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1-inch Fusion upgrade

The 1 inch mesh is excited to announce the launch of Fusion, a major upgrade centered around the 1-inch Swap Engine – a unique combination of existing and new technologies aimed at improving the profitability and security of swaps via 1-inch.

The 1-inch exchange engine facilitates Fusion Mode, which allows DeFi users to place orders with a specified price and time period, without paying network fees. Meanwhile, the upgrade also includes major improvements to security, as well as updated stake contracts and tokenomics.

“This is a big step forward for the entire DeFi space,” says Sergey Kunz, 1-inch network co-founder. “Fusion makes 1-inch switching dramatically more cost-effective, as users don’t have to pay network fees, plus an extra layer of security is added that protects users from sandwich attacks. Our goal is to make users’ DeFi experience as smooth as ever before. Thanks to the 1-inch Swap Engine and Fusion mode, everyone gets an incredible UX with a high degree of security.”

“For years, people have trusted their crypto to centralized actors, some of whom turned out to be greedy and malicious, leading to massive losses of users’ funds,” he adds. “In contrast, 1inch now enables everyone to have top-level security for non-custodial swaps, which are performed in a completely permissionless and trustless manner, with users still in full control of their assets.”

1 inch replacement motor

Since its inception, 1inch’s goal has been to make DeFi a secure, user-friendly and profitable environment for everyone. Another achievement in that direction is the introduction of the 1-inch Swap Engine.

Based in part on the existing technology, including the 1inch Limit Order Protocol and the 1inch Aggregation Protocol, the 1inch Swap Engine is a decentralized trading and matching system that connects DeFi users with virtually unlimited liquidity – both centralized and decentralized – through professional market makers. Basically, 1inch Swap Engine offers users access to almost all available liquidity in the crypto market.

The 1-inch swap engine revolutionizes swap execution on decentralized exchanges, offering a completely new type of decentralized order matching approach that uses the Dutch auction model, while being based on market prices and taking price impact into account.

Orders are filled by solvers – professional market makers who pay applicable gas fees, while profiting from arbitrage trading. To become looser, they must stake 1INCH tokens and deposit a sufficient balance of 1INCH into the “fee bank” contract. In the initial stages, resolvers will not pay any fees, but later the 1-inch DAO may introduce a fee for resolvers. Top five solvers – based on the amount and period of 1INCH stakes – will have priority to fill orders.

Fusion mode

The 1-inch Swap Engine powers Fusion mode, which enables users to exchange tokens on different DEXs without paying any network fees, at the most favorable rates.

In Fusion mode, a user can choose from three options:

• Fast – With this option, the user is willing to accept a slightly less desirable rate to get the exchange done within the first blocks.
• Fair – With the Fair option, the user accepts a slightly longer order execution time in exchange for a more desirable rate. The starting rate is slightly higher than the market price, and there is a chance that the rate may change during the execution of the transaction to become more favorable to the user.
• Auction – With the auction option, the user agrees to wait for the maximum expiration time (10 min) to receive the most favorable price for their trade. The starting rate is 1% better than the market, and this option is particularly suitable for exchanging large amounts of assets, and taking advantage of arbitrage opportunities.

And since the Swap Engine-powered Fusion mode is built on top of 1inch’s Aggregation Protocol and Limit Order Protocol, sufficient liquidity for swaps is always guaranteed.

Initially, Fusion mode will be active on Ethereum, Polygon and BNB Chain. Gradually, it will be activated on all networks where 1 inch is available.

Protection against MEV

When trading on decentralized exchanges, users can potentially fall victim to Maximum Extractable Value (MEV) strategies. This can lead to significant losses of users’ funds. In 2022 alone, DEX users lost the equivalent of over $800 million to sandwich attacks, the most common form of MEV.

In Fusion mode, professional traders filling users’ orders use the most sophisticated and effective ways to protect users’ trades from MEV. So users simply don’t have to worry about MEV.

With the Fusion release, exchanging tokens directly on DEXs or on aggregators that do not offer MEV protection will no longer be a viable option.

Network governance and tokenomics

1inch Network’s governance and tokenomics have also been significantly revamped. Under the new governance system, users can stake their 1INCH tokens for a period of one month to two years.

Users who stake 1INCH tokens receive Unicorn Power, which can be used for multiple purposes.

Unicorn Power can be used by 1INCH actors to participate in network governance, it can be delegated to other users and to resolvers – in exchange for rewards from resolver incentive programs. As solvers compete to fill the most lucrative orders, there will be prioritization based on solvers’ delegated Unicorn Power.

Additionally, by staking their tokens, users contribute to the overall stability of the network, as malicious actors will not be able to attack the 1-inch DAO. The new system will not allow token staking for periods shorter than one month, and Unicorn Power received for short-term staking will not be sufficient to influence DAO decisions.

Meanwhile, 1inch DAO can also create incentives for 1INCH stakers. The DAO’s decision allowed fees collected from solvers to be distributed among 1INCH players, based on their commitment to the network and Unicorn Power.

1-inch resolver incentive program

Starting December 24th, the 1inch Resolver Incentive Program will run, where resolvers will be reimbursed for gas spent filling users’ orders in Fusion mode. Under this program, the 1inch Foundation will distribute 10 million 1INCH tokens as gas refunds. Loosers filling Fusion orders, as well as those using the 1-inch Aggregation Protocol, will be eligible for reimbursement. The maximum monthly refund size is 1 million 1INCH tokens per resolver.

As solvers will fill orders without trying to minimize gas costs, they will offer better exchange rates to users. As a result, ordinary users will be the main beneficiaries of the program. Resolvers will collect the gas refund for the last week of December 2022 and for January 2023 in early February 2023. The program will run until the entire 10 million 1INCH fund is used.

The existing gas refund program will run until 31 December 2022.

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The Fusion upgrade takes users’ DeFi experience to a whole new level, but the journey is far from over. The 1-inch network will not stop until trading on DEXs becomes as user-friendly and flexible as on centralized platforms, but much more secure, profitable and efficient!

Stay tuned for more 1inch Networks news and updates!

**This article is a press release.**

What is 1 inch:

1inch is a decentralized exchange (DEX) aggregator that provides the best prices by discovering the most efficient exchange routes across all leading DEXs. 1inch operates on multiple networks including Ethereum, BNB Chain, Polygon and Optimistic Ethereum.

Where do you find 1 inch:‍

Website | Twitter | Medium | Discord | Telegram |