Works best when
- Both parties accept extra coordination overhead.
- Circuit complexity or infra constraints block other patterns.
Avoid when
- Near-real-time settlement is required (added latency).
I2I vs I2U — context differences
Institution to institution
I2IBoth counterparties typically have legal recourse if one leg finalizes and the other does not, reducing the practical impact of weak atomicity. Commitments can be backed by bilateral netting agreements. Irreversibility of a one-sided settlement is manageable through off-chain remedies.
Institution to end user
I2UEnd-users lack equivalent legal remedies for a stuck half-settled trade. Protocol-enforced timelocks with forced-refund paths become critical, and the user must be able to unilaterally reclaim funds on any chain without operator cooperation.
Post-quantum exposure
Risk · medium- Vector
- Commitment schemes built on discrete log (Pedersen) broken by CRQC. Signatures on settlement transactions inherit the host chain's signature assumptions.
- Mitigation
- Hash-based commitments (SHA-2, SHA-3) resist CRQC. See Post-Quantum Threats.
Components
- Commitment scheme (hash-based or Pedersen) binds the shared witness
wto a public valueCthat both parties post. - Per-chain settlement contracts accept a settlement transaction that references
Cand verifies local conditions (asset transfer, payment). - Coordination layer (off-chain) holds the pre-image
w, sequences the two legs, and drives retry logic. - Timeout and refund paths on each chain allow a counterparty to reclaim funds if the other leg never posts within a deadline.
- Attestation log (optional) records the commitments and settlement events for later audit.
Protocol
- user Both parties agree off-chain on trade terms and jointly generate witness
w. Each party computesC = Com(w). - user Party A posts the asset leg on Chain A with settlement bound to
C. - user Party B posts the cash leg on Chain B with settlement bound to
C. - contract Each chain locally verifies its leg against
Cand finalizes if valid. - contract If one leg's timeout expires without a matching counter-leg, the affected party invokes the refund path to reclaim their assets.
- auditor A later auditor can correlate the two legs via the shared
Cwithout needing to coordinate the chains in real time.
Guarantees & threat model
Guarantees:
- Both legs are cryptographically bound to the same witness, so neither party can claim settlement against a different trade.
- Each chain's finalization is independent, providing conditional atomicity: if both legs post before their timeouts, the trade is effectively atomic.
- Auditable commitments support post-hoc reconciliation.
Threat model:
- Soundness of the commitment scheme (binding property). A broken commitment allows a party to claim a different
wthan was agreed. - Non-censoring sequencer or validator set on both host chains during the settlement window. A censored leg triggers the refund path but breaks liveness.
- Honest off-chain coordination is assumed. Both parties must actually post their legs; dishonesty is mitigated only by timeouts, not by cross-chain enforcement.
- No cross-chain revert: once one leg finalizes, it cannot be rolled back. True all-or-nothing atomicity is out of scope and requires a different pattern.
Trade-offs
- Slower than single-chain settlement; requires round-trips and retries.
- Meta-linkage risk: the shared
Cis visible on both chains and correlates otherwise-independent flows. - No built-in amount privacy. Each chain's leg reveals whatever the host protocol exposes.
- Refunds require reliable timeout handling on both sides; operational failures can strand funds until manual intervention.
Example
- Two institutions agree off-chain on a bond-for-stablecoin trade and jointly generate witness
w. - The asset issuer locks the bond on the issuance chain with settlement bound to
C = Com(w). - The buyer locks the stablecoin on the payment chain with settlement bound to the same
C. - Both legs finalize independently within their timeout windows. An auditor later correlates the two legs via
C.