1inch Launches New Cross-chain Feature
18 Sep, 2024 ● Crypto News
Decentralized exchange (DEX) 1inch has introduced a new feature called "Fusion+" that allows users to swap digital assets across different blockchains while maintaining self-custody of their assets.
The Fusion+ feature combines both on-chain and off-chain liquidity to facilitate swaps. The DEX claims that this feature includes built-in protection against maximal extractable value (MEV) attacks.
Powered by atomic swap technology, Fusion+ is designed to support "all-or-nothing" transactions. According to 1inch, if a swap fails, all the funds are returned to the sender, ensuring no partial transactions.
The swaps are governed by smart contracts, which verify all the swap conditions. This trustless system means that the transfers do not require third-party approvals.
In the world of decentralized finance (DeFi), cross-chain transfers typically require bridges, which allow users to move assets from one blockchain to another. However, these bridges have been prone to vulnerabilities, resulting in significant losses.
1inch's new feature enables cross-chain swaps without relying on bridges.
To explain how the swap works, 1inch provided an example: if a user holds POL tokens on Polygon, they can exchange them for Ether on the Ethereum blockchain. This allows users to exchange tokens not just within the same blockchain but also across different networks.
Users simply need to enter their order details in a form, which is then shared with "resolvers." 1inch describes these resolvers as professional traders who compete to execute swaps at the most favorable rates.
A Dutch auction follows, where the price decreases until a resolver accepts the order. The resolver then puts the POL tokens into an escrow contract on Polygon using the 1inch Fusion order.
Simultaneously, they deposit ETH into an escrow on Ethereum under the same conditions.
Once the contracts are live on-chain, the resolver unlocks the ETH for the user and claims the POL tokens on the Polygon blockchain.
Although the process may seem lengthy, it includes a timelock protection feature. If a swap is not completed within the designated time, the feature cancels the swap, returning the funds to the original owner.
1inch first unveiled details of its solution to cross-chain interoperability issues on September 12, when it published a white paper on the intent-based, cross-chain interoperability protocol it was developing.
The release of the white paper coincided with growing interest in cross-chain solutions, particularly after Ethereum co-founder Vitalik Buterin announced plans to address cross-chain interoperability between Ethereum layer-2s.
Sources:
https://cointelegraph.com/news/1inch-cross-chain-swap-feature-fusion
