Whitepaper

BTC ⇄ SOL Atomic Swap Protocol

Version 1.0 | Last Updated: January 2025

Abstract

This whitepaper presents a novel approach to cross-chain atomic swaps between Bitcoin (BTC) and Solana (SOL) using the Internet Computer Protocol (ICP) as a trustless coordination layer. Our solution leverages threshold cryptography and smart contract escrow to enable secure, non-custodial exchanges without intermediaries.

By utilizing ICP's native Bitcoin integration and Solana RPC capabilities, we achieve true atomic swaps with automatic settlement, timeout protection, and minimal fees of $0.01 per transaction.

1. Problem Statement

The Cross-Chain Challenge

Bitcoin and Solana operate on fundamentally different blockchain architectures, making direct asset exchanges impossible without trusted intermediaries. Traditional solutions include:

Centralized Exchanges (CEX): Require custody of funds, KYC, and trust in the platform
Wrapped Tokens: Introduce bridge risks and additional complexity
Traditional Atomic Swaps: Require both parties to be online simultaneously

These solutions compromise on security, decentralization, or user experience. Our protocol addresses these limitations through ICP-coordinated escrow with threshold signatures.

2. Technical Architecture

2.1 System Components

ICP Canister

Smart contract coordinator written in Rust, managing order state and executing threshold signatures

Threshold ECDSA

Distributed key generation for Bitcoin addresses, ensuring no single entity controls funds

Bitcoin Integration

Native ICP Bitcoin API for UTXO tracking, balance queries, and transaction broadcasting

Solana RPC

HTTPS outcalls to Solana network for balance verification and transaction submission

2.2 Swap Flow

Order Creation

User specifies swap parameters (BTC amount, SOL amount, timeout). Canister generates unique deposit addresses using threshold signatures.

Deposit Phase

Users deposit BTC and SOL to canister-controlled addresses. Background watchers monitor confirmations every 30 seconds.

Verification

Canister verifies 3 confirmations for BTC and 32 confirmations for SOL before proceeding to settlement.

Atomic Settlement

Once both deposits confirmed, canister signs and broadcasts transactions to send BTC to SOL depositor and SOL to BTC depositor.

Completion

Order marked as completed. Users receive their swapped assets directly to their wallets.

3. Security Model

3.1 Threshold Cryptography

Our protocol uses threshold signatures to ensure no single entity can control user funds:

Distributed Key Generation: Private keys are split across ICP subnet nodes
Threshold Signing: Requires consensus from subnet to sign transactions
Non-Custodial: No single node or entity can steal funds

3.2 Timeout Protection

All orders have a 24-hour expiration window. If both deposits are not confirmed within this timeframe, users can request refunds. The canister automatically signs refund transactions using threshold signatures.

3.3 Attack Vectors & Mitigations

Double-Spend Attack

Mitigation: Require 3+ confirmations for BTC and 32+ for SOL before settlement

Front-Running

Mitigation: Orders are matched at creation time with fixed rates

Canister Compromise

Mitigation: Threshold signatures across subnet prevent single-point failure

4. Economics & Fee Structure

Platform Fee

$0.01

Per swap transaction

Avg. Settlement Time

12 min

From deposit to completion

Fee Breakdown

ICP Canister Cycles~$0.005
Bitcoin Network Fee~$0.003
Solana Network Fee~$0.002

Total Platform Fee$0.01

5. About the Project

Mission

Our mission is to enable trustless, secure, and efficient cross-chain asset exchanges without compromising on decentralization or user experience. We believe that blockchain interoperability should be accessible to everyone, not just technical experts.

Why ICP?

The Internet Computer Protocol provides unique capabilities that make it ideal for atomic swaps:

Native Bitcoin Integration: Direct access to Bitcoin network without bridges
Threshold Cryptography: Built-in support for distributed key generation
HTTPS Outcalls: Ability to interact with any blockchain via RPC
Deterministic Execution: Guaranteed transaction ordering and finality
Low Cost: Minimal cycle costs enable $0.01 transaction fees

Roadmap

Q1 2025 - MVP Launch

Basic BTC ↔ SOL swaps with threshold signatures and automatic settlement

Q2 2025 - Order Book

Maker/taker model for better price discovery and liquidity

Q3 2025 - Multi-Asset Support

Add ETH, USDC, and other major cryptocurrencies

Q4 2025 - Lightning Integration

Instant BTC settlements via Lightning Network

Open Source

This project is open source and available on GitHub. We welcome contributions from the community and encourage security researchers to audit our code. Transparency and community involvement are core to our values.

6. Conclusion

The BTC ⇄ SOL Atomic Swap protocol demonstrates that true cross-chain interoperability is possible without sacrificing security or decentralization. By leveraging ICP's unique capabilities—native Bitcoin integration, threshold cryptography, and HTTPS outcalls—we've created a system that is both technically sound and user-friendly.

As blockchain technology continues to evolve, cross-chain solutions will become increasingly important. Our protocol provides a foundation for trustless asset exchanges that can scale to support the entire cryptocurrency ecosystem.

References

[1] Internet Computer Protocol - Bitcoin Integration: https://internetcomputer.org/bitcoin-integration
[2] Threshold ECDSA on ICP: https://internetcomputer.org/docs/current/developer-docs/integrations/t-ecdsa/
[3] Atomic Swaps: A Comprehensive Guide: https://en.bitcoin.it/wiki/Atomic_swap
[4] Solana Documentation: https://docs.solana.com/
[5] ICP HTTPS Outcalls: https://internetcomputer.org/https-outcalls