Decentralized exchange 1inch announced its expansion to the Optimistic layer-XNUMX network to improve transaction speeds and reduce gas costs.
Implementing 1inch in the second layer solution of Ethereum Optimistic (OΞ) will help the decentralized exchange (DEX) to substantially increase their transaction speeds and reduce gas fees, in order to provide a more optimal and efficient service to their users, while improving their competitiveness in the market.
1inch operates as a DEX aggregator within the decentralized finance ecosystem (DeFi), helping users find the best prices and rates when exchanging tokens within this digital ecosystem. Currently, this DeFi protocol ranks 3rd by number of active users and 14th among the top 15 DEXs in the ecosystem by total value locked, with liquidity close to $50 million, as shown by the data of DeFi Pulse; while in terms of gas consumption, 1inch is the 9th most used protocol in the DeFi ecosystem.
Implementing the DEX on Ethereum's Optimistic “will facilitate a dramatic increase in the speed of transactions” and will drive usage and demand for the protocol, the protocol developers said, highlighting that Optimistic is one of the most promising scalability solutions available in the crypto industry today.
Essentially, what Optimistic does is use rollups to bundle and compress a group of transactions off the Ethereum main chain, thereby reducing gas costs and increasing the number of transactions to be processed per second. The final results of the entire set of transactions are then added to a block on the blockchain, providing immutable evidence that those transactions were executed on the network.
It may interest you: 1inch Becomes the Most Affordable and Accessible DeFi DEX
More speed, less gas fees
While in the initial phase of 1inch’s implementation on Optimistic, developers expect an average throughput of 0,6 transactions per second (TPS), which is the security limitation currently in place for Optimistic in its alpha version, as testing is conducted and the infrastructure is verified and optimized, transactions on the Optimistic network will be carried out much more quickly and efficiently, significantly reducing gas costs and exponentially increasing protocol throughput. The network developers expect that when development is complete, Optimistic will be able to verify up to 2.000 transactions per second (TPS).
Jing Wang, co-founder of Optimism, said he is excited to work with the 1inch developer team to improve transaction speeds and deliver high performance to DEX users.
1inch has already been deployed on other blockchain networks in the industry, such as Polygon, which is also a second-layer scaling solution for Ethereum, and on the BSC. In both implementations, the developers are looking to improve the protocol’s performance to cope with the Ethereum network’s gas fees and increase transaction speeds to meet growing user demand.
Competitiveness in DeFi
Currently, DEXs in DeFi are moving value for more than 86.000 million on average per month, driven by the high demand of users who are increasingly aware of their financial privacy needs. Due to this impressive growth, decentralized exchanges are waging a fierce battle to lead the decentralized ecosystem and gain as many users as possible.
In addition to expanding into Optimistic, something that also happened Uniswap In the middle of last month, 1inch is developing additional improvements that will benefit the DEX users and improve its competitiveness against other protocols on the market. For example, the protocol will launch a feature that will allow users to pay for gas using any token, instead of just ethers. Also, in March it announced the launch of the third version of its Aggregation Protocol, with which it also seeks to optimize and reduce gas consumption and offer cheaper commission rates than other DEXs.
In its future plans, 1inch could expand to Solana and Avalanche, in addition to other layer-two solutions such as Arbitrum and zkSync.
Uniswap is currently the most used DEX and AMM in DeFi, with over 2 million active users according to data from Dune Analytics. However, an ERC-20 token transaction can reach $12 currently within this DEX, while gas fees for token swaps are close to $XNUMX. $35, according to EtherScan.
Continue reading: Optimistic Rollups, the imminent solution to scale Ethereum “100 times”
