Atomic swaps are mainly trustless exchanges of cryptocurrencies between two parties under the smart contract. The transactions occur between assets of different blockchains, on-or-off chain, and don't depend on third-party services such as a crypto exchange. At the time of the process, users maintain full control and ownership of the private keys.
The Liquid Network is an associated sidechain on the bitcoin blockchain (BTC) which works as a settlement and payments network for crypto exchanges, market makers, brokers, and various financial institutions.
Along with the support of privacy features like Confidential Transactions, the networks primary purpose is to fight against delayed transaction finish on the Bitcoin (BTC) network and enable fast and secure transfers hence traders can effectively increase their arbitrage opportunities.
As per the Blockstream's announcement, the atomic swaps will support, “any issued asset such as L-BTC, tokenized fiat, crypto assets, attested assets and more” along with the firm launching a Liquid Swap Tool Configuration guide as part of its developer set.
According to the tweet July 1, Adam Back, who is the Blockstream CEO and hashcash inventor said:
“[A]tomic swap between native assets on Liquid L-BTC, L-USDT, etc. is simpler than cross-chain atomic swap, because the Bitcoin UTXO model transaction rule "inputs add up to outputs" is extended to add up inputs of each type, and types/assets are natively understood.”
CTO of Huobi Global, Xiangfeng Cheng said that Liquid's sidechain technology would “enhance bitcoin liquidity, lower interexchange transaction times to 1-2 minutes, and even reduce the spread between exchange prices.”
The recent declaration by Adam Back supports for the continued progress of Blockstream's Liquid Network. Earlier in May, the firm declared the expansion of the network to introduce 14 new members, along with crypto exchange Bitfinex and crypto finance platform RenrenBit.
The latest initiative helped to increase its team to 35 members. Paolo Ardoino, Chief Technical Officer at Bitfinex, said that this is a very crucial step which makes sure that more institutions can now obtain digital assets under the single blockchain.