Golden Recursion Inc. logoGolden Recursion Inc. logo
Advanced Search
1inch

1inch

1inch is a distributed network for decentralized protocols. 1inch Limited builds decentralized protocols and contributes to the development of the 1inch Network.

With decentralized finance so explosive over the past year it’s no wonder that there are so many DEXs and liquidity pools operating and popping up.

Keeping track of them all, and which are offering the best trading conditions, can be a real nightmare. And that’s where the 1inch Exchange is so interesting.

The 1inch Exchange calls itself the “Leading DEX Aggregator” and we’re inclined to agree. It also has liquidity pools and users can farm the native 1INCH token on the platform. That 1INCH token is also interesting as an instant governance token.

1inch, like so many other Ethereum-based projects, emerged from an ETH dev conference. This time it was at the ETHGlobal hackathon back in 2019. It was founded by Sergej Kunz, who is still the CEO of 1inch, and Anton Bukov, its CTO.

The founders of the 1inch Exchange. Image via 1inch blog.

In August 2020 they completed a Seed round from Binance Labs of about $2.8 million. Then, in early December of 2020, they managed to close a much larger $12 million funding round that was led by Pantera capital.

Initially the founders of 1inch Exchange created a separate portal for yield farming, which was called Mooniswap. It was basically a Uniswap clone. Since December 2020 that portal has been deprecated as the 1inch Liquidity Protocol was launched. Now 1inch really does function more like Uniswap, with a combination of exchange and liquidity pools. However the platform likely offers better rates because it is pulling liquidity from a number of other decentralized exchanges.

The following review will go into more detail regarding the features available at the 1inch exchange, as well as explaining how to go about making an exchange or providing liquidity to the pools. There’s a lot to cover, so let’s dive in.

What is 1inch Exchange?

The 1inch exchange is a decentralized exchange, or DEX, aggregator. Rather than working as an exchange itself it splits orders between many other DEXs and private liquidity providers to find the best possible exchange rates. In its current state 1inch supports over two dozen liquidity sources.

So many sources of liquidity. Image via http://1inch.exchange

At 1inch Exchange it’s a simple process to connect a web3 wallet and begin swapping ERC-20 tokens at the best possible rates. The exchange will even split orders between several exchanges if that’s what it takes to get the best rate for an entire order.

It is also possible to create limit orders at 1inch, to earn by staking 1INCH tokens, and to earn by supplying liquidity to the 1inch liquidity pools.

1inch Exchange Pros & Cons

As a short introduction to the strengths and weaknesses of the platform we include these pros and cons to get started for your consideration:

This is an exchange with plenty of good things going for it. Image via http://1inch.exchange.
Pros
  • 1inch Exchange has had no security breaches or hacking incidents.
  • The user interface has been created to be very user friendly.
  • 1inch Wallet has iOS app for better user experience.
  • 1inch Exchange charges no trading, deposit, or withdrawal fees.
  • 1inch Exchange ensures high liquidity and excellent rates by aggregating DEX order books, while also limiting the number of transaction fees.
  • CHI Gas Tokens can lower transaction costs even further.
  • The addition of the 1inch Liquidity Protocol allows for yield farming.
Cons
  • The platform does not support the use of fiat currencies.
  • Even though the platform is quite user friendly, beginners could struggle to get a grasp on how to use 1inch Exchange.
  • The “Infinity Unlock” feature could potentially be a point of attack in the future. While it does save on transaction fees and time, unlocking each transaction separately is more secure.
Staking the 1INCH Token

While the most important function of the 1INCH token is its governance feature, it also has a staking feature that lets any 1INCH holder stake the coins and make more 1INCH tokens. Tokens can easily be staked by going to the DAO tab on the website and then navigating to the Governance section.

Those who choose to stake their 1INCH tokens receive rewards from the swap fee and the price impact fee. Plus, those who hold the 1INCH token have the right to vote on both these parameters, and when voting holders also receive governance rewards.

Staking 1INCH tokens is quite simple. First you need to acquire some 1INCH tokens if you don’t already have some. Then navigate to the 1inch Exchange and click on the DAO tab. Once on the DAO page go to the Governance tab if not already there. Find the token staking box in the upper right of the page and click on the button to Connect Wallet.

Once the wallet is connected you enter the amount of 1INCH tokens you’d like to stake and then unlock them. You can use the regular “Unlock” or you can choose to use the “Infinity Unlock” feature. The Infinity Unlock will save you from paying gas for this transaction again, but if it is ever exploited it could present a security risk.

You can also click the settings icon in the upper right corner of the staking box to change the gas cost between Standard, Fast, and Instant. Once staking is unlocked you can always stake more by making a last transaction.

1inch Supported Wallets

Because 1inch is a decentralized exchange aggregator and liquidity provider there is no requirement to create an account to trade through them. All that’s needed is to connect a supported wallet to the exchange and fund it with supported ERC-20 tokens. There are never any third-parties between your wallet and the exchange.

The 1inch Exchange does support a number of wallets for swapping tokens. The wallets supported include MetaMask, TrustWallet, MEW, WalletConnect, and the Ledger hardware wallet.

The 1inch Exchange can be used with a number of web-based, mobile, and hardware wallets depending on your preference. Below we show you how to use the 1inch Exchange with the Metamask wallet.

Conclusion

Overall it seems clear that the innovative features and tools provided by the 1inch Exchange can far outweigh any potential issues with the platform. In fact, we think the 1inch Exchange has done an excellent job in handling some of the problems that plague the emerging DeFi ecosystem.

One of their solutions is the provision of far greater liquidity than many of the existing DEXs. The lack of liquidity is a problem caused by the fragmentation of DEX platforms, but as an aggregator 1inch more than makes up for this.

By splitting orders across multiple exchanges where necessary 1inch does away with the slippage that can lead to far higher than necessary trading costs. It’s also quite nice to be able to compare the rates and gas fees being offered across multiple exchanges. Active traders will find that this can save them quite a bit of time wasted in looking across the order books of multiple exchanges.

The other notable features on the platform thus far include the CHI gastoken, the 1inch Liquidity Protocol, the addition of limit orders, and the move to include a bridge to the Binance Smart Chain.

That said, the platform probably isn’t suited to cryptocurrency beginners, but is instead something more suited towards those with some experience not only in cryptocurrencies, but also with DeFi platforms.

The team is trying to make things as simple as possible though, and if they can create a platform suitable for all experience levels then they might easily become a leader in the DEX ecosystem.

Timeline

April 14, 2022
The 1inch Network expands to Fantom
February 3, 2022
New Releases - 1inch Network
February 3, 2022
1inch launches Earn - 1inch Network
December 21, 2021
1inch DeFi Racer starts off! - 1inch Network
December 16, 2021
The 1inch Limit Order Protocol v2 is released - 1inch Network
December 1, 2021
The 1inch Network closes a $175 mln Series B round - 1inch Network
December 2021
1inch raises a $175,000,000 series B round from Alameda Research, Amber Group, Fenbushi Capital, Gemini Frontier Fund, Nexo, Tribe Capital, VanEck and Wavemaker Genesis.
November 16, 2021
The road to decentralization - 1inch Network
November 12, 2021
The 1inch Foundation releases $585,000 to grantees - 1inch Network
November 11, 2021
The 1inch Foundation announces Black Friday Week - 1inch Network

Funding Rounds

Patents

Further Resources

Title
Author
Link
Type
Date

1inch DeFi Racer starts off! - 1inch Network

1inch Network

Web

December 21, 2021

1Inch Exchange Review: My Brutally Honest Opinion About 1Inch 🤔

Web

August 5, 2021

1inch Exchange: DeFi's Next Hidden Gem??💎

Web

January 5, 2021

1inch explained in under 5 minutes. (cryptocurrency)

Web

April 2, 2021

1INCH governance token explained

Web

January 19, 2021

References

...
Golden logo
By using this site, you agree to our Terms & Conditions.