Cross-Chain Bitcoin Swaps: Centralized and Decentralized Solutions

Exchanging Bitcoin across different blockchains can be challenging due to their independent operations. However, several methods exist to facilitate this process.

Centralized exchanges (CEX) are one option, where users deposit BTC, exchange it for another supported asset, and withdraw the resulting funds to the desired network. This approach introduces an intermediary that controls the funds during the process and may require account and identity verification.

Decentralized or onchain exchanges use blockchain infrastructure and available liquidity to coordinate transactions. Some protocols use bridges, while others rely on intent-based systems where liquidity providers compete to fulfill a requested outcome. Cross-chain liquidity protocols can also facilitate swaps between assets native to separate networks.

For users exchanging one native asset for another, a direct cross-chain swap can provide a convenient route. The process typically involves requesting a quote, sending the required asset to a unique deposit address, and executing the swap using available liquidity. The resulting asset is then sent to the user's desired network.