Decentralized exchange 1inch has introduced a new upgrade that allows users to swap their crypto assets without giving up custody.
According to a Sept. 18 announcement, 1inch has deployed the next iteration of its 2022 Fusion upgrade for its Swap Engine known as Fusion+.
The new feature lets users swap cryptocurrencies across multiple blockchain networks but lets them retain full self-custody of their tokens. Further, it pools both on-chain and off-chain liquidity “to deliver convenient and secure swaps,” and will also offer “built-in protection” against maximal extractable value attacks.
Fusion+ is powered by atomic swap technology, ensuring cross-chain transactions remain secure, trustless, and efficient, while avoiding the vulnerabilities associated with traditional cross-chain bridges.
How it works
An Atomic swap is the process of exchanging cryptocurrencies between two different blockchains without the need for a trusted third-party intermediary, such as an exchange. The term “atomic” refers to the idea that the transaction either happens in its entirety or not at all.
Fusion+ leverages this “all-or-nothing” principle, meaning if any part of the transaction fails to meet the conditions or is incomplete, the assets are automatically returned to their original owners.
Further, the process is governed by smart contracts, which automatically enforce the terms of the swap. These contracts ensure that all preconditions, such as time limits or asset amounts, are met by both parties.
The swap process starts with a user sharing their order details with resolvers, who are professional traders who compete to execute swaps at the best rates through a Dutch auction model.
The resolver then locks the user’s tokens into an escrow contract and deposits the corresponding amount of the other token into a separate escrow contract, with both contracts containing the same secret hash and conditions.
Once both contracts are active on-chain, both parties reveal the cryptographic secret, the tokens are swapped, and the user receives the new asset. If either party fails to meet the set conditions, the assets are returned to the respective owners.
1inch initially disclosed its plans to introduce Fusion+ in a Sept. 12 blog where it cited issues like the security risks of centralized cross-chain bridges, inefficiencies in decentralized solutions, and the complexity of current cross-chain processes.
In related news, the DEX funded a crowd-testing platform earlier this year that allows beta testing of web3 products.
From: crypto.news
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