1inch

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This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is 1inch?

1inch (1INCH) is a decentralized DeFi aggregator that sources liquidity from various exchanges, allowing users to find the best swap rates across multiple blockchains. It utilizes a routing algorithm to optimize fees and liquidity, providing a seamless and efficient trading experience. The platform is governed by the 1INCH token, which serves as a governance and utility token, enabling users to participate in decision-making and utilizing the token across different protocols.

How is 1inch used?

1inch (1INCH) is a decentralized exchange (DEX) aggregator that allows users to swap tokens at optimal prices by accessing liquidity from multiple sources. Here's how it works and how the 1INCH token is used:

  • Optimal Prices: 1inch aggregates liquidity from various DEXes and liquidity pools, ensuring users get the best swap rates. This is achieved through a Dutch auction process where third-party traders called "resolvers" act as market makers, bidding on swaps and profiting from arbitrage trading and platform incentives.

  • Token Usage: The 1INCH token serves both as a utility token and a governance token. In Fusion mode, resolvers stake 1INCH tokens and deposit them into a "feebank" contract to process swap transactions. Holders of 1INCH tokens also have voting rights in 1inch's decentralized autonomous organization (DAO), allowing them to choose future directions for the platform.

  • Token Distribution: The total supply of 1.5 billion 1INCH tokens is allocated as follows: 33% to backers/investors, 30% for community incentives, 22.5% to core contributors, and 14.5% for network growth. All tokens were scheduled to be distributed by the end of 2024.

  • Governance: 1INCH token holders can vote on key protocol parameters such as swapping fees, price impact fees, governance rewards, referral rewards, and the token's decay period.

  • Security: 1inch is designed with security as a top priority, with features like non-upgradable smart contracts by design and repeated audits by top experts to minimize the risk of hacking and exploits.

How do I store 1inch?

To store 1inch (1INCH) tokens, you can use a variety of wallets that support the Ethereum blockchain, as 1INCH is an ERC20 token. Here are some options:

  1. 1inch Wallet: The official 1inch Wallet is a DeFi wallet that allows you to manage your crypto and get the best token swap prices across the DeFi industry. It offers top-level security, is completely self-custodial, and supports hardware wallets like Ledger Nano X.

  2. Ledger Hardware Wallet: Ledger offers a range of hardware wallets, such as Ledger Nano S Plus and Ledger Nano X, which can securely store your 1inch tokens. These wallets store your private keys offline, making them resistant to malicious attacks. You can manage your assets using the Ledger Live App.

  3. YouHodler Wallet: YouHodler provides a wallet solution that supports 1INCH tokens. Their mobile wallet has advanced security features like 2FA, 3FA, and regular security audits to ensure the safety of your funds.

  1. Other Ethereum Wallets: Since 1INCH is an ERC20 token, you can also use other Ethereum wallets that support ERC20 tokens. These wallets allow you to send, receive, and store your 1inch tokens securely.

When choosing a wallet, consider factors such as security, ease of use, and compatibility with your devices. Always ensure you follow best practices for securing your private keys and protecting your assets.

How to buy 1inch?

To buy 1inch (1INCH) tokens, follow these steps:

  1. Choose a Reputable Exchange:

    • Select a reliable cryptocurrency exchange that supports 1INCH tokens, such as Binance, KuCoin, or Tap Global.
  2. Create an Account:

    • Register on the chosen exchange's website or mobile app, and verify your account to ensure security and compliance.
  3. Add a Payment Method:

  • Set up a payment method, which can include credit/debit cards, bank transfers, or third-party payment channels, depending on the exchange.
  1. Buy 1INCH Tokens:

    • Navigate to the exchange's platform, select 1INCH tokens, and choose your preferred payment method. You may need to buy a stablecoin like USDT first and then use it to purchase 1INCH tokens.
  2. Store Your Tokens:

    • Once you have purchased your 1INCH tokens, store them securely in an Ethereum-compatible wallet that supports ERC-20 tokens. You can use the exchange's built-in wallet or a third-party wallet like Trust Wallet.

Remember to always follow the specific instructions and guidelines provided by the exchange you choose, and be cautious of market risks and price volatility.

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History of 1inch

The 1inch Network was founded by Sergej Kunz and Anton Bukov during the ETHGlobal New York hackathon in May 2019. Initially, they developed a prototype of a decentralized exchange (DEX) aggregator, which aimed to optimize trades across various DEXes by sourcing liquidity from multiple platforms. This prototype became the backbone of the 1inch Network, addressing the issue of users having to manually compare prices across different exchanges to find the best swap rates.

In August 2020, 1inch launched after securing $2.8 million in its initial funding round from Binance Labs, Galaxy Digital, FTX, and other FinTech firms and venture capitalists. By the end of the year, the platform received another $12 million in Series A funding from notable firms like Pantera Capital, Blockchain Capital, ParaFi Capital, Spartan Group, and Nima Capital.

In December 2020, the 1inch governance token was launched and airdropped to users who had previously used the 1inch exchange platform. This token allowed holders to pay for exchange fees and participate in the network's governance through voting rights.

Over time, 1inch expanded its offerings to include the Aggregation Protocol, Liquidity Protocol, Limit Order Protocol, and the 1inch Mobile Wallet. The Aggregation Protocol, powered by the Pathfinder algorithm, facilitates asset exchanges at the best available rates on the market. The Liquidity Protocol, formerly known as Mooniswap, is an automated market maker (AMM) designed to provide capital-efficient liquidity while protecting users from front-running. The Limit Order Protocol enables users to place limit orders and RFQ orders, offering flexibility and high gas efficiency through gasless limit order features.

Today, the 1inch Network operates across various Ethereum Virtual Machine (EVM) networks, including Ethereum, BNB Chain, Polygon, Arbitrum, Optimism, Gnosis Chain, Avalanche, Klaytn, Aurora, zkSync Era, and Fantom, ensuring broad accessibility and interoperability within the DeFi ecosystem.

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How 1inch works

1inch is a decentralized exchange (DEX) aggregator that allows users to swap tokens at optimal prices by accessing liquidity from multiple DEXes. Here's how it works:

Aggregation Protocol

1inch uses a cutting-edge algorithm called Pathfinder to determine the best exchange rates for token swaps. Pathfinder tests many possible swaps through one or multiple DEXes to achieve the best price. This might mean splitting a swap into smaller trades in different protocols or even testing “market depths” in the same protocol. The algorithm then determines the parameters for the swap by specifying the environment (i.e., the chain), checking token allowances (so tokens can be withdrawn from users’ wallets), and making the swap according to certain details like sending/receiving addresses and slippage allowance.

Liquidity Sources

1inch aggregates liquidity from various DEXes across multiple blockchain networks, including Ethereum, Binance Smart Chain, Polygon, and others. This allows users to access deep liquidity and competitive token swap rates on various DEXes. The platform offers unique features such as partial fill and the ability to find the best swap paths across multiple liquidity sources.

Liquidity Protocol

1inch has its own liquidity protocol, previously known as Mooniswap, which is an Automated Market Maker (AMM). This protocol aims to offer capital-efficient liquidity positions while protecting users from front-running. The AMM mechanism allows two users to trade assets without an intermediary automatically.

Limit Order Protocol

1inch also offers a limit order protocol that allows users to set an acceptable price for their swap, rather than using the spot market price. This protocol features no fees, dynamic pricing, and multichain crypto support, making it flexible and usable across different blockchains.

Fusion

In 2022, 1inch released Fusion, a feature that further improves swaps for users. Fusion eliminates gas fees and reduces the risk of front-running. This is especially important for users of Ethereum’s mainnet, as network congestion has historically caused unaffordable run-ups in the cost of transactions. Front-running occurs when trading bots leverage knowledge of future transactions to gain an edge and make profits.

1INCH Token

The 1INCH token is used as both a utility token and a governance token. In Fusion mode, 1INCH is staked by resolvers and deposited into a “feebank” contract to become eligible for processing swap transactions. Holders of 1INCH also have voting rights in 1inch’s DAO, allowing them to choose future directions for the platform.

Security Features

1inch prioritizes security and compliance. The platform is built with security as a top priority and has been repeatedly audited by top experts. The smart contracts are non-upgradable by design, which reduces the risk of hacking. Additionally, even if liquidity pools aggregated by 1inch are compromised, users' funds won't be accessed by hackers.

Overall, 1inch simplifies the process of finding the best token prices and gives users instant governance abilities, making it a valuable DEX aggregator in the DeFi space.

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1inch's strengths

1inch (1INCH) has several strengths that contribute to its success and popularity:

  1. Decentralized Exchange Aggregator: 1inch aggregates liquidity from multiple DEXes, allowing users to find the best token prices across various platforms. This feature simplifies the process of finding optimal swap rates and enhances the overall efficiency of crypto-asset swapping.

  2. Pathfinder Algorithm: The proprietary Pathfinder algorithm maps out the best terms for crypto swaps, often splitting transactions among multiple exchanges or providers to guarantee the best possible exchange rate. This algorithm ensures that users get the most favorable deals.

  3. Multi-Chain Support: 1inch supports swaps across multiple blockchain networks, including Ethereum, Binance Smart Chain, Polygon, and others. This broadens the scope of available liquidity and enhances the user experience.

  1. Fusion Mode: 1inch's Fusion mode eliminates gas fees and reduces the risk of front-running by using limit orders and third-party validators. This feature significantly improves the security and cost-effectiveness of swaps.

  2. Governance and Community Involvement: The 1INCH token serves as both a utility token and a governance token, allowing holders to vote on key protocol parameters and participate in the platform's decision-making process. This decentralized governance model ensures that the community has a significant say in the platform's development.

  3. Security and Compliance: 1inch prioritizes security and compliance, partnering with leading security and compliance specialists to ensure a safe and trustworthy environment for users. The platform's smart contracts are repeatedly audited, and its non-upgradable design reduces the risk of hacking.

  1. Diverse Product Offerings: 1inch provides a range of products and services, including limit order protocols, liquidity protocols, and portfolio tracking tools. These offerings enhance the overall user experience and provide a comprehensive suite of DeFi solutions.

These strengths collectively contribute to 1inch's position as a leading decentralized exchange aggregator and a prominent player in the DeFi space.

1inch's risks

1inch (1INCH) faces several risks, primarily related to smart contract vulnerabilities and illicit activities. The primary risk associated with using 1inch is the potential for smart contract attacks, which could lead to the loss of funds if there is a flaw or vulnerability in the contract's code. Additionally, 1inch screens wallet addresses for illicit activities, such as sanctions, terrorism financing, hacked or stolen funds, ransomware, human trafficking, and child sexual abuse material (CSAM). If an address is flagged as high-risk, it is automatically blocked from using the 1inch interface.

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Did 1inch raise funds?

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1inch’s team

  • Anton Bukov: Co-founder and CTO of 1inch Network.
  • Sergej Kunz: Co-founder and CEO of 1inch Network.
  • Chae Ho Shin: Team member.
  • Andri Rabetanety: Team member.
  • Sergey Maslennikov: Team member.
  • Vitaliy Menshenin: Team member.
  • Gleb Alekseev: Team member.
  • Orest Gavryliak: Team member.
  • Walid Benothman: Team member.
  • Ekaterina Rumianceva: Team member.
  • Christy Lin: Team member.

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