The liquidity aggregator just beefed up its functionality with the Limit Order Protocol, a new tool that may have use cases beyond DEXes.
Today, decentralized exchange and liquidity aggregator 1inch announce the launch of the 1inch Limit Order Protocol. The new feature boasts 5 different security audits, and will enable users to buy or sell assets at specific price targets on Ethereum, BSC, and Polygon. The new feature will also be able to interact with smart contract logic, and be able to execute orders based on oracle data.
Limit orders were previously available to the DeFi ecosystem through a variety of protocols including Gelato and 0x, the latter which 1inch utilized. However, the team claims this new protocol will be more gas-efficient and secure in that it does not require admin keys, and that the protocol will add additional value to the ecosystem via composability with other protocols, such as Uniswap v3.
While the Protocol immediately adds to the functionality of the 1inch exchange, there are multiple possible use cases that external teams have been invited to explore.
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“On top of the protocol, complex, customized market making tools could be built,” reads the announcement. “For example, a tool of that kind would facilitate earning on a pair of assets pegged to the same currency, like USDC and DAI, which are both pegged to the US dollar.”
In addition to clear application in trading or DEX environments, 1inch co-founder Sergej Kunz pointed towards a possible lending use case.
“Lending protocol liquidations can be implemented by using our new protocol. When a position is ready to be liquidated, just a limit order can be placed by the lending protocol smart contract to offer arbitragers to exchange the collateral token for the debt token through a unified and highly efficient interface / protocol,” he said.
The Limit Order Protocol isn’t the only new release from 1inch. Yesterday, Curve announced the launch of a new algorithm that enables the protocol to create pools for volatile assets. 1inch was noted as an early partner of the new functionality, with 1inch’s liquidity aggregation having access to the Curve TriCrypto pool at launch.