The popular DeFi platform has unveiled a feature that will improve token swapping. Fusion mode will make trades on 1inch highly-efficient, cost-effective and secure for users who are mostly dependent on centralised exchanges.
Decentralised finance (DeFi) lending aggregator 1inch has announced the launch of ‘Fusion Mode’, a major upgrade to the Swap Engine that aims to improve “profitability and security” while trading crypto assets on the platform.
The Fusion mode, which exists within 1inch’s Swap Engine, allows DeFi users to place orders with a specified price and time range, while not having to pay any network “gas” fees. Additionally, the upgrade brings other improvements to the 1inch protocol, such as security, staking, and governance.
“This is a huge step forward for the entire DeFi space. Fusion makes swaps on 1 inch dramatically more cost-efficient, as users won’t have to pay network fees, plus, an extra layer of security is added, protecting users from sandwich attacks. Our aim is to make users’ DeFi experience as smooth as never before. Thanks to the 1inch Swap Engine and Fusion, now everyone gets incredible UX with a high degree of security,” said Sergej Kunz, co-founder of 1inch Network.
The founder added that crypto investors have lost a lot of their funds by trusting centralised actors, who sometimes turned out to be greedy and malicious. Cue, FTX and Celsius. On the other hand, 1inch allows customers to have full control over their assets while conducting non-custodial token exchanges. Swaps are performed on the platform in a permissionless and trustless manner, guaranteeing high-security.
1inch’s goal has always been to make DeFi a more secure, user-friendly and profitable environment, which is achieved via the 1inch Swap Engine. The decentralised trading and matching system which leverages existing tech, including the 1inch Limit Order Protocol and the 1inch Aggregation Protocol, gives users unlimited access to all liquidity that is available in the crypto market – on both centralised and decentralised exchanges – through professional market makers. This system is based on the Dutch auction model.
Token swap orders are placed by resolvers, who are professional market makers that pay applicable gas fees for transactions, while profiting from arbitrage trading over different exchanges.
The 1inch Swap Engine powers the Fusion mode, which enables users to exchange tokens on various DEXs (decentralised exchanges) without having to pay any network charges. The feature also allows them to select a rate and an order execution time at which they would like to process transactions. There are three options for users to choose from in Fusion mode; ‘Fast’ which allows users to execute a swap within the first few blocks when the rates are usually slightly higher than the market price; ‘Fair’ where they agree to a bit longer execution time in exchange for a more desirable rate; and ‘Auction’, where in order to receive the most favourable rate for their trade, users agree to wait for a maximum expiration time of 10 minutes.
At launch, Fusion mode will be available for tokens deployed on Ethereum (ETH), Polygon (MATIC) and Binance Smart Chain (BNB). As time goes by, the feature will be activated on all networks that support 1inch.
Moreover, Fusion protects users from being victims of Maximum Extractable Value (MEV), which causes substantial losses to their funds. MEV refers to the maximum value that can be extracted from block production by exchanges in addition to standard block rewards and gas fees. This year alone, DEX users have lost over $800 million to sandwich attacks, the most common form of MEV. With Fusion mode, swapping tokens directly on DEXs or on aggregators with no MEV protection will no longer be a viable option. Also, resolvers who fill orders will use the most sophisticated and efficient ways to protect users’ trades from MEV.
Alongside the Swap Engine upgrade, 1inch has also brought changes to its governance and tokenomics. Under the new system, users can now stake their 1INCH tokens for a period ranging from one month to a maximum of two years. Stakers will receive Unicorn Power, which allows them to become part of the 1inch DAO (decentralised autonomous organisation) and participate in network governance. Unicorn Power can also be delegated by stakers to other users and resolvers – in exchange for rewards from resolver incentive programs.
To become resolvers, users will need to stake 1INCH and deposit a sufficient amount of the tokens into a “feebank” contract – a fund used to pay network gas fees on the users’ behalf. Resolvers will be ranked based on the amount and for how long they’ve staked 1INCH tokens. The platform also plans to launch the 1inch Resolver Incentive Program, which will help resolvers get a refund on the gas they spent filling customer orders in Fusion mode.
At the time of writing, 1INCH is trading at $0.40. With 769 million tokens currently in circulation, 1inch has a total market valuation of $309 million. The 1inch DeFi Wallet is available to download for free on Google PlayStore and Apple App Store.