The aggregator $1INCH updated the Pathfinder algorithm.
This will significantly improve rates for swaps.
The new algorithm lays out more efficient routes by merging them.
1inch Labs has introduced a new version of the price routing algorithm Pathfinder, which improves swap rates by 6.5%.
According to the release, the new algorithm finds more efficient paths and does so much faster. As the developers explained, this version of Pathfinder optimizes gas spending by consolidating some stages of the swap and maximizing the use of concentrated liquidity.
Additionally, the design of the aggregator dApp has undergone some changes, making the swap process intuitive. All of this together has improved rates by up to 6.5%, as confirmed by a sample of over 30,000 real-time transactions conducted using the new algorithm.
As noted by 1inch, Pathfinder addresses several key issues in #defi , including high gas fees that prevent retail users from exploring this space.
"The new Pathfinder enables users and integrators to maximize the value of each transaction by offering up to 6.5% better swap rates and further reducing gas costs. This update sets a new standard and drives the industry towards real adoption, enhancing the experience for everyone," said co-founder Sergey Kuntz.
The new version of the algorithm allows for:
maximize profit: ensures better rates by using multiple routes for swaps, increasing the value of each transaction;
improve liquidity efficiency: the algorithm splits the volume and mixes routes. It makes better use of pools by extracting volume from concentrated liquidity for the most optimal swaps;
provide broader access to liquidity: the algorithm ensures deeper access to a variety of liquidity pools and volume distribution to obtain better rates where it matters most;
use gas most efficiently: merging routes allows optimal gas spending on each swap.
The mechanism of the new algorithm's operation
As an example, 1inch cited the swap $USDC for token $APE . With the old version of the algorithm, this process would look like:
In this case, the same market could not be used for both paths, leading to increased gas expenses. This problem can be solved by merging routes, as seen in the diagram below:
By eliminating unnecessary steps, the new version of the algorithm reduces gas costs and optimizes routes by selecting the most optimal market for the swap.
At 1inch, it is believed that more economical swaps are needed for broader adoption of crypto assets. The new version of Pathfinder allows for this.
The updated algorithm is now available in the 1inch dApp and through the API on the 1inch Developer Portal, providing enhanced routing efficiency, higher transaction speeds, and expanded integration capabilities for developers.
Notably, in May 2025, 1inch's market share among other aggregators jumped by 63%, the number of swaps by 80%, and users by 59%, according to OurNetwork data. On May 21, the daily trading volume on the platform reached $4.7 billion, setting a historical record.
