Papers › Atomic Loans: Cryptocurrency Debt Instruments

Atomic Loans: Cryptocurrency Debt Instruments

16 Jan 2019arXiv:1901.05117links table onlyarchive 2025-07-28

Matthew Black, TingWei Liu, Tony Cai

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Atomic swaps enable the transfer of value between the cryptocurrencies of various blockchains without the need to trust an intermediary. In this paper, we propose the concept of atomic loans, which utilize atomic swap technology to allow market participants to create overcollateralized debt instruments in a trustless and disintermediated manner. The primary use cases for atomic loans include enabling fiat/stablecoin access for cryptocurrency holders to participate within legacy systems, as well as enabling leverage for margin trading. We also introduce a bidding process for liquidating collateral in the case of default which provides the ability for a more fair distribution of collateral.

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