1inch Introduces Fusion+ for Cross-Chain Swaps

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by Giorgi Kostiuk

2 years ago

Made with AI

  1. New Feature Overview
  2. How the New Cross-Chain Swap Feature Works
  3. Historical Context


    4. Decentralized exchange 1inch revealed a new feature called Fusion+ that enables users to swap their digital assets across different blockchains while retaining self-custody.

    New Feature Overview

    The Fusion+ feature combines both onchain and offchain liquidity to facilitate swaps. The DEX claims that the feature is protected against maximal extractable value (MEV) attacks. The feature utilizes atomic swap technology, designed to support 'all-or-nothing' transactions. If a swap fails, all the funds are returned to the sender. The swaps are also governed by smart contracts, verifying all the swap conditions. This means that transfers are trustless and do not require third-party approvals.

    How the New Cross-Chain Swap Feature Works

    1inch explained the functionality with an example. If a user holds POL tokens on the Polygon blockchain, they can exchange them for Ether (ETH) on the Ethereum blockchain. This allows users to exchange tokens on the same blockchain and on different networks. Users enter their order details into a form, which is then shared with 'resolvers'—professional traders competing to execute swaps at the best rates. A Dutch auction begins where the price decreases until accepted by a resolver. The resolver then places the POL tokens into an escrow contract on Polygon using the 1inch Fusion order, and deposits ETH into an escrow on Ethereum under the same conditions. Once the contracts are active, the resolver unlocks the ETH for the user and claims the POL tokens on Polygon. The process, while seemingly long, has a timelock protection feature that cancels swaps not completed within the set time, returning funds to the original owner.

    Historical Context

    1inch first revealed its solution to cross-chain interoperability issues on September 12, publishing a white paper on its intent-based cross-chain interoperability protocol. The interest in cross-chain solutions grew after Ethereum co-founder Vitalik Buterin announced plans to solve cross-chain interoperability issues for Ethereum layer-2s.

    The Fusion+ feature significantly enhances cross-chain swap capabilities in decentralized finance, offering users more secure and efficient ways to manage their assets.

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