XCLAIM: Trustless, Interoperable, Cryptocurrency-Backed Assets

Abstract

Building trustless cross-blockchain trading protocols is challenging. Centralized exchanges thus remain the preferred route to execute transfers across blockchains. However, these services require trust and therefore undermine the very nature of the blockchains on which they operate. To overcome this, several decentralized exchanges have recently emerged which offer support for atomic cross-chain swaps (ACCS). ACCS enable the trustless exchange of cryptocurrencies across blockchains, and are the only known mechanism to do so. However, ACCS suffer significant limitations; they are slow, inefficient and costly, meaning that they are rarely used in practice.We present XCLAIM: the first generic framework for achieving trustless and efficient cross-chain exchanges using cryptocurrencybacked assets (CBAs). XCLAIM offers protocols for issuing, transferring, swapping and redeeming CBAs securely in a non-interactive manner on existing blockchains. We instantiate XCLAIM between Bitcoin and Ethereum and evaluate our implementation; it costs less than USD 0.50 to issue an arbitrary amount of Bitcoin-backed tokens on Ethereum. We show XCLAIM is not only faster, but also significantly cheaper than atomic cross-chain swaps. Finally, XCLAIM is compatible with the majority of existing blockchains without modification, and enables several novel cryptocurrency applications, such as crosschain payment channels and efficient multi-party swaps.

Balance

“…a XCLAIM does not define how payments are made during redeem (cf. Section VII-F [53]). We assume that a fee is already paid during issue.…”

“…We show that with a decrease of the provided deposit, we can achieve a greater incentive for economically rational agents to behave honestly. • An integration with XCLAIM: we integrate Balance with XCLAIM [53], a protocol that allows two cryptocurrencies to be exchanged without trusted intermediaries, using Solidity 3 . The clear exhibition of event dependency and private information in XCLAIM makes it a highly suitable Balance use case.…”

“…In the following we describe in detail the application of Balance to the XCLAIM protocol. XCLAIM is a generalised protocol that allows exchange of cryptocurrencies across different blockchains without a trusted intermediary [53]. The protocol employs third parties that provide a deposit to be eligible to participate in the protocol.…”

“…Further, a deposit can be used as insurance for tasks performed outside the underlying ledger, e.g. performing verifiable computations [20,30,48], cross-chain assets exchanges [53], or exchanging digital goods [12]. For such usage, the protocol is event-dependent, e.g.…”

“…Balance is applicable to protocols that (i) are implemented on a decentralised ledger, (ii) use a deposit to prevent economically rational agents from performing undesired actions, (iii) require agents to over-collateralize due to at least one of the two identified sources of uncertainty, and (iv) verify interactions with agents through objective specifications ϕ. Suitable examples for integrating Balance are FairSwap [12], TrueBit [48], NOCUST [27], and XCLAIM [53].…”