In December 2020, the decentralized finance (DeFi) world witnessed an extraordinary event. A leading DEX aggregator, 1Inch Exchange, launched its native 1INCH token to celebrate its growth. To mark this milestone, the platform rewarded its frequent users with tokens through an airdrop. This move generated immense excitement among traders, leading to immediate listings on Binance and all-time highs of $2 per token. But what exactly is 1Inch, and how does it work?
What Is 1Inch Exchange?
Founded in 2019 by Anton Bukov and Sergej Kunz, 1Inch is a decentralized exchange (DEX) aggregator. Unlike traditional exchanges, DEX platforms enable peer-to-peer cryptocurrency transactions without intermediaries. Popular DEXs like Uniswap, Kyber Network, and Oasis each offer varying prices and fee structures. 1Inch solves this inefficiency by scanning multiple liquidity sources to find the most cost-effective trading routes.
How Does 1Inch Work?
1Inch employs an advanced algorithm that scans 33+ liquidity protocols to identify optimal swap paths based on:
- Price efficiency
- Gas fees
- Liquidity depth
- Slippage tolerance
For example, swapping USDT for WBTC might involve splitting the trade across multiple DEXs to minimize costs. The algorithm dynamically adjusts routes to ensure users get the best rates.
1Inch Liquidity Protocol (Mooniswap)
In August 2020, 1Inch launched its Automated Market Maker (AMM), Mooniswap, later rebranded as the 1Inch Liquidity Protocol. Key features include:
- Reduced impermanent loss via innovative pricing mechanisms
- Lower arbitrage profits compared to Uniswap, benefiting liquidity providers
- Enhanced capital efficiency for traders
👉 Explore 1Inch Liquidity Protocol
How to Use 1Inch Exchange
Follow these steps to trade on 1Inch:
Connect Your Wallet
- Supported wallets: MetaMask, TrustWallet, or other Web3-enabled wallets.
- Click "Connect Wallet" on the 1Inch Exchange homepage.
Select Tokens
- Choose the token pair (e.g., USDT to DAI).
Approve Token Spending
- Opt for "Unlock" (one-time approval) or "Unlock Infinity" (saves gas fees).
Execute Swap
- Click "Swap Now" and confirm the transaction in your wallet.
The 1INCH Token: Governance and Utility
Launched on Christmas 2020, the 1INCH token serves as a governance tool, allowing holders to vote on platform upgrades. Key details:
- Total Supply: 1.5 billion (distributed over 4 years)
Use Cases:
- Voting on protocol changes
- Staking rewards
- Fee discounts
Where to Buy 1INCH?
Available on major exchanges like:
- Binance
- Uniswap
- Huobi Global
👉 Trade 1INCH on 1Inch Exchange
FAQs About 1Inch Exchange
1. What makes 1Inch different from Uniswap?
1Inch aggregates multiple DEXs for better rates, while Uniswap operates as a single AMM.
2. How does 1Inch reduce gas fees?
By splitting trades across protocols and offering "Infinity Unlock" to minimize approvals.
3. Is the 1INCH token a good investment?
Its value depends on platform adoption and DeFi trends. Research before investing.
4. Can I provide liquidity on 1Inch?
Yes, via the 1Inch Liquidity Protocol.
Conclusion
Since 2019, 1Inch Exchange has grown exponentially by optimizing decentralized trading. With its tokenomics, liquidity solutions, and user-centric design, 1Inch is poised to remain a DeFi leader.