1 inch hit with $5 million exploits on outdated smart contracts

Blockchain security company Slowmist reports that Defi Aggregator 1inch is suffering from exploits with Resolver Smart Contract, resulting in losses of over $5 million.

On March 7th, Slowmist founder Yu Xian revealed that the attacker had emitted around 2.4 million USDC and 1,276 lap Ethereum (WETH) from the affected smart contracts.

He made it clear that normal users were barely affected, but he was able to take advantage of the outdated Fusion V1 framework to take the brunt of the attack.

1inch confirms violation

On March 6, 1 inch admitted an exploit, saying the vulnerability was discovered in a specific resolver smart contract a day ago.

The team confirmed that only resolver contracts running an outdated Fusion V1 implementation were affected. They reassured users that their funds remained safe and that the losses were limited to affected resolvers.

After the incident, 1inch began an effort to help protect the affected resolver systems. The platform also urged all resolvers to audit and renew their contracts to prevent further attacks.

Resolvers play a key role in the 1-inch ecosystem. These automated algorithms evaluate orders that fulfill and act as market makers, providing liquidity to one inch swappers.

The platform did not disclose any specific financial losses, but introduced a bug bounty program to gather more insight into the case.

The program offers rewards ranging from $100 to $500,000. At the time of writing, 1 inch received 58 submissions and paid $200 in bounty.

1 inch ecosystem growth

According to the latest report from Messari, despite these set-offs, 1inch remains the dominant player in the Defi sector.

The report noted that 1 inch promoted 38.2% of all DEX volumes routed through aggregators on the supported blockchain in the fourth quarter of 2024.

However, its market share fell 10% quarterly as competitors ODS and CowSWAP gained traction.

Nevertheless, 1-inch decentralized exchange (DEX) volume rose from $493.5 billion to $1.09 trillion, up 104% per quarter.

The aggregation protocol, which is responsible for routing most transactions in an inch, saw an average daily volume increase of 37%, reaching $369.7 million in the fourth quarter.

Ethereum led as the dominant blockchain for 1-inch transactions, accounting for 66% of the volume of the aggregation protocol.

Coinbase support base emerged as the second largest chain with an 11% market share, falling from 14% to 10%. These three networks contributed 87% of the total platform volume.