Originally published on: November 26, 2024
Navigating the decentralized finance (DeFi) landscape just got a lot simpler with 1inch’s latest innovation – Fusion+. This upgrade promises to streamline crosschain swaps by pooling liquidity from various corners of the Web3 ecosystem.
Crosschain transactions have long been a sticking point in the DeFi arena. Moving assets between different blockchain networks, such as Ethereum and Polygon, has historically involved convoluted processes, hefty fees, and frustrating delays. This friction hampers the seamless flow of assets within DeFi, putting constraints on opportunities for investors and traders.
While conventional solutions rely on centralized bridges to facilitate crosschain swaps, these come with a host of security vulnerabilities. These bridges have been frequent targets for hacks, resulting in staggering losses of over $3.3 billion in crypto assets over two years.
Enter Fusion+. By doing away with the need for conventional bridges, 1inch is paving the way for a more efficient and secure crosschain solution. Users can dive into the Fusion+ experience right away on the 1inch decentralized application (DApp) and 1inch Wallet.
Since its beta launch in September, Fusion+ has already processed millions of dollars in trading volume, showcasing its potential to revolutionize the DeFi landscape. Here are some standout features of this game-changing platform:
Fusion+ builds on the success of the original Fusion solution by leveraging atomic swap technology for seamless crosschain swaps. This user-friendly process enables token swaps across different blockchains without the involvement of centralized bridges or third-party intermediaries.
Here’s how it works: Users select the tokens they wish to exchange and set a minimum acceptable return. This order is then transmitted to a network of professional market makers known as resolvers. A Dutch auction ensues, where resolvers compete to fulfill the order at the most favorable rate. This competitive process ensures users get the best exchange rates without the hassle of complex procedures.
Once a resolver accepts the order, the transaction is secured by locking the user’s original tokens in an escrow on the source blockchain and the desired tokens in an escrow on the destination blockchain. These escrows utilize cryptographic secrets and time-based locks to ensure a safe and trustless exchange.
Upon revealing the cryptographic secret, users gain access to their new tokens while the resolver claims the original tokens. Should the swap not be completed within the specified timeframe, the contracts are automatically canceled, and funds are returned to their rightful owners, safeguarding assets for all parties involved.
With Fusion+, 1inch is not just simplifying crosschain swaps but also addressing key barriers to DeFi adoption. By eliminating reliance on third parties and centralized bridges, the platform is enhancing security and building user trust. The approach taken by Fusion+ in promoting crosschain interoperability could set a new standard for the industry, fostering a more integrated and secure DeFi ecosystem.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are encouraged to conduct their own research before making any decisions.