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  4. A Game-Theoretic Analysis of Cross-Chain Atomic Swaps with HTLCs
 
conference paper

A Game-Theoretic Analysis of Cross-Chain Atomic Swaps with HTLCs

Xu, Jiahua  
•
Ackerer, Damien
•
Dubovitskaya, Alevtina
January 1, 2021
2021 Ieee 41St International Conference On Distributed Computing Systems (Icdcs 2021)
41st IEEE International Conference on Distributed Computing Systems (ICDCS)

To achieve interoperability between unconnected ledgers, hash time lock contracts (HTLCs) are commonly used for cross-chain asset exchange. The solution tolerates transaction failure, and can "make the best out of worst" by allowing transacting agents to at least keep their original assets in case of an abort. Nonetheless, as an undesired outcome, reoccurring transaction failures prompt a critical and analytical examination of the protocol. In this study, we propose a game-theoretic framework to study the strategic behaviors of agents taking part in cross-chain atomic swaps implemented with HTLCs. We study the success rate of the transaction as a function of the exchange rate of the swap, the token price and its volatility, among other variables. We demonstrate that in an attempt to maximize one's own utility as asset price changes, either agent might withdraw from the swap. An extension of our model confirms that collateral deposits can improve the transaction success rate, motivating further research towards collateralization without a trusted third party. A second model variation suggests that a swap is more likely to succeed when agents dynamically adjust the exchange rate in response to price fluctuations.

  • Details
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Type
conference paper
DOI
10.1109/ICDCS51616.2021.00062
Web of Science ID

WOS:000728379200053

Author(s)
Xu, Jiahua  
Ackerer, Damien
Dubovitskaya, Alevtina
Date Issued

2021-01-01

Publisher

IEEE COMPUTER SOC

Publisher place

Los Alamitos

Published in
2021 Ieee 41St International Conference On Distributed Computing Systems (Icdcs 2021)
ISBN of the book

978-1-6654-4513-9

Series title/Series vol.

IEEE International Conference on Distributed Computing Systems

Start page

584

End page

594

Subjects

Computer Science, Hardware & Architecture

•

Computer Science, Information Systems

•

Computer Science, Software Engineering

•

Computer Science, Theory & Methods

•

Computer Science

•

atomic swap

•

blockchain

•

game theory

•

stochastic price

Editorial or Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
SFI-SM  
SFI-GE  
Event nameEvent placeEvent date
41st IEEE International Conference on Distributed Computing Systems (ICDCS)

ELECTR NETWORK

Jul 07-10, 2021

Available on Infoscience
January 1, 2022
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/184213
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