The 1-inch team has launched the third iteration of its aggregation log, a tool that routes trade orders across all of the decentralized exchanges on Ethereum and, more recently, on Binance Smart Chain.
The aggregation log calculates the most profitable trade for a given token and the size of the order, with a large order potentially being broken up into multiple blocks on multiple decentralized exchanges. Previously, The tool was most useful for wealthy traders for whom slip was an important factor when trading DeFi. The system was consuming more gas than using a DEX protocol directly, which meant the product was not attractive to smaller traders.
Version 3 introduces gas optimizations which, according to the team, make the protocol cheaper than using Uniswap or 0x directly. In tests conducted by the team, the 1-inch V3 aggregator was about 10% cheaper in terms of gas than the same operations done through Uniswap and about 5% cheaper than in 0x. Compared to 1 inch V2, the gas costs were reduced by up to 30%.
Anton Bukov, chief technology officer at 1inch, told Cointelegraph that Uniswap is the cheapest protocol for gas prices. This led to the appearance of many copycats on Ethereum and other blockchains, the most famous of which is SushiSwap. However, it appears that Uniswap’s commercial router is not the most efficient there can be, and Bukov noted:
Our router is more efficient than yours. The same applies to SushiSwap and other forks. “
So the 1 inch router only replaces the Uniswap router while using the same groups. This explains how an aggregator can be cheaper than using it directly. The greater effectiveness of Uniswap is the result of specific optimizations, said Bukov. Sergej Kunz, CEO of 1inch, added: “We only optimize where we can and sweep the dust after the other guys at DeFi, so to speak.” This wouldn’t be the first time 1 inch Uniswap has been targeted in its inventory as a “vampire air drop” has recently been introduced for active Uniswap users. In this case, however, targeting makes the most technical sense. Because Uniswap’s code base is so popular, optimization offers the best performance and the most liquidity.
The new version 3 has already been deployed and replaces the previous iteration which will continue to be available for use. Switching platforms would require setting up new token allocations that would cost gas. Yet, It seems that migration could pay off quickly.