According to Cointelegraph, 1inch Network has introduced a new white paper addressing the challenges of cross-chain interoperability in the cryptocurrency sector. The decentralized finance platform is developing the 1inch Fusion Atomic Swap Protocol, which merges the security of traditional atomic swaps with the simplicity of an intent-based approach. Anton Bukov, co-founder of 1inch, highlighted that the protocol's main advantage lies in its frictionless user experience combined with advanced technology.
Bukov explained that the protocol is built on three core principles: being fully trustless, offering protocol extensibility without centralized authorities, and utilizing Dutch auctions alongside resolver competition for optimal execution. The new swap protocol aims to facilitate seamless cross-chain swaps across both layer-1 (L1) and layer-2 (L2) blockchain networks, effectively eliminating network boundaries. Bukov added that resolvers could leverage their services through other centralized bridges, aggregating cross-chain liquidity and further enhancing the DeFi ecosystem.
The release of the white paper coincides with growing interest in cross-chain interoperability solutions. Earlier in August, Ethereum co-founder Vitalik Buterin announced plans to address cross-chain interoperability between Ethereum L2s. Blockchain interoperability remains a significant challenge, as L1 blockchains are isolated systems with no means of communication, necessitating cross-chain solutions. However, the development of cross-chain infrastructure is complex and can lead to vulnerabilities in third-party protocols.
1inch Network is the largest decentralized exchange (DEX) aggregator on Ethereum, with over $4 million in total value locked (TVL) and over $189 million in total funds raised, according to DefiLlama data. The white paper's release comes more than two years after Buterin raised concerns about cross-chain bridges due to centralization issues. In a January 2022 Reddit post, Buterin warned that 51% attacks on cross-chain bridges could become more common as their usage increases, making large pools more likely to coordinate attacks.
Some industry experts envision a future without bridges. For example, Polygon is developing interoperability through its AggLayer, an aggregation layer similar to a cross-chain interoperability protocol aimed at connecting blockchain networks. Marc Boiron, CEO of Polygon Labs, stated that AggLayer aims to connect all blockchain spaces, including layer-1 networks like Ethereum and Solana.
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