TLDR :
Kromatika Dex Limit Orders are the way to go / 1inch Limit Orders are unreliable

A bit of backstory :

I’ve been a crypto-enthusiast for years now, I started with Coinbase, enjoyed the pump-and-dump season trading on Bittrex, lost a lot of money during ICO season, got through crypto-winters, missed the Ethereum train and decided a few months ago to take a deeper look at the code-is-law smart-contracts, Defi and Eth L2s trend.

As I’ve been used to use CEX limit order feature, I looked for a way to achieve the same level of control on my DEX trades, I naturally searched for “DEX Limit Order” and found two DEX providing this feature :

• 1inch, the historical one : https://app.1inch.io/#/1/classic/limit-order/

• Kromatika, a more recent one : https://app.kromatika.finance/#/limitorder

The saying goes “once burned, twice shy”, I lost a lot of money on fake bridges, on scam tokens, on rotten dapps, this time I decided to apply the infamous DYOR methodology responsibly.So I created two identical Limit Orders to study precisely how it goes, I share my findings here.

The test order parameters :

Let’s be clear, I’m not good at TA, but sometimes, I’m lucky.I decided that ETH/USDC pair was going to 1724$, and that is the price I wanted to buy 100 USDC worth of Eth.

Well, the price target is defined, now let’s configure the orders in the two platforms.

The test orders creation

I set (about at the same time) an order on each DEX, for the same amount and the same target : 0.00058 Eth against each of my 100 USDC. It’s a 2% difference from the current price, again, my goal was not to make a lot of money or the best trade of the year, only to test the tools.

I chose a very very popular pair to make sure that liquidity and volatility won’t have an impact on my study.

We’ll speak about results and fees later, but please note that 1inch allow gasless order creation for some major tokens against Eth. (read : the fees will be taken from the order output)

A quick note on how these Limit Orders features work (please read, it will explain some of the conclusions.)

Kromatika and 1inch don’t have the same inner workings for Limit Orders.

• 1inch will create an offer and store it in its database before a market maker express the desire to fill it. One can call this a “request for quotation”.

• Kromatika will add liquidity to Uniswap v3 LP and use a Chainlink keeper to remove the Liquidity once the target price is reached.

These different methods will have consequences..

Please don’t believe me and check orders creation TXs :

1inch limit order creation : https://optimistic.etherscan.io/tx/0xf7acc5ee80977b56d7ef7d669b5b56a83f3eed4a32d670845f4565f6502a71ba

Kromatika limit order creation : https://optimistic.etherscan.io/tx/0xe3eaae7344f8e7c0eb9a263c5e5e2da035d016862f9f4a80ad0edc19300fbcb2

You can see that the rate is not exactly the same on the two platforms, there is a 0.1% difference. It’s due to the way Kromatika handle target price. Kromatika target price has to be set to a Uniswap LP Tick value. More info on Uni V3 LP tick values.

Beside that, nothing to see here, my orders are waiting to be filled. Time for a beer.

A few hours later - I am a genius

The price bounced at 1720 USDC/Eth, a bit below my price target. I’m officially a genius trader, able to predict bottoms with a 0.2% accuracy.
And more important for our analysis, my orders must be filled, time to open a google sheet and run the numbers.

Oopsy, my order have been partially processed on 1inch, what the f**ck ?

(it’s a shame)

1inch Limit Orders are in fact RFQ (request for quotation), a market maker has to decide to fill the order. In my case, the 1inch.exchange: Aggregation Router V4 was the maker for my order of 100 USDC for 0.058 Eth. It filled the order during a swap, but didn’t filled my whole 100 USDC order, letting ~7 USDC waiting to be swapped to Eth.

The fees (~$2) to fill my remaining order made the filling not profitable, so 7% of my order weren’t (and will probably never) get filled.

Take away : 1inch Limit Orders are not aggregated, each open Limit Order has to be filled independently of each other, incurring transactions fees for each fill.

Side-by-side comparison of Kromatika and 1inch cost-effectiveness.

At the end, it’s all about money.

The 1inch Limit Order f**ked me, it was not only teasing. Kromatika Limit Order brought me more Eth than I expected, Im glad I have tried this exchange.

Remarks :

• I used Optimism to limit the gas fees, they can have an important impact on the final result, in particular if one have to pay them twice to cancel an irrelevant order (1inch, I’m looking at you)

  • On 1inch, some ETH pairs can be traded in a “gasless” mode, where the tx fee is taken from the sent/received eth, that’s convenient.

  • On Kromatika, a part of the fees (including Chainlink keepers fees) are paid using their own token ($Krom) at its USD value of the fill time. Depending on one views on this token future price action, it could be a smart move to gather some $KROM when cheap to use it later.

  • The base gas fee (excluding order cancelation cost) is cheaper on Kromatika than on 1inch ($1.97 VS $2.04), I don’t know why (if someone from 1inch or Kromatika read this, any idea ?)

• The fill times are very different between the platforms, I don’t know why (if someone from 1inch read this, any idea ?)

• The target price is a bit more precise on 1inch than on Kromatika by ~0.1%, on very big trade on lowly volatile pairs (stable/stable), it can make a difference.

• The LP earnings given by Krom Limit Order seems an interesting topic, on pairs with less liquidity, I imagine it could bring a nice increase in output value, I’d have to test.

Takeaways :

• Don’t use 1inch Limit Orders if you want your orders 100% filled.

• Kromatika is a promising project to follow and the place to use Limit Orders.

• The trade on Kromatika was about 0.4% more profitable, for the same initial parameters.

• 48h later, as of time of writing, Eth/USDC is ~1591 USDC/Eth, I shouldn’t have made these trades.

If you found this article interesting, fell free to subscribe, I’m not finished with my DeFi bullshit hunting journey. Stay tuned.