1inch (INCH) – The DeFi/DEX Aggregator

Decentralized exchanges (DEXes) are one of the most important use cases for Decentralized Finance (DeFi) – the crypto industry’s fastest-growing trend that promotes financial services built on blockchain infrastructures to cut intermediaries. DEXes came along to build on the promise of true decentralization, enabling traders to have direct relationships, full control over their crypto funds and benefits from lower transaction fees.

Today, traders can explore many DEXes that attract users with lower fees and greater liquidity, but what if you could get the best of all DEXes from a single interface? This is what 1inch does – it is a DEX and liquidity aggregator that lets you trade cryptocurrencies across multiple DEXes, allowing you to pick from a wide range of digital assets and trading options.

What is a DEX?

For those unfamiliar, DEXes are cryptocurrency exchanges that are not managed by any centralized authority, as is the case with common crypto exchanges. Thus, these exchanges are non-custodial, meaning they don’t keep users’ funds, allowing traders to swap tokens only by connecting their wallets.

Since DEXes don’t maintain order books, how do they ensure liquidity? The answer lies in their status as Automated Market Makers (AMMs). Basically, this is an innovative approach to let traders interact on-chain without order books thanks to liquidity pools. These are pre-funded pools that, as a rule, contain a pair of tokens to cover both sides of trades.

The liquidity pools are maintained by liquidity providers, who get incentivized for locking their crypto holdings. The trading fees of the platform are distributed fairly to all contributors to liquidity pools.

This is how most DEXes work, although their pools vary in structure, and 1inch helps users discover the best exchange rates at the lowest possible fees.

How Does 1inch Work?

1inch is an ecosystem that includes the 1inch.exchange, which is a DEX aggregator, as well as the 1inch Liquidity Protocol, previously known as Mooniswap.

The 1inch network relies on smart contracts to reroute the trades between various DEXes, be it Uniswap, Sushiswap, Balancer, Curve, or Matic. Thus, 1inch leverages the best gas prices for transactions on various blockchains, such as Ethereum, Binance Smart Chain (BSC), Polygon, and Optimism.

The 1INCH Token

At the end of 2020, 1inch launched its own token called 1INCH. It acts as a governance token, letting users vote on major updates and proposals related to the platform’s roadmap.

The main way to obtain 1INCH is by providing liquidity to the 1inch Liquidity Protocol. To do this, you have to stake cryptocurrencies so that other users could leverage the liquidity when placing trades.

The alternative way to obtain 1INCH is to buy the token on digital asset platforms like SMART VALOR – the authorized crypto investment platform that provides users with the opportunity to get exposure to the DeFi sector.

1inch was developed in 2019founded by Sergej Kunz and Anton Bukov two years ago during ETHNewYork’s hackathon. It has raised millions in funding from institutional investors like Galaxy Digital, Pantera Capital, and Binance Labs.

1INCH to USD Chart. Image via coinmarketcap.com

As of November 3, 2021, 1INCH ranks 125th among cryptocurrencies, with a market capitalization of $805,626,967. The token had its All Time High (ATH) in June 2021 with a market value of $0.4933. At present, the price is around $4.47.

There is much room for growth as the token comes with many incentives on the 1inch network, and the DEX aggregator may experience increasing demand thanks to its unique position in the DeFi space.