The 1inch team has released the third iteration of its Aggregation Protocol, a tool that routes trade orders across all decentralized exchanges on Ethereum and Binance Smart Chain.
It has been reported that the Aggregation Protocol calculates the most profitable trade for a given token and size of the order, potentially splitting a large order into several chunks across several decentralized exchanges.
However, previously, the tool was mostly useful for wealthy traders for whom slippage was an important factor when trading in decentralized finance. The system consumed more gas than using a DEX protocol directly, which meant that the product was unattractive for smaller traders.
Could the V3 of @1inchExchange be a game-changer for mitigating Ethereum gas fees? The latest iteration is adding in trade optimizations to split orders up into chunks across several DEXs. https://t.co/8zvP7cBkuk — Cointelegraph (@Cointelegraph) March 16, 2021
The report said that the V3 release introduces gas optimizations that the team claims make the protocol cheaper than using either Uniswap or 0x directly. In tests conducted by the team, the 1inch V3 aggregator was about 10% cheaper in terms of gas than the same trades done via Uniswap, and about 5% cheaper than on 0x. Compared with 1inch V2, gas costs decreased by up to 30%.
Anton Bukov, the Chief Technology Officer of 1inch, said that Uniswap is the cheapest protocol to use in terms of gas fees. This resulted in many copycats appearing on Ethereum and other blockchains, the most notable of which is SushiSwap.
He added:
“Our router is more effective than theirs. The same goes for SushiSwap and other forks.”
Likewise, Bukov said that 1inch’s router merely replaces Uniswap’s while using the same pools, which explains how an aggregator can be cheaper than direct use. The higher effectiveness of Uniswap has been the result of targeted optimizations.
Thus, Sergej Kunz, the CEO of 1inch, said:
“We just optimize where we can, sweeping the dust, so to speak, after the other DeFi guys.”
Source: Cointelegraph