1inch (1INCH) – the one-punch DEX aggregator

The world of decentralized finance (DeFi) can be very overwhelming at first given the options across numerous DeFi platforms and different blockchain networks. For example, you may want to buy a particular cryptocurrency, but are unsure of which platform to use given the varying exchange rates and available liquidity across different decentralized exchanges (DEXs). The question is how can you arrive at the best prices without having to go through and read up on each option one by one.

Luckily during an Ethereum (ETH) hackathon event in 2019, two developers, Serjez Kunz and Anton Bukov, came up with 1inch to solve this problem. 1inch is an Ethereum-native protocol that can help solve this problem by finding the best or cheapest price of a cryptocurrency across multiple decentralized exchanges. As a DEX aggregator, 1inch uses an algorithm capable of scanning through different DEXes to help you swap or trade the token you want in the most cost-efficient manner, granting access to liquidity pools, reducing slippage, and allowing users to do more complex trades.

To allude to the platform’s efficiency, the protocol’s name reference’s Bruce Lee’s famous “one-inch” knuckle punch–an explosive technique that requires very little movement but with maximum impact. 

1inch’s “Pathfinder” algorithm basically scans through and aggregates data from dozens of liquidity sources across Ethereum-compatible blockchains, including Binance Chain (BNB), Avalanche (AVAX) and Polygon (MATIC) among others, to help you get the best prices. It does so by scraping through data on trading routes and gas fees to help minimize the cost of any trade or transaction.

For example, if you wanted to swap your Ethereum (ETH) for USDC using 1inch, you will simply have to go to the 1inch app or website where you will connect your Ethereum-supported wallet (i.e. Metamask). After this you have to input the amount of Ethereum that you want to swap for USDC. Once you input that, 1inch will automatically find you the best conversion rates with the lowest possible transaction fees.

The 1INCH token basically has two use cases. The first and primary use case is a governance token. It allows users and 1INCH token holders to stake their tokens to earn staking rewards from the network, as well vote on important decisions and changes to the protocol such as future updates and fund allocations.  

The secondary use case for 1INCH is as a utility token through the 1inch “Liquidity Protocol” where it is used as a connector to achieve high-efficiency routing.

1INCH’s circulating supply is currently at 621 million out of the 1.5 billion in total supply with a market cap of $329 million as of November 2022. The rest of the supply is set to be unlocked in vesting stages, with all of the supply being released by December 2024.

Of the total supply, 30% were allocated as community incentives, 14.5% for the network growth fund, 22.5% to the project’s core contributors, and the remaining 33% for network backers. 

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DISCLAIMER: The statements in this article do not constitute financial advice. PDAX does not guarantee the technical and financial integrity of the digital asset and its ecosystem. Any and all trading involving the digital asset is subject to the user’s risk and discretion and must be done after adequate and in-depth research and analysis.