1inch Fusion 2.0 revolutionizes swap efficiency for users

1inch Network
1inch Network
Published in
5 min readMay 9, 2024

--

The latest release of 1inch’s intent-based innovative solution significantly enhances users’ swap execution efficiency and speed.

1inch is thrilled to announce the release of 1inch Fusion 2.0, which facilitates significant savings on crypto swaps.

A breakthrough swap solution

Launched in December 2022, 1inch Fusion enables users to swap tokens on various networks without paying gas fees, while enjoying access to liquidity across the entire crypto space and protection from maximal extractable value (MEV). All Fusion swaps are executed by resolvers — professional and verified traders competing with each other for the right to execute swaps and therefore offering users the most favorable rates.

Since the launch of 1inch Fusion, nearly 20 resolvers have joined, sourcing liquidity from across the entire crypto market and executing swaps for a total of over $25 bln.

1inch Fusion exemplifies an intent-based approach, where users declare a target they wish to achieve, and professional market players execute it using the most suitable strategies. With 1inch Fusion, a user states their intent to make a swap, and the protocol ensures the best execution by resolvers.

The partial fill functionality enables large swaps to be executed even more efficiently, at rates better than current network market, as different resolvers fill different parts of the order. The intent-based approach ensures that the user does not pay any gas fees even if their order expires.

In the chart below, we illustrate a swap of 5,436 WETH to USDC. Within 1 minute, several resolvers executed 11 partial fills, ranging from 8.5% to 30.1% of the total swap amount in each block. As a result, the user received 40,524 USDC more than if they had swapped at the current market rate*.

Chart 1. A user swapping 5,436 WETH to USDC receives 40,524 USDC more than the market rate due to 1inch Fusion’s Dutch auction model and partial fill functionality.

In line with our goal of building a compliant market-making environment, resolvers undergo a due diligence process that includes a KYC procedure, a sanction and policy check and constant address screening for AML.

Enhancing swap efficiency

As we continually strive to enhance the efficiency of decentralized swap settlement, the second version of 1inch Fusion introduced significant improvements, enabling even greater efficiency in swaps than before. The settlement contract layer was removed and replaced with the lightweight settlement extension. As a result, users interact with resolvers directly and therefore get better prices on token swaps.

In accordance with 1inch internal tests, order settlement in Fusion 2.0 is 10%-35% (depending on the token and amount) cheaper than it was in the previous version. In comparison to competitors’ offerings, 1inch Fusion 2.0 is roughly 10% more efficient, which enables resolvers to offer users considerably better swap rates.

Meanwhile, this improved efficiency also benefits users swapping smaller amounts.

Faster execution, lower expiration probability

Another improvement contributes to better swap prices, while also speeding up transactions — in line with users’ requests — and making order expiration less likely. In 1inch Fusion 2.0, the price curve is adjusted based on market gas prices. Previously, a change in the gas costs between signing a transaction and its execution could result in an order expiration due to gas price volatility. Now, the gas price is immediately taken into account and the price curve is adjusted based on market conditions, if necessary. As a result, orders are executed 75% faster and the probability of an order expiration is lower.

The price curve adjustment feature is a unique piece of tech developed by 1inch and we are excited to bring it to the market. This is how it works.

The chart below compares the standard auction price curve and its improved version that considers a possible change in the market gas price (baseFee) between the creation of an order and its execution by a resolver. During the time gap between order creation and order execution — which is required as the user needs to open their wallet and sign the transaction — the market gas price could either increase or decrease. In a standard auction, if baseFee increases, the resolver won’t be able to immediately fulfill the order due to the high gas price, and the user might have to wait for a long time for the order to be executed. If baseFee declines, the resolver will collect the difference in the gas costs.

The adjusted price curve in Fusion 2.0 solves this. In Possible execution case 1, baseFee declined, and the adjusted price curve reacted by increasing the number of tokens the user will receive upon the order execution. In Possible execution case 2, baseFee increased, prompting the adjusted price curve to correct the execution costs. As a result, the user won’t have to wait until the resolver is interested in fulfilling the order due to a decline in baseFee or a Dutch auction price decline.

Chart 2. Fusion 2.0’s adjusted price curve reacts to market conditions and corrects the execution price accordingly — to facilitate faster order execution.

Utilize innovative 1inch tech to your advantage

Thanks to the upgraded Fusion SDK — an order constructor and interface for interaction with the Fusion API — the integration of 1inch Fusion has become totally seamless.

Fusion 2.0 is already available in the 1inch dApp. Use it and enjoy the most efficient swaps in the market! For guidance on using 1inch Fusion, refer to this FAQ.

Meanwhile, you can also use 1inch Fusion in your project to enhance swap efficiency. The 1inch Fusion API is available on the 1inch Developer Portal. If you are interested in integrating the Fusion API, please, reach out to us.

Try out 1inch Fusion right now!

* The market rate is the rate which the user gets if they swap the entire amount at once at the current market price. Large swaps at the market rate are vulnerable to price impact.

--

--

1inch Network
1inch Network

A distributed network for decentralized protocols enabling the most lucrative, fastest and protected operations in DeFi.