How do cross chain swaps work?

Diggles “How exactly will the network be able to swap from other main chains. Meaning, how does the interoperability work where you can swap directly from for example Ethereum to Bitcoin, or Dag to Polkadot or a dot. So, I know you touched a little bit on this at the beginning, but maybe you can just touch on it again.”

Wyatt “Yeah, absolutely. So, this actually ties into emissions, this new data structure that was created, that’s sort of like chirally symmetric to itself but also, it’s like an inverse of a transaction. Anyway, the tldr here is basically when we create an integration on an existing L1, let’s say it’s Bitcoin or something. What we want to do is make a modification to a Bitcoin core miner, such that it is running an L0 Dag process. And now, when we actually want to define that integration and sort of deploy the equivalent of like a smart contract to the L0 for that L1, say it’s like Bitcoin, then what we do is define the data structures, and we also define the mechanics as to how the network itself of Bitcoin, how those nodes converge and agree on how funds are transferred on behalf of the L0 consensus.

So, think of L0 consensus as being like a meta sort of consciousness, like an awareness of all these different protocols. And so, in the L0 actual integration process, these L1 nodes will basically say “Hey, we’re going to do a 50% majority or this you know strength of I guess a you know Merkel root tree thing, in order to converge. And so, when that’s actually present and available, then that validation criteria which has been defined by the L1, is then finally processed again in global convergence.

So, what happens is in the L1, let’s say it’s for the Bitcoin, they will, like a Bitcoin developer will decide, and folks will decide what are the criteria, the validation criteria, for transacting between one account balance on Bitcoin and potentially making a modification of another account balance within this sort of like liquidity pool. So, let’s say like transacting the Bitcoin reducing someone’s account, putting it into a liquidity pool which is just a bunch of different random accounts managed by nodes, and then fluctuating a different token in reverse. So, essentially acting as like an orderbook, but in a decentralized way.”

#WyattQuotes Hypergraph Hour 23 41m34s Timestamped link

Author: Vegeta