PSBT

Atomic Execution Architecture

PSBTs provide the cryptographic foundation for atomic swaps within DotSwap Nexus, ensuring either complete asset exchange or transaction failure without partial execution risks. This approach eliminates counterparty risk through Bitcoin's consensus mechanism while enabling complex multi-party coordination.

Execution Coordination Framework

The PSBT execution process follows a systematic approach that balances security, efficiency, and user control:

Stage	Process	Security Validation	User Control
Draft Construction	Nexus Composer assembles inputs, outputs, and safeguards	Comprehensive validation of all transaction components	Complete transaction transparency before commitment
Maker Signatures	Each participating node signs owned inputs after validation	Independent validation by each liquidity provider	Maker risk controls and execution limits
Taker Review	User verifies outputs including amounts, fees, and change	Pre-commitment verification of all transaction outcomes	Final approval authority with complete information
Final Signature	Taker completes signature requirements	Cryptographic completion of atomic execution	Irreversible commitment with full awareness
Network Broadcast	Transaction propagated for consensus confirmation	Bitcoin network validation and confirmation	Transparent settlement with verifiable outcomes

Built-in Protection Mechanisms

The protocol implements comprehensive safeguards protecting all participants throughout the execution process:

Transaction-Level Protections:

• Slippage Guard Outputs: Automatic transaction invalidation if final execution rate exceeds user tolerance

• Time-Lock Mechanisms: Automatic cancellation preventing indefinite fund commitment through nLockTime implementation

• Fee Bump Compatibility: Replace-by-fee support enabling priority adjustment for reliable confirmation

• Conditional Execution: Complex conditional logic ensuring execution only under specified conditions

Operational Safeguards:

• Pre-execution Simulation: Complete transaction simulation before signature collection

• Multi-party Validation: Independent verification by all transaction participants

• Real-time Monitoring: Continuous status tracking throughout execution lifecycle

• Emergency Recovery: Systematic procedures for handling exceptional scenarios