How Does TrustedVolumes Work?
TrustedVolumes is a professional crypto market maker that fills swap orders for DeFi users through 1inch. In May 2026, it lost $6.7M after hackers found four critical bugs in its code — including a function that let anyone register themselves as an authorized signer, with no access control whatsoever. There was no security audit before deployment. Funds recovery through bounty negotiation is uncertain.
TVL
—
Sector
DEX
Risk Grade
D+
Value Grade
D
Core Mechanisms
Request for Quote (RFQ) Swap
NovelOff-chain quoted, on-chain settled via signed orders
TrustedVolumes provides RFQ-based swap execution: it quotes prices off-chain and fulfills orders on-chain by signing authorization messages. As a 1inch Fusion resolver, it fills user swap orders from its own inventory vault. Unlike AMMs, pricing is determined by the market maker — introducing asymmetric information risk.
Inventory Vault with ERC-20 Approvals
Unlimited ERC-20 approval vault controlled by RFQ proxy
The protocol holds inventory capital in a vault that grants unlimited ERC-20 token approvals to the RFQ proxy contract. This pattern is common in market making but concentrates all capital risk in the proxy's access control logic. A single authorization bypass drains the entire vault.
Cryptographic Signature Validation
ERC-1271 signer registry with self-registration exploit surface
Order validity is enforced by verifying signatures from an authorized signer registry. The critical flaw: the registerAllowedOrderSigner() function had no access control, letting anyone register themselves as a trusted signer. Combined with the authorization-source mismatch (receiver vs inventory fields), an attacker could authorize drain orders while using the protocol's own vault as the fund source.
How the Pieces Interact
Any address can register itself as an authorized signer via registerAllowedOrderSigner(). The signature validation then accepts orders signed by the attacker as legitimate. DEMONSTRATED: root cause of the $6.7M May 2026 exploit.
Authorization check used order.receiver for signer validation but token pull used order.inventory for fund sourcing. Attacker could point inventory to TrustedVolumes' vault while controlling the receiver, enabling drain of unrelated funds through a 'valid' order.
Fill-status was read from one storage slot but written to a different slot, meaning orders were never actually marked as filled. The same crafted order could be replayed multiple times until the vault was drained.
TrustedVolumes processes real user swap orders routed through 1inch Fusion. During the exploit window, legitimate user orders may have been affected. 1inch confirmed its core protocol was unaffected, but resolver-level failures impact end-user trade execution reliability.
What Could Go Wrong
- May 2026: $6.7M drained via four compounding critical vulnerabilities in the RFQ proxy — unguarded signer registration, authorization-source mismatch, broken replay protection, and unlimited ERC-20 approvals
- No public smart contract audits before the exploit — fundamental access control flaws would have been caught by any standard audit
- Same attacker previously exploited the 1inch Fusion V1 in March 2025 ($5M); TrustedVolumes failed to apply lessons from that industry-wide incident
- The unguarded registerAllowedOrderSigner() function was publicly callable with zero access restrictions — privileged function exposed as public by design
- Recovery status uncertain: TrustedVolumes is in bounty negotiations with the attacker; full fund recovery not confirmed as of May 2026
Unpatched Codebase Enables Second Drain
ElevatedTrigger: Protocol re-deploys vault with similar unaudited RFQ proxy before completing comprehensive security review
- 1.TrustedVolumes reactivates vault to resume market making operations — New vault holds fresh inventory capital ($5M-$10M range)
- 2.Attacker or copycat identifies residual vulnerabilities in redeployed code — Similar attack pattern replayed using access control flaws or new variants
- 3.Second exploit drains reactivated vault — Further capital loss; counterparty confidence in 1inch Fusion resolver ecosystem collapses
- 4.1inch removes TrustedVolumes as authorized resolver — Business model failure; no path to recovery
Risk Profile at a Glance
Overall: D+ (58/100)
Lower score = safer