Atomic Swaps
Atomic swaps are peer-to-peer exchange of cryptoassets directly from one user’s wallet to another’s conducted without a third-party intermediary. This allows for more secure and private trading versus using a centralized exchange because users remain in control of their private keys throughout the process.
Atomic swaps are enabled through smart contracts. The first atomic swap took place in September 2017 between Decred and Litecoin.
Another advantage of atomic swaps is it is generally cheaper to execute when compared to trades on centralized exchanges. Orders on centralized exchanges are subject to fees based on order size. Whereas the only cost associated with atomic swaps is the transaction fee assessed by the order taker to exchange the assets.
Lastly, atomic swaps allow for the exchange of any pair of assets versus the minimal pairs offered by centralized exchanges. Typically only BTC and ETH in addition to some fiat and stablecoin pairs. For example you would never be able to directly exchange DCR for LTC on a centralized exchange like the pair used for the first ever atomic swap.