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  1. Home
  2. /Glossary
  3. /Hashed Time-Lock Contract (HTLC)
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blockchain

Hashed Time-Lock Contract (HTLC)

A smart contract that requires the recipient to acknowledge receiving payment within a timeframe by generating a cryptographic proof, or the payment returns to the sender.

Definition

A smart contract that requires the recipient to acknowledge receiving payment within a timeframe by generating a cryptographic proof, or the payment returns to the sender. HTLCs are the building blocks of atomic swaps and the Lightning Network. They ensure that cross-chain trades are either completed fully or not at all.

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Related Terms

Atomic Swap

A way to trade cryptocurrencies directly between different blockchains without using an exchange.

State Channel

A Layer 2 scaling technique where two parties open a channel, transact off-chain as many times as they want, and only settle the final result on-chain.

Smart Contract

Self-executing code stored on a blockchain that runs when conditions are met.

ABI

Application Binary Interface.

Account Abstraction

A way to make crypto wallets behave more like normal apps by turning every account into a smart contract.

ERC-4337

The Ethereum standard for account abstraction without changing the core protocol.

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