In December 2020, the decentralized finance (DeFi) world witnessed a remarkable event. Leading DEX aggregator 1Inch Exchange launched its native 1INCH token, accompanied by an airdrop that rewarded regular platform users. The token debuted at $2 on Binance—a spectacular start for this innovative protocol. But what exactly is 1Inch Exchange, 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 trading without intermediaries. Popular DEXs like Uniswap, Kyber Network, and Oasis each offer varying prices and fee structures. 1Inch solves this complexity by finding the most cost-effective trading routes across multiple liquidity sources.
Key Features:
- Aggregates liquidity from 33+ protocols
- Optimizes for lowest fees, slippage, and gas costs
- Supports cross-DEX "split routing" for large orders
How Does 1Inch Work?
The platform’s algorithm scans multiple DEXs to identify the most efficient swap path. For example, when trading USDT for WBTC, it might:
- Find a direct swap on Curve
- Split the trade between Uniswap and SushiSwap for better rates
- Adjust for real-time liquidity and gas fees
👉 Discover how 1Inch outperforms traditional DEXs
The 1Inch Liquidity Protocol
In August 2020, 1Inch launched Mooniswap (later renamed 1inch Liquidity Protocol), an Automated Market Maker (AMM) designed to:
- Reduce impermanent loss for liquidity providers
- Limit arbitrage profits through dynamic pricing
- Offer higher yields compared to Uniswap
How to Use 1Inch Exchange
Step-by-Step Trading Guide:
Connect Your Wallet
- Supported wallets: MetaMask, Trust Wallet, WalletConnect
- Visit 1Inch Exchange
Select Tokens
- Choose "Pay" (e.g., USDT) and "Receive" (e.g., DAI)
Approve Token Spending
- Opt for "Unlimited" approval to save gas fees
Execute Swap
- Review estimated gas costs before confirming
The 1INCH Token
Tokenomics:
- Type: Governance token
- Total Supply: 1.5 billion (distributed over 4 years)
Use Cases:
- Voting on protocol upgrades
- Staking for rewards
- Fee discounts
Where to Buy 1INCH:
- Centralized Exchanges: Binance, Huobi Global
- DEXs: Uniswap, 1Inch Exchange
👉 Start trading with low fees today
FAQs
1. Is 1Inch Exchange safe?
Yes, as a non-custodial aggregator, 1Inch never holds user funds. Transactions occur directly through smart contracts.
2. What chains does 1Inch support?
Ethereum, Binance Smart Chain, Polygon, Optimism, and Arbitrum.
3. How does 1Inch make money?
The protocol charges a 0.1% fee on trades, shared between liquidity providers and the treasury.
4. Can I participate in governance?
Yes, stake 1INCH tokens to propose/vote on changes.
5. What’s the advantage over Uniswap?
Better rates through multi-DEX routing and lower impermanent loss in its liquidity pools.
Conclusion
1Inch has emerged as a DeFi powerhouse by solving critical DEX challenges—price inefficiency and fragmented liquidity. With its robust tokenomics and cross-chain expansion, it’s poised to remain a top player in the decentralized trading space.
For traders seeking optimized swaps and liquidity providers chasing higher yields, 1Inch delivers unparalleled value in the evolving crypto ecosystem.