Atomic swaps

[practicaldreamer]

Probably an idiot question but I'll ask anyhow. Testing has been done to instantly swap litecoin and bitcoin without the use of an intermediary exchange, via Lightning.

How then is price/the exchange rate discovered ?

[LoyceV]

Both parties simply agree on a certain exchange rate, that's all.

Say you have 1 Bitcoin and I have 100 Litecoins, we agree to exchange them. We can do that right now, but one of us has to trust the other party, or we can involve a third party (escrow).
Atomic swaps replace the trust-part, the exchange rate is still up to us.