9. Atomic swaps

Bridges are the largest source of losses in the industry: a bridge holds the assets of one chain and issues claims on another, and whoever controls its keys or its contract controls everything it holds. Tesserax trades with other chains through atomic swaps instead. Each party keeps its own assets, locked under the same hash on its own chain; either both sides complete, or both are refunded. No one ever holds the other party's funds.

9.1 What can be traded

Chain	Assets
Bitcoin	BTC
Ethereum	ETH, USDC, USDT
Base	ETH, USDC
Arbitrum	ETH, USDC, USDT

The testnet pairs with Bitcoin testnet4 and the Sepolia test networks of the EVM chains.

9.2 Roles

• A maker posts an offer on Tesserax: an amount of TESS, a price in a payment asset, the smallest trade, and the payout — an EVM address, or a compressed public key on Bitcoin. The TESS and a deposit of 0.036 TESS are held by the runtime.
• A taker — who may not own a single TESS yet — buys from the offer by locking a payment on the payment chain.
• A buyer posts a bid: the TESS it wants, a price and the smallest sale. Only the deposit is held; the payment is locked sale by sale.
• A seller — a miner cashing in its rewards — sells into a bid at once, without waiting for a buyer to come (section 9.4).

9.3 Protocol

1. The taker draws a 32-byte secret $s$ and computes $h = \text{SHA-256}(s)$.
2. The taker locks the payment on the payment chain for the maker, under $h$, for 24 hours, referencing the offer and its Tesserax account.
3. The maker checks the lock: the asset, the amount the price requires, its own address, the hash, and at least 12 hours remaining. It then fills the offer: the TESS are locked on Tesserax for the taker under $h$ for 6 hours (1,200 blocks). The payment lock can fill only one trade.
4. The taker claims the TESS by revealing $s$. The claim needs no signature and no fee — the secret authorizes it — so a taker with no TESS can complete it.
5. $s$ is now public on Tesserax. The maker uses it to claim the payment before its lock expires; having filled only with 12 hours left, it has at least 6 hours after the trade window.

If the maker never fills, the taker takes back its payment after 24 hours. If the taker never claims, the TESS return to the offer after 6 hours and the taker takes back its payment after 24. The ordering of timeouts — the taker's lock outlasting the maker's by at least 6 hours — ensures that the party who reveals the secret is always the one who can still be refunded.

The amount due for $a$ TESS at price $p$ (in the asset's smallest unit per TESS) is

$$\text{due} = \left\lceil \frac{a \cdot p}{10^{12}} \right\rceil .$$

9.4 Bids

With offers, the party that sells TESS waits for a buyer. Bids reverse the order of the protocol, so that a seller acts first and alone; the secret then belongs to the seller.

1. The seller draws $s$ and sells into the bid: its TESS are locked on Tesserax for the buyer under $h$ for 24 hours (4,800 blocks), with the address or the Bitcoin key it is paid to.
2. The buyer, with at least 12 hours of the sale left, locks the payment for the seller under $h$ for 6 hours and records the lock on Tesserax; a lock pays one sale.
3. The seller checks the payment as a maker checks one — asset, amount, its address, the hash, and on Bitcoin 2 confirmations — and claims it with $s$.
4. $s$ is now public on the payment chain. The TESS are claimed for the buyer with it, without signature and without fee; the seller's wallet does it right after being paid, and the buyer can always do it from the Claimed event of the contract or the witness of the Bitcoin claim.

A buyer that never pays costs the seller only time: the sale returns to it after 24 hours. A seller that never claims gets its TESS back after 24 hours, and the buyer its payment after 6. The ordering of timeouts is the mirror of offers — the lock of the secret's owner, here the seller's TESS, outlasts the other by at least 6 hours.

9.5 On EVM chains

TesseraxSwap is one hash time-locked contract deployed at the same address on every chain, 0xeA2f4f08D2A0f1972031B98De63f4B0395c256Fc:

• lock(recipient, token, amount, hash, timelock, offer, taker) locks ETH (token zero) or an ERC-20 and emits Locked with the offer and the Tesserax account of the taker; tokens that take a fee on transfer are refused;
• claim(id, secret) pays the recipient if $\text{SHA-256}(\text{secret})$ matches, before the timelock — anyone may call it;
• refund(id) returns the funds to the sender after the timelock — anyone may call it.

9.6 On Bitcoin

Bitcoin has no contracts but has scripts. The payment is a P2WSH output with the script:

OP_IF
  OP_SIZE 32 OP_EQUALVERIFY OP_SHA256 <h> OP_EQUALVERIFY <maker_key>
OP_ELSE
  <timelock> OP_CHECKLOCKTIMEVERIFY OP_DROP <refund_key>
OP_ENDIF
OP_CHECKSIG

The maker spends it with the secret and its signature; the taker spends it after the timelock. The same transaction carries:

• a 330-satoshi output to the maker's address, so the maker sees the payment by watching its own address;
• an OP_RETURN announcement of 78 bytes — the magic TX, the offer, the taker's Tesserax account, the hash and the timelock — or of 111 bytes with magic TR, adding a separate refund key.

The TR form lets wallets that cannot sign script spends, such as browser wallets that only sign standard payments, lock funds whose refund is signed by a key the Tesserax wallet derives from its own seed. The maker fills after 2 confirmations; the payment lock recorded on Tesserax is the 36-byte outpoint. The claim transaction of the maker also sweeps the 330-satoshi notices.

The Bitcoin side of a swap is signed with ECDSA, like every Bitcoin transaction, and is only as quantum-safe as Bitcoin itself; the same holds for the EVM chains. The Tesserax side uses no classical signature: the fill is signed with ML-DSA and the claim needs no signature at all.

9.7 Market data

Offers, bids, trades and sales are indexed by the explorer, which publishes order books — offers on the ask side, bids on the bid side — tickers, trades and the supply in the format of market-data aggregators.