Why is having Lightning Network atomic swaps a big deal for crypto traders?

There are three clear reasons:

1. Cheaper network transaction fees compared to using on-chain BTC

2. Faster swap completion times compared to using on-chain BTC

3. Better blockchain interoperability between the Bitcoin blockchain and the greater blockchain ecosystem

1) Cheaper Fees

The network fee to make an atomic swap reduces from the BTC on-chain average of ~10,862 sats (including maker and taker) to 0.004 satoshis (4 millisatoshis) with Lightning Network.

In USD terms:

BTC on-chain = $2.52 per trade

Lightning Network off-chain = $0.00000093 per trade

Conclusion: Using Lightning Network was over 2.7 million times less expensive!

This is just one example, and actual fees will vary a bit based on different factors. However, the cost savings per trade using Lightning Network is undeniable.

2) Faster Swaps

1 confirmation for a BTC on-chain transaction is 10 minutes x 2 (including maker and taker). Lightning Network transactions are instantaneous or only take a few seconds. 1 confirmation for the DigiByte network takes 15 seconds x 2 (including maker and taker).

On-chain BTC to on-chain DGB trade (or vice versa) = ~20.5 minutes

Off-chain Lightning Network to on-chain DGB trade (or vice versa) = ~0.5 minutes

Conclusion: Using Lightning Network saves an estimated 20 minutes per trade on average!

Note that the swap time varies based on a few different factors (i.e. if using a different blockchain that has longer confirmation times).

Our DGB/BTC Lightning Network swap was made with the command line, and we're working towards implementing Lightning Network atomic swap compatibility in all AtomicDEX GUIs. Rather than being a "cross-chain" swap, this is technically called a "submarine swap" because it is a trade between an on-chain digital asset and an off-chain digital asset.

3) Better Interoperability

Our flagship decentralized application (dApp) — AtomicDEX — will have the world's widest multi-protocol support of any Lightning Network-compatible DEX!

Users will be able to trade BTC on Layer 2 (Lightning Network) with cryptocurrencies from Layer 1 chains (Ethereum, Avalanche, Dash, and more).

The Historic Transaction

Let's dive into a block explorer breakdown of this historic swap.

DGB maker payment:

Here is the Lightning Network taker payment on the taker side. The screenshots are from a taker node since Lightning Network payments are not publicly broadcasted.

Here is the Lightning Network taker payment on the maker side. The screenshot is from a maker node.

Here is the block explorer link to the taker spending the DGB maker payment.

Try AtomicDEX Today

AtomicDEX is available via web browser as well as a downloadable mobile app and desktop app. HODL, bridge, and trade your favorite cryptocurrencies from dozens of blockchains. AtomicDEX supports the most blockchain protocols of any DEX on the market.