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What is 1inch? Everything you need to know about the project

The main thing

  • 1inch is a liquidity aggregator from decentralized exchanges that uses order routing and limit order placement technologies. It also offers liquidity farming.
  • When exchanging cryptocurrencies through the 1inch protocol, it offers the most favorable prices, which it collects from dozens of sources in real time.
  • The project has a native token that can be used in the 1inch DAO and to save on fees paid.

Who founded 1inch?

The founders of the project are Russians Sergey Kunz and Sergey Bukov, who developed the aggregator in 2019 at the ETHGlobal hackathon in New York. Prior to that, they participated in a number of other blockchain programming competitions.

Now the ecosystem is being developed by the non-profit organization 1inch Foundation, which issues grants and finances pharming programs. In addition, a community of more than 100 developers contributes to improving the protocol. The application code is published on Github.

At the end of 2021, the project received funding in the amount of $175 million from leading investment funds.

What is claim routing?

1inch uses the Aggregation Protocol to dynamically aggregate offers from various decentralized platforms. Its main function is to find and offer the best quotes to the user on different platforms and blockchains when he exchanges digital assets through the platform.

The 1inch aggregator works with dozens of liquidity sources, including Uniswap, Curve, Balancer, Bancor, PancakeSwap and other popular decentralized exchanges.

A special smart contract controls the execution of the transaction, preventing the loss of user funds even if connected to an unreliable source of liquidity. A favorable price when exchanging cryptocurrencies is also ensured by the optimization of network commissions incorporated into the protocol.

In addition, to save money, the protocol can “split” the order during its execution, taking liquidity from several pools on different platforms at once.

What networks does 1inch work with?

As of May 2022, the platform supports many DeFi protocols and pools running on eight blockchains:

  • Ethereum;
  • BNB Chain;
  • polygon;
  • optimism;
  • Arbitrum;
  • Gnosis Chain;
  • Avalanche;
  • fantom.

How to trade in 1inch?

The aggregator web application interface is concise and reminiscent of Uniswap. First you need to connect a browser wallet by selecting a network. You can switch the blockchain using a special button.

In the middle of the screen there is a window for creating an application. The user can select the type of order as well as the sides of the cryptocurrency to be exchanged. There are also finer settings: the size of the network commission, the maximum allowable slippage rate, the partial execution function, and others.

What order types are available in 1inch?

Traditional trading capabilities are often limited in DeFi applications due to the complexity of the technical implementation. In particular, most protocols only allow exchanges at the current market price. In 1inch, limit orders are available, as on centralized exchanges. The Limit Order Protocol is responsible for this function.

After filling by the user, the order is sent to the decentralized base of the aggregator. It automatically converges with any opposite order, including those placed by the 1inch protocol itself (it also acts as a source of liquidity).

User funds themselves are not reserved. Therefore, if, after placing the order, he moves them to another address, his order will simply not be executed.

When executing a limit order, the taker (buyer) also pays the cost of the network commission. Only the 1inch protocol does not pay for “gas”, which allows it to offer users better prices.

In addition to market and limit orders, users can also make direct exchanges among themselves (P2P). This option was added in 2022.

Is it possible to supply and farm liquidity in 1inch?

Yes, the platform provides an opportunity to earn income from liquidity supplies using the Liquidity Protocol technology. To do this, you can participate in pools. The application also has its own 1inch Earn program, the purpose of which is the stable and efficient use of capital. In May 2022, one pool, USDC/USDT, is available under this program, with a yield of about 4.7% per annum. In addition, 1inch runs limited-time pharming programs.

Why 1inch has its own token?

The aggregator has a native cryptocurrency, which was released in 2020 on the Ethereum network and BNB Chain (via a cross-chain bridge).

With the help of a token, you can participate in the DAO of the project. Its participants make proposals, discuss them on the forum and vote on them. To participate in voting, you need to send 1inch tokens to a special staking contract. It is also assumed that it will apply the routing protocol. Also, new tokens can be obtained using staking.

Now for 1inch coin holders there is a cashback program for the commissions paid. The amount of the refund depends on the amount of coins in the wallet. To participate in the program, you need to have at least 100 tokens – in this case, the cashback will be 25%.

What is the 1inch wallet for?

In addition to the trading and farming app, the project team is also developing a wallet specifically for DeFi. The wallet can be used in any DeFi application, not just 1inch, it is also available for mobile devices.

In addition to storing and transferring cryptocurrencies in the wallet, you can make swaps, participate in the staking of the 1inch token and search for decentralized applications. In addition, 1inch Wallet allows you to store non-fungible tokens (NFTs), buy crypto assets with fiat money, and even play blockchain games.

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My profession is a journalist, but my hobby for 8 years has been studying Forex investing and trading. During this time, I managed to gain extensive experience in investing and trading cryptocurrencies and double my capital in the Forex market. To be the author of this magazine, the site owners invited me to participate in one of the 2020 trading webinars, and I will try to reveal the most relevant crypto market news for you.

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