In 2025, custody-related events cost the cryptocurrency industry billions of dollars. The loss highlights the need for solutions that mitigate vulnerabilities in cryptocurrency transactions. Pact Swap is one such solution.
In this interview, we talk to Toby Gilbert, co-founder of Pact Swap. Toby explains how the exchange utilizes collateralized smart contracts to enable cheaper swaps (90% less expensive than existing solutions) while eliminating custody risk. These features make Pact Swap the ideal trading venue and infrastructure layer for moving value across chains.
Q: Hello Toby, let’s begin with a brief introduction as you tell us about your role at Pact Swap.
A: As a co-founder of Pact Swap and one of the co-founders of Coinweb, the underlying infrastructure on which we are built, my focus is on ensuring that what we build solves real-world problems in the market and can compete under actual market conditions. That means enabling cross-chain trading that can compete on price and asset coverage without forcing users to return to centralized exchanges.
It also means working closely with partners, liquidity providers, aggregators, and users to understand where existing solutions break down. Ultimately, my role is about turning those insights into a product that the market actually needs today, not something that only looks good on a whitepaper.
Q: As the CEO of a major blockchain platform, what do you consider the most significant barrier to decentralization? Is it worthwhile to invest in this space?
A: The biggest barrier is hidden centralization. Many systems claim to be decentralized while quietly introducing trusted intermediaries, validators, or governance chokepoints. That creates fragility.
Despite this, it is absolutely worth investing in the space, but selectively. The focus should be on infrastructure that removes trust assumptions rather than rebranding them, and that lowers costs instead of simply pushing them elsewhere. When decentralization is done correctly, it delivers both resilience and efficiency.
Q: Pact Swap operates in a competitive landscape where other platforms offer similar services. How does Pact Swap stand out?
A: Most cross-chain platforms address interoperability by introducing additional infrastructure, including bridges, validators, committees, wrapped assets, or extra consensus layers. Each addition increases complexity, cost, and risk. We did the opposite.
Pact Swap operates without bridges or external validators. We rely directly on the native consensus of each blockchain and enforce outcomes using collateralized smart contracts. That results in lower costs, fewer attack surfaces, and a system that behaves predictably under stress.
That design choice is why swaps can be up to 90% cheaper than existing solutions, why native assets can be used directly, and why risk is isolated per transaction rather than pooled across the system.
In short: fewer moving parts, less trust, and better economics.
Q: Pact Swap uses collateralized smart contracts on Coinweb to manage transactions and verify actions. How exactly does this work?
A: Each swap is governed by a smart contract that defines the rules upfront — one party posts collateral. The system observes what actually happens on the underlying blockchains. If both sides fulfill their obligations, the collateral is released. If one side fails, the collateral compensates the other.
There’s no discretionary decision-making, no intermediary, and no external enforcement. The outcome is purely a function of what happened on-chain.
Q: Without bridges or validators, isn’t Pact Swap more exposed if a smart contract fails?
A: Actually, the opposite. Bridges and validator networks introduce systemic risk because they aggregate trust across multiple parties. When they fail, they fail catastrophically. With Pact Swap, risk is isolated per transaction. Each swap is self-contained, collateralized, and independently verifiable.
There is no shared pool of funds and no centralized component that can be exploited to bring the system down. Even in adverse scenarios, the impact is contained.
Q: What’s in it for the client side? What practical applications do you see for a platform like Pact Swap?
A: For users, it’s simple: cheaper swaps, real native assets, and no custody risk.
That matters for retail users, institutions, wallets, merchants, payment gateways, and aggregators. Anywhere you need to move value across chains reliably, especially involving Bitcoin. Pact Swap becomes useful infrastructure rather than just a trading venue.
Q: Please provide a simple overview of making a cross-chain swap on Pact Swap.
A: A user connects their wallet, selects a pair, say native BTC to USDT, and confirms the trade. The system locks collateral, monitors both chains, and settles directly on each native network.
From the user’s perspective, it feels similar to a standard swap. Under the hood, enforcement and settlement happen without bridges, wrapped tokens, or intermediaries.
Behind the scenes, collateral is locked, transactions are monitored across both chains, and settlement is enforced automatically. The experience feels familiar, but the cost structure and trust assumptions are fundamentally different.
Q: Given the rapid pace of innovation in this space, when do you foresee decentralized exchanges surpassing centralized platforms in terms of product offerings and user experience?
A: Technically, that is already happening in certain areas. The remaining gap is largely economic and architectural.
Once decentralized systems can consistently offer CEX-level pricing, reliability, and asset coverage, without custody risk, the migration becomes inevitable. We are much closer to that inflection point than most people realize.
Q: Gauging client feedback and usage metrics, how is the traction so far?
A: The response has been very strong. Even as an MVP, we have processed thousands of swaps with minimal optimization and onboarded users quickly.
What matters most at this stage is not raw volume, but user behavior. When people experience materially lower costs and direct access to native assets, they come back. That is a strong indication that the model is effective.
Q: Tell us about the $PACT token and its utility. Is it still the token used for settling transaction fees?
A: $PACT is the governance and utility token of the ecosystem. It controls access to the fee pool, enables governance decisions, powers listings and affiliates, and aligns long-term incentives.
Importantly, transaction fees are not paid in $PACT. Instead, $PACT governs value capture rather than adding friction, which keeps the trading experience clean and competitive.
Q: Are there any other features you would like to talk about?
A: What excites me most is composability. Pact Swap is not just a destination; it is an infrastructure that other products can build on.
