Up until very recently, the only way for traders or cryptocurrency/cryptoasset holders to acquire altcoins was to make use of BTC or ETH pairings on various decentralized exchanges, often limiting what is accessible or forcing users to subscribe to multiple exchanges to trade specific tokens. This structure has strengthened the position of larger cryptocurrencies causing Bitcoin and Ethereum to act as the backbone of the entire cryptocurrency market, creating a “mains versus alts” dynamic where traders will alternate between the large cryptocurrencies and the altcoins attempting to maximize their returns and ride off the price fluctuation back and forth between the de facto “classes” of coins. Although having benefited some traders who’ve recognized it, this dynamic goes against the overall goal of true decentralization championed by many in the cryptocurrency community and gives big exchanges control over the market.
With the recent implementation of the Lightning network in many Blockchains, true cross-chain trading could soon be realized en masse. Atomic swaps make use of hash time-locked contracts which are facilitated by most programming languages used in cryptocurrency development. By using this feature, parties may agree upon a fixed trading price and complete a set of trades on two different Blockchains in one instance. This direct trading structure results in one trade that acts on two separate Blockchains, eliminating the need for a central party. The ability to directly trade coin-to-coin outside of an exchange will have an immense effect on the crypto-markets and is a feature that will prove necessary as cryptocurrencies and cryptoassets grow in prevalence.