Decentralized software development organization 1inch Labs introduced an updated version of its price route discovery algorithm, Pathfinder, designed to provide users and integrators with swap rates improved by up to 6.5%, enhancing speed and efficiency.
The upgraded algorithm identifies more optimal paths more quickly, increasing the profitability and effectiveness of classic swaps. By streamlining certain swap steps and optimizing the use of concentrated liquidity, the new Pathfinder enhances gas cost efficiency.
Additionally, the 1inch decentralized application now includes improved visualizations that offer clearer insights into token flows and transaction execution, simplifying the swap process. Testing by the 1inch Labs analytics team, based on over 30,000 real-time trades, confirms the enhanced swap rates.
Pathfinder aims to address major obstacles in the Web3 ecosystem, particularly the challenge of high gas fees, which have limited broader retail participation in decentralized finance (DeFi). Comparative data highlights the improvements in swap rates relative to previous Pathfinder versions and competing platforms across various trade sizes and tokens.
“The new Pathfinder enables users and integrators to maximize the value of every trade, offering up to 6.5% better swap rates and cutting gas costs even further,” said Sergej Kunz, co-founder of 1inch, in a written statement. “This upgrade sets a new standard and drives the industry towards true adoption, improving the experience for all,” he added.
Enhancements And Algorithm Mechanism Of The Updated Pathfinder
The updated Pathfinder algorithm enhances trading efficiency by maximizing returns through the combination of multiple swap paths, resulting in better value for each trade. It improves liquidity efficiency by dividing trade volumes into smaller segments and integrating various routes, thereby accessing pools more effectively and utilizing concentrated liquidity to achieve optimal exchanges.
This approach also broadens access to diverse liquidity pools, distributing volume strategically to secure more favorable rates. Additionally, the algorithm increases gas efficiency by consolidating swap steps, which reduces overall transaction costs. For example, in a swap from USDC to APE, previous algorithms separated the transaction across multiple paths without reusing the same market for intermediate tokens, leading to higher gas fees and less profitable trades.
The new method merges these intermediate tokens before completing the swap, eliminating unnecessary steps and lowering gas consumption while optimizing trade rates. This improvement addresses a key barrier to widespread cryptocurrency adoption by offering more affordable and efficient swaps. The enhanced algorithm is now integrated into the 1inch decentralized application and accessible via application programming interface (API) on the 1inch Developer Portal, delivering improved routing, faster transactions, and better support for developers.
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Source: Mpost.io
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