How Does 1inch Work?
A swap aggregator that finds the best prices across dozens of decentralized exchanges, saving users money on every trade. It has raised $190M in funding with a $280M fully diluted valuation. Its B- grade reflects solid auditing and a strong track record, offset by a $5M exploit on deprecated code in March 2025 and a frontend supply chain attack in October 2024.
TVL
$3M
Sector
DEX
Risk Grade
B-
Value Grade
B-
Core Mechanisms
DEX/Aggregation
Multi-DEX pathfinding aggregator splitting trades across liquidity sources
Core aggregation router finds optimal swap paths across DEXs. V5.6 is the latest router version with 15+ audits from OpenZeppelin, ConsenSys Diligence, PeckShield, and ABDK.
DEX/Intent-Based
Fusion mode with professional resolvers executing intent-based swaps
Users sign intent orders filled by competing resolvers via Dutch auction. Intent/solver model now widely deployed across DeFi (CoW Protocol, UniswapX, etc.) with 3+ years of operation across multiple implementations.
MEV/Protection
MEV protection through resolver competition and private order flow
Fusion mode routes orders through professional resolvers rather than public mempool, reducing MEV extraction. Standard pattern in modern DEX aggregation.
DEX/Limit-Order
Gasless limit order protocol with off-chain signing
Users sign limit orders off-chain; resolvers fill them on-chain when conditions are met. Relies on resolver liveness for timely execution.
Bridge/Cross-Chain-Swap
NovelFusion+ cross-chain swap protocol via resolver network
Extends Fusion intent model across chains using resolver network for atomic cross-chain execution. Added Solana support in Q3 2025. Novel cross-chain intent architecture but adds settlement risk.
Governance/DAO
1inch DAO with staking-weighted governance via st1INCH
Standard veToken governance model where staked 1INCH (st1INCH) grants voting power for protocol parameters and fee distribution.
Token/Utility
1INCH token for governance, staking rewards, and resolver collateral
Multi-utility token used for governance voting, staking yield, and as collateral requirements for Fusion resolvers.
How the Pieces Interact
Cross-chain resolver execution adds settlement delay during which price movements can make resolved orders unprofitable, leading to resolver abandonment and failed swaps.
Routing through vulnerable third-party DEX contracts exposes users to exploits in protocols outside 1inch's audit scope. Chain-specific edge cases remain possible.
Interaction between limit orders and Fusion fills can create order collision where resolvers fill limit orders at stale prices during high volatility.
Resolver collusion or low competition could degrade MEV protection, allowing coordinated extractive behavior within the resolver set.
Governance manipulation of resolver collateral parameters could exclude competing resolvers, centralizing execution and enabling extractive pricing.
What Could Go Wrong
- March 2025 buffer overflow in deprecated Fusion v1 allowed $5M drain; October 2024 supply chain attack on Lottie Player library compromised frontend ($768K). Two separate incidents within 6 months indicate infrastructure security gaps.
- DEX aggregation routes through third-party protocols whose security is outside 1inch's control, inheriting risks from every liquidity source in the routing path.
- Fusion+ cross-chain intent execution depends on relayer availability; during volatile markets resolvers may abandon in-flight swaps, causing failed transactions.
Cross-Chain Resolver Abandonment Cascade
TailTrigger: ETH price drops 30%+ in under 4 hours while Fusion+ cross-chain swaps are in-flight, making resolved orders unprofitable across 3+ chains simultaneously
- 1.Sudden ETH crash causes cross-chain Fusion+ swap intents to become unprofitable for resolvers — Resolvers abandon in-flight cross-chain fills rather than take losses on price movements during settlement delay
- 2.Mass Fusion+ swap failures trigger user panic and migration to direct bridge/swap alternatives — Resolver reputation damage reduces resolver participation, lowering competition and increasing spreads
- 3.Reduced resolver competition degrades MEV protection quality — Remaining resolvers extract higher MEV from reduced competition, users receive worse execution prices
- 4.Third-party DEX liquidity sources used by aggregation router experience cascading liquidations — Aggregation routes through compromised liquidity sources return worse fills or partial fills
- 5.1inch volume drops as users lose confidence in execution quality — Resolver economics become unviable at lower volumes, further reducing participation in a reflexive spiral
Risk Profile at a Glance
Overall: B- (33/100)
Lower score = safer