The integration of advanced cross-chain technologies in the decentralized finance (DeFi) space is revolutionizing how users interact with multiple blockchain networks. With the proliferation of new chains emerging regularly, the necessity for continuous bridging can expose users to additional risks and fees. 1inch, a prominent player in the DeFi ecosystem, has taken a significant step forward by incorporating cross-chain functionality into its Swap API as of September 2024.
This upgrade employs an atomic, intent-based execution model built on a novel Dutch auction methodology for rate sourcing. It not only enhances the efficiency of asset swaps but also features an automated recovery mechanism for cross-chain transactions should any issues arise during the swap process. By pooling liquidity from all integrated chains, 1inch ensures users receive the best possible rates, allowing them to transact safely and seamlessly across different networks. With gasless transactions, users enjoy reduced fees, streamlining their trading activities without the need to navigate cumbersome bridging processes.
The platform currently holds the title of the largest Ethereum Virtual Machine (EVM)-based decentralized exchange (DEX) aggregator, achieving an impressive $13 billion in trading volume over the past month, slightly ahead of its competitor, CowSwap. Within the first eight months of launching its cross-chain capability, 1inch has achieved a noteworthy $516 million in cross-chain trading volume. According to a recent report from Messari, 1inch has experienced impressive growth, with a quarter-over-quarter volume increase of 3.8%, indicating a steady rise in adoption.
With the recent addition of Solana compatibility launched on August 19, the potential for cross-chain feature usage continues to increase. This move positions 1inch to compete more effectively against Solana-based DEXs like Jupiter, which currently claims the highest DEX aggregator volumes in the DeFi sector, totaling $26 billion over the last month.
1inch’s innovative approach to cross-chain swaps is rooted in the intent-based methodology introduced in 2022. This allows users to request token fills and leverage competing resolvers to fulfill their orders. The competition among resolvers for transaction-generated fees leads to more favorable rates for users. As the liquidity pool expands across multiple chains, users benefit from significantly enhanced swap rate competition. Resolvers engage in a Dutch auction to fulfill the user’s swap intent, with the winning resolver executing the transaction at the quoted rate and taking care of gas payments, minimizing costs for the user.
All cross-chain transactions on the 1inch platform are designed to be gasless and incorporate protection against malicious sandwich attacks. The atomic approach guarantees that swap attempts either succeed in their entirety or fail without incurring costs for unsuccessful swaps or problematic partial-fills.
1inch’s cross-chain integration outshines many current solutions, which often suffer from high and volatile gas prices varying across networks and typically do not offer optimal swap rates. By merging liquidity across different blockchains, 1inch is making strides towards reconsolidating DeFi, a segment that has faced challenges due to liquidity fragmentation in recent years.
Users can access cross-chain swaps directly through the 1inch dApp interface. By simply selecting the source and destination networks, the process resembles that of traditional swaps while providing added functionality. For instance, a user could swap ETH on Ethereum for USDC on Solana by selecting the desired networks and connecting a compatible wallet, completing the transaction with a few approvals.
This cross-chain swap functionality is also available via the 1inch Swap API, enabling third-party developers to incorporate cross-chain support within their own applications. Detailed documentation is accessible through the 1inch developer portal, with prominent DeFi protocols like Infinex and wallet providers such as MetaMask and Ledger already integrating this technology.
As cross-chain swaps differentiate 1inch with its gasless and MEV-proof transaction frameworks, the potential for further DeFi integrations within the 1inch ecosystem rises. This progressive design presents users with an expansive array of liquidity offerings and lays the foundation for evolving into a comprehensive DeFi platform that unifies various financial markets.
