The Arwen Trading Protocols. presented at FinancialCryptographyandDataSecurity 2020

by Sharon Goldberg, Ethan Heilman, Sebastien Lipmann,

Summary : The Arwen Trading Protocols are layer-two blockchain protocols for traders to securely trade cryptocurrencies at a centralized exchange, without ceding custody of their coins to the exchange. Beforetrading begins, traders deposit their coins in an on-blockchain escrowwhere the agent of escrow is the blockchain itself. Each trade is backedby the coins locked in escrow. Each trade is fast, because it happens offblockchain, and secure, because atomic swaps prevent even a hacked exchange from taking custody of a trader’s coins. Arwen is designed to workeven with the “lowest common denominator” of blockchains—namelyBitcoin-derived coins without SegWit support. As a result, Arwen supports essentially all “Bitcoin-derived” coins e.g., BTC, LTC, BCH, ZEC,as well as Ethereum. Our protocols support Limit and RFQ order types,we implemented our RFQ protocol and are available for use at