DEX

TIP8

Placeholder TIP for the concept described in July 2020 Tech paper

Decentralised Exchange using Lightning Network

Via a TSN interfacing other alien Distributed Ledger Technology (DLT) for exchanges is possi- ble. Most of the current DLT’s is based on Prof Of Work (POW) which secures the immutability of the ledger and has been proven to be very robust. The downside for those types DLT’s is the long confirmation time. A suggested solution to decreasing the confirmation time is to use a second layer solution using a network of payment channels like the Lightning Network (LN). Tagion Network (TN) and LN support each other to enable a Decentralised Exchange (DEX) for DLT networks which support full-duplex payment channels, Hashed Time Lock Contract (HTLC) and Multi Signature (MultSig). The advantage of using the TN as a support system to store intermediate data for the payment channels is that the LN-nodes can share data even if some of the LN nodes go offline. In the current LN use in Bitcoin and other similar networks, the routing between the payment channels is a challenge, one of the reasons for this is that the routing tables are difficult to share and maintain between the nodes, but because data is stored in a DART this makes sharing data feasible. Because funds in alien DLT can be locked via an HTLC, the alien-currency (ALC) the funds can be swapped with the native tagion-currency in an atomic manner. This feature enables the Tagion network to support exchange functionality in a decentralised manner providing full liquidity because all exchange pairs have Tagions as the counterpart.