[1IP-12] Improve Fusion Auction Resolver Competition

Simple Summary

This proposal seeks to modify 1inch Fusion to allow all five of the top resolvers to fill orders during the entire duration of the Dutch Auction.

Abstract

If passed, this proposal will change the way that 1inch Fusion orders are filled by allowing all five resolvers to participate in every stage of the Dutch auction. This change will increase competition amongst resolvers and ensure that users are getting the best rates. 

Motivation

Currently, the top five resolvers are given fill priority according to their Unicorn Power. For the first minute of the Dutch auction, only the resolver with the highest Unicorn Power can fill the order. Then, the resolver with the second most Unicorn Power joins them for the second minute, and so forth... This proposal will foster a more competitive auction by giving all resolvers equal priority.

This proposal aims to increase competition amongst resolvers and thus provide better rates for users when they make swaps via the 1inch Network. 

Specification 

This proposal serves as a signal from the 1inch Network DAO to 1inch Labs. Once passed, the 1inch Network DAO calls for 1inch Labs to modify the Fusion logic to allow all five resolvers to participate in every stage of the Dutch auction.

Above is the existing Fusion auction order structure. 

Below is the modified Fusion auction order structure that this proposal calls for.

Rationale

Allowing for pure competition amongst the five resolvers, rather than giving preferential access based on staking power, will facilitate better swap rates and faster execution times. 

This change will also make it more attractive for professional market makers to become resolvers, which may lead to a greater demand for 1INCH token as they accumulate the necessary Unicorn Power.

Considerations

1inch Fusion mode has already been audited and deployed. This proposal will have no negative security implications as it will only change the structure of the Dutch auction.

An increase in the number of resolvers participating in the Fusion auctions should reduce the likelihood of resolver collusion.