC).
Besides swapping coins, the platform also has the possibility for users who want to act as market makers, earning profitable returns by providing liquidity.
JellySwap doesn’t gather or collect any personal data from users, which is great when it comes to privacy. Users interact with the platform and between each other by using their public keys only.
It also doesn’t support or allow any fiat currency for transactions, so users have to acquire crypto funds to take part in the swapping game.
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The choice of supported coins is strategic, as it covers the three main digital assets available today, BTC, ETH, and DAI, supporting the somewhat underrated AE token as well.
For those unaware, the Aeternity (AE) coin is associated with the æternity blockchain, which is known for its set of innovative functionalities. This chain was engineered to accommodate especially enterprises of large-scale, which indicates Jelly’s team may have foresighted some potential in their structural development over time.
So far, JellySwap doesn’t charge any trading fees from users, but they clearly state that this policy may change depending on their discretion.
Security is King
Jelly Swap uses the Atomic swap technology, which permits users to do swaps between cross-chain cryptocurrencies, all done directly, peer-to-peer style, with no need for a third-party to trust the procedure.
To avoid potential frauds, Atomic swap technology uses a mechanism called Hashed Time-Locked Contracts (HTLCs) to protect all participants within a transaction from potential losses.
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It does it by locking the two transactions (P2P) once they are submitted on the blockchain, so the whole transaction will only be concluded (unlocked) when the two parties fulfill their respective requirements. If one of the parties doesn’t fulfill his duties, the funds are immediately sent back to the sender.
Understanding the Process (In Layman’s Terms)
For instance, let us use a pair of fictional characters (Albert and Bill) to demonstrate the mechanism.
Albert has BTC to trade, while Bill has some ETH available on his own, so the two start a swapping deal. Albert will create a secret key; it will automatically generate a hash.
Albert will submit a transaction in the BTC blockchain, which will be sent to Bill’s address. Until Bill fulfills his duties, the value is locked and safe.
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Bill receives the transaction hash, and now he just needs to create his Ethereum transaction and send it back to Albert (again, the value in ETH will stay locked up until duties are fulfilled, same as BTC before).
Now, there are two transactions in both blockchains (BTC-ETH), locked with the same hash. As Albert has the secret key, he starts by unlocking his ETH, automatically revealing the secret key to Bill in the process.
Bill uses the secret key to unlock his BTC and the cross-chain transaction is done, trustless, and with no need for any sort of middlemen.
The crypto industry is developing an ever-increasing interest in atomic swaps, as it seems to be the definitive solution for interoperability issues between blockchains. JellySwap plays an important role in the current stage of the market, as we are witnessing the rising of a new era of cross-chain platforms.
JellySwap is a non-custodial DApp the operates using the Ethereum ecosystem, which allows users to perform cross-chain Atomic swaps using a user-friendly interface. Their Atomic swap technology is empowered by Hashed Time-Locked Contracts (HTLCs), which is a mechanism to avoid fraud and potential default risk.
So far, it is possible to perform swaps between Bitcoin (BTC), Ethereum (ETH), Aeternity (AE), Dai digital dollars (DAI), and Wrapped Bitcoin (WBTC).