The World’s First ERC-20 and Bitcoin Atomic Swap Has Taken Place

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At the December 7, 2018, TenX Summit, a group
of developers showcased an industry first: an
atomic swap between a non-native asset, TenX’s
PAY token, and a native asset, bitcoin.
By non-native, the team is referring to an asset/
coin that is not the base currency for the network.
For Ethereum, for example, the native asset is
ether, while any token that is built on the protocol
is considered a non-native asset.
CoBloX, a TenX research and development lab, is
responsible for the achievement. Demonstrating
their work to a tightly packed audience of summit
goers, the team used the Lightning Network and
their proprietary software COMIT to swap 10 PAY
for 71,240 satoshis. The team published a blog
post on December 12, 2018, to confirm the news
and satify what it calls “the gossip factory” of he-
said-she-said following the summit.
In the post, the team delves into their process,
explaining outright that this swap was not as
simple as the first-ever ether and bitcoin atomic
swap they tested nearly six months ago. Whereas
this swap’s hashed time lock contract (HTLC)
only required a single use smart contract, the PAY
to bitcoin swap took an extra step.
Reason being, the PAY token itself is managed
with an additional smart contract known as the
transfer ownership function. Because of this, the
HTLC had to be separated into two transactions:
one to deploy the swap contract and another as a
transfer call for the PAY tokens.
“Unfortunately, we couldn’t figure out how to
combine these two steps. The ERC20 transfer
function uses msg.sender for authentication.
However, calling transfer from a contract
deployment sets msg.sender to the address of the
yet-to-be-deployed contract which obviously has
no tokens,” the blog post reads.
Having used the Lightning Network Daemon (LND)
implementation for the swap, the team continues
to explain in the blog post that the swap is a one-
way ticket. They could only execute the trade by
starting with the ERC-20 token and going through
Lightning — not the other way around.
“An atomic swap cannot always be expressed
through this model of invoices and payments. In
LND, which is what we used for our PoC, receiving
a payment requires an invoice which requires
knowledge of the secret. As a result, we were only
able to do ERC20 to Lightning and not the other
way around.”
The technical milestone is the latest in CoBloX’s
technical successes. As mentioned previously, the
team also completed the world’s first ether and
bitcoin swap. The young lab’s GitHub also
features a couple of Rust clients for a Bitcoin Core
interface and a JsonRPC API plug-in, as well as a
tool for testing blockchain applications.
COMIT , the software used in the ERC-20 swap, is
also open-source. With a focus on blockchain
interoperability, COMIT is meant to act as a bridge
between networks to facilitate cross-chain asset
swaps. In addition to the work that has been done
with Ethereum and its ERC-20 tokens, the team
plans to expand its use with additional features
and currencies down the road.

Source : https://bitcoinmagazine.com/