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1inch (1INCH)

1inch (1INCH)

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The DEX Aggregator Protocol Supporting Multiple Chains.

1inch (1INCH) Fact Sheet

  1. 1inch is a decentralized exchange (DEX) aggregator protocol that works across multiple chains, including Ethereum, BNB Chain, Polygon, Optimism, Fantom, Gnosis, Avalanche, and others.
  2. The native cryptocurrency used across 1inch is known as the 1INCH token, an ERC-20-based token utilized for utility and governance.
  3. Users can engage in liquidity mining, staking, and governance, alongside the protocol's many other features.
  4. 1inch utilizes a proprietary Pathfinder API with a discovery and routing algorithm that aims to find the best possible paths toward any token swap.
  5. 1inch features its decentralized finance (DeFi) wallet that lets users directly buy, store, transfer, swap, and stake cryptocurrencies and utilize FIAT gateway providers.
  6. 1inch was founded in May 2019 by Sergej Kunz and Anton Bukov during an ETHGlobal hackathon. Kunz previously worked as a software engineer for Porsche, while Bukov was a developer who previously worked on the NEAR Protocol.
  7. In December 2020, the 1inch founders secured a $12 million funding round with participation from many notable firms, including Pantera Capital and ParaFi Capital.
  8. 1inch company is incorporated in the Caribbean West Indies, Saint Thomas Middle Island, Federation of Saint Christopher and Nevis, and headquartered in the British Virgin Islands.

1INCH Historical Data Price Chart in U.S. Dollars (USD)


1INCH Historical Data Price Chart in U.S. Dollars (USD). Source: TradingView

What is 1inch (1INCH)?

1inch was created to solve a problem many investors and traders engaged in the sphere of decentralized finance (DeFi) encountered before its creation.

Specifically, a considerable number of decentralized exchanges (DEXs) developed. In the early days of DeFi, users had to individually keep track of all of the DEX options available to them to find the best trading conditions so they could have the best possible outcome.

However, 1inch was created as a DEX aggregator. To truly understand the functionality of 1inch, we will first need to go over what a DEX aggregator is.

A DEX aggregator is a financial protocol enabling traders to access various trading tools.

Cryptocurrency exchanges are typically classified into two main types, centralized exchanges (CEXs) and decentralized exchanges (DEXs).

A DEX aggregator fills the role of being a unified explorer for prices and liquidity, specifically on offer at DEXs. DEXs will typically offer varying pricing, and it might not always be an easy task when manually finding a trading pair that you are specifically looking for.

As such, 1inch is a DEX aggregator that we can view in a similar way to a search engine, where users are allowed to aggregate information from numerous decentralized exchanges (DEXs) and pick which deal works for them best.

DEX aggregators such as 1inch accumulate data from a wide range of DEXs and facilitate split trades to get the best possible prices.

They perform various calculations to give users the option of achieving the best price for a swap.

This ecosystem can benefit traders and investors because these aggregators can perform complicated calculations within seconds, which might take hours to complete when done manually.

How is 1inch (1INCH) Used?

1inch is an exchange aggregator where users can swap one cryptocurrency for another across many available options. However, what differentiates it from other platforms is that, unlike working as an exchange directly, it splits its orders between other DEXs and private liquidity providers to find the best possible exchange rates for its users.

To begin using the 1inch exchange, users must essentially connect their cryptocurrency wallets, otherwise referred to as Web3 wallets.

Unlike centralized exchanges, 1inch does not store any cryptocurrencies from the users. The DEX can, however, split orders between several exchanges if it means getting the best rate for a specific order.

1inch utilizes a proprietary API known as Pathfinder.

API is short for "application programming interface" and is a way computer programs can communicate with one another. It is an interface that offers a service to other software and fills the role of a software intermediary that allows applications to communicate with one another.

Pathfinder features a discovery and routing algorithm, which makes it stand out in numerous ways. In other words, its primary goal is to find the best possible paths for any token swap that a user proposes. Then it splits up a swap across numerous exchanges or through different market depths within the same exchange to find the best possible rate.

It also utilizes a dynamic fill mechanism, where the amounts in an exchange with unfavorable rates get moved to the ones with favorable rates when the transaction gets processed.

The result is that the exchange rate and the gas fee the end-user receives will be better than anything they could have just by utilizing a single exchange.

While 1inch does not charge swapping fees, it is not entirely free, as each user needs to pay a fee for every action they take, from adding liquidity to trading cryptocurrencies.

1inch introduced the Chi Gastoken (CHI) cryptocurrency in 2020.

Whenever a transaction occurs on the Ethereum (ETH) blockchain, it requires gas.

Gastoken aims to facilitate the transaction with the same amount of work but with less gas usage since it utilizes the Ethereum storage refund.

CHI is an ERC-20-based token that helps users reduce the transaction fees on the 1inch exchange.

Its value is pegged to the gas price set by the ETH network, so when the ETH gas price decreases, so will the value of CHI, while when it increases, so will the CHI.

Then there is also the 1inch Wallet, a simple-to-use cryptocurrency wallet with sophisticated features.

The main point of appeal for the 1inch Wallet is that it allows users to participate in multiple activities – stake cryptocurrencies directly through it, play DeFi games through it, store and transfer non-fungible tokens (NFTs), and buy cryptocurrencies with FIAT currencies through partnerships.

1inch Wallet also features a built-in store and the ability to transfer cryptocurrencies across multiple blockchain networks.

Use-Cases of 1inch (1INCH)

When we look at the use cases surrounding 1inch, it is clear that the platform has the primary goal of allowing users to get the best possible rates within any token swap.

However, over time, the platform has evolved and now features numerous types of use-cases.

First, we need to look at the 1INCH cryptocurrency. It launched in 2020, and this token was initially used as a governance token, so any user could vote on how the 1inch platform is run, dubbed "instant governance."

The primary way users of the platform can earn the 1INCH cryptocurrency is through providing liquidity within the liquidity 1inch Liquidity Protocol platform.

1inch Liquidity Protocol allows earning passive income from the cryptocurrencies users have. All they need to do is start providing liquidity.

Users stake cryptocurrencies that other people can utilize when they place trades. They can even earn other cryptocurrencies through this procedure as well.

The 1inch Liquidity Protocol is an automated market maker (AMM) that can facilitate decentralized token swaps without requiring an order book. It is specifically designed to get value typically gained by arbitrageurs, where it can provide liquidity providers with competitive returns.

Users just have to navigate to the “Pools” section of the application, where they can connect their wallet, pick a pool consisting of a token pair, and then decide how much they want to provide. Assets on each pool pair have to be delivered in equal amounts.

1INCH is also a cryptocurrency listed on numerous cryptocurrency exchanges.

Usability & Primary Features of 1inch (1INCH)

1inch is aimed at being a simple-to-use DEX that will allow just about anyone with a cryptocurrency wallet to connect to it, where they can pick a coin that they have and a coin that they want to get through a dropdown menu to start things out.

However, there is also an advanced menu, where 1inch enables users to go a bit more in-depth and set custom parameters such as slippage tolerance, gas price, and liquidity sources.

Protocol

1inch is an Ethereum-based token and, as such, follows the ERC-20 token standard that all Ethereum-built tokens need to follow.

Furthermore, the 1inch DEX utilizes the aforementioned proprietary API known as Pathfinder.

Users can optimize their trades across hundreds of DEXs built on multiple networks, including Ethereum, BNB Chain, Polygon, Optimism, Fantom, Gnosis, Avalanche, and others.

Ledger

1inch is an Ethereum token that powers a decentralized exchange that gives users access to the best rates when making a token trade. However, the DEX does not directly store crypto traders' cryptocurrencies.

Smart-Contract Support

The 1inch limit order protocol is essentially a set of smart contracts, which can work with any Ethereum Virtual Machine (EVM) based blockchain network.

Some of the key features that the protocol offers are extreme flexibility, alongside high gas efficiency that is achieved through utilizing two order types, such as regular Limit order and RFQ order.

  • The regular limit order is an order that gets placed within a centralized 1inch database through the utilization of the 1inch UI. When creating an order limit, users can set a specific price target and terms for the trade occurring. These orders are not sent to any user, and anyone can fill them.
  • The RFQ orders are different types of orders with unique use cases. Specifically, they are dedicated to market makers. Whenever a market maker decides to create multiple RFQ orders and express them with an API, the trading platform will ask the market maker for quotes. At the point in time when the needs are matched here, the market maker receives a signed RFQ order from the market maker.

Tokenomics & Supply Distribution

On the release day of the 1INCH token, the company unlocked 6% of the total 1.500,000,000 (1.5 billion) supply.

The remaining tokens were scheduled to be launched gradually throughout four years, all the way to December 30, 2024.

  • 30% of the total token supply went to community incentives programs.
  • 14.5% went for the growth and the development fund to issue grants and incentivize developers working with the 1inch protocol.
  • 18.5% went to Backers 1
  • 12.2% went to Backers 2.
  • 2.3% went to small backers.
  • 22.5% went to core contributors.

Team & History

1inch was initially introduced at an Ethereum (ETH) development conference ETHGlobal Hackathon in 2019.

1inch is led by Sergej Kunz, the Chief Executive Officer, who previously worked as a software engineer for Porsche, and Anton Bukov, the Chief Technology Officer. He previously worked on the NEAR Protocol.

At the start of the project, the founders created a separate platform for yield farming known as Mooniswap; however, this project has been deprecated since, and they launched 1inch Liquidity Protocol to replace it.

In August 2020, 1inch completed a seed round from Binance Labs, where the project gained $2.8 million.

In December 2020, the project got $12 million in a funding round led by Pantera Capital.

Furthermore, in December of 2021, the project raised $175 million, where one of the leading investors was Amber Group, alongside other venture capitalists such as Alameda Research, Celsius, and Nexo.

All of this would fuel the development of 1inch to the form and functionality that it has today.

Activities & Community

When we look at the activities and community surrounding 1inch, the 1inch Network Telegram Group has over 18,870 members. The Official 1inch Network Discord Channel has over 17,940 members, and the 1inch Network Twitter page has over 1 million followers.

Development Activity and GitHub Repositories

The 1inch Network GitHub is large, with a total of 115 repositories. The stand-out ones and pinned repositories include:

The 1inch Foundation announced they would distribute 10 million 1INCH to the DeFi community as gas cost refunds.

Then on May 27, 1inch Network announced that the 1inch Foundation had extended the gas refund program.

On-Chain Activity

According to data from Cryptorank recorded on July 1, 2022, 1inch had a token transfer count of 5,865, with 1,895 unique receivers.


1inch Network Token Transfers by Date. Source: Cryptorank


However, when we look at the 1inch network statistics from DappRadar, we can see that on July 9, 2022, 1inch had a TVL (total value locked) of $1.83 million, with an adjusted TVL of $2.06 million. It also featured a market capitalization of $17.2 million with an average token price of $0.688 per 1INCH token.


1inch Network statistics. Source: DappRadar

Activities and Partners

References & Reports

References

Market Research

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