Cross-chain Trading Network Using Smart Contracts
Tran, Huy Quang
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The blockchain, a secured and distributed database design, has been introduced and launched for ten years. Since then, a significant number of cryptocurrencies and financial trading markets using digital assets have also been introduced over time. Despite the fluctuation in the exchange rate, blockchains and its cryptocurrencies have no remarkable change overall. They still follow the old-traditional trading mechanism, which exchanges between cryptocurrencies and fiat currencies. Although few projects are emerging to enlarge a blockchain's trading usage, i.e., cross-chain liquidity, it still limits itself on swapping one type of cryptocoin with another type. Beyond supporting swapping coins, the blockchain could be applied and extended to become a trade-payment network that connects multiple solitary blockchain-based platforms. In this thesis, I propose a heuristic cross-chain trading system that leverages the blockchain technology to build a fair and border-less trading network across multiple decentralized blockchains by taking advantage of smart contracts and ERC-20 protocol. To demonstrate the feasibility of this proposal, I provides a concrete example and design of a cross-chain trading network between three popular systems, which are Bitcoin, Lightning Network Daemon, and Ethereum.