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

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