Decentralized Cross-Chain Liquidity Routing Pools via Cryptographic Time-Lock Commitments

International Journal of Computer Science and Technology | Vol. 5, No. 2, February 2024 | pp. 1–8

DOI: 10.46882/2024/IJCST/000229

Article Type: Original Research Paper

Title: Decentralized Cross-Chain Liquidity Routing Pools via Cryptographic Time-Lock Commitments

Names of Authors: Liam O'Donnell¹, Sophia Rossi²

Authors’ Affiliations: ¹School of Computer Science, Trinity College Dublin, Dublin, Ireland; ²FinTech Infrastructure Lab, Bocconi University, Milan, Italy

Abstract: The rapid expansion of decentralized financial architectures has resulted in fragmented liquidity ecosystems isolated across independent, non-compatible blockchain networks. Existing cross-chain bridge mechanisms rely heavily on centralized wrapped tokens, creating single points of failure vulnerable to multi-million dollar exploits. This study introduces a completely decentralized cross-chain liquidity routing protocol utilizing Hash Time-Locked Contracts (HTLCs) combined with threshold signatures. This design allows users to swap digital assets across independent chains without relying on intermediary custody agents. The protocol uses an automated market maker function to balance pool ratios dynamically, minimizing asset slippage across cross-network transactions. We tested the system by processing transactions across independent Ethereum, Avalanche, and Polygon test networks. The tracking evaluations show that cross-chain swaps were finalized within an average duration of 48 seconds. The framework reduced overall transaction cost structures by 28.3% compared to classic bridge implementations while maintaining structural transaction safety.

Keywords: Blockchain, Cross-Chain Bridges, Hash Time-Locked Contracts, Automated Market Makers, Cryptographic Protocols, Liquidity Pools

Manuscript Timeline: Received: August 20, 2023; Revised: October 22, 2023; Accepted: December 05, 2023; Published: February 14, 2024

Citation: O'Donnell, L., & Rossi, S. (2024). Decentralized Cross-Chain Liquidity Routing Pools via Cryptographic Time-Lock Commitments. International Journal of Computer Science and Technology, 5(2), 1–8. DOI: 10.46882/2024/IJCST/000229

Subscribe to read the full article: https://internationalscholarsjournals.org/subscribe-to-read