1inch Review

What is 1inch Network?

1inch Network is a DeFi platform that operates as an aggregator on various decentralized exchanges across multiple blockchains.

At its core 1inch unites three different protocols to provide the deepest liquidity to its users while giving them access to the most demanded tokens allowing swaps at convenient rates on users’ defined conditions.

1inch Network was created by two developers Sergej Kunz and Anton Bukov as an attempt to code an arbitrage bot during the ETH New York hackathon in 2019. The name of the network was chosen in reference to Bruce Lee’s famous “1inch punch” and is intended to symbolize the efficiency of the decentralized finance industry.

How does 1inch Network work?

1inch Network operates through the decentralized application which integrates three different protocols in order to provide aggregation, liquidity, and limit order services to the platform.

The main element of the 1inch Network is its Aggregation Protocol powered by the Pathfinder algorithm which searches deals across multiple liquidity sources on different blockchains, offering users better rates than any individual exchange. The team behind 1inch claims Pathfinder helps to save up to 40% on gas fees.

1inch Limit Order Protocol broadens the overall flexibility of the network. It is a set of EVM-based smart contracts that can run on any Ethereum-compatible network. The protocol itself charges no fees and lets users pre-set specific conditions on their orders to maximize trading income. Limit Order Protocol also gives users extra RFQ (request for quotation) support enabling them to buy or sell a specific amount of crypto. The common use cases for Limit Order Protocol on 1inch include stop-loss orders, trailing stop orders, or auctions.

1inch has also recently deployed a p2p swaps feature, which enables swapping crypto assets between individual users. P2p trades can be made at any rate the parties agreed upon or at the current market rate, defined by 1inch’s price aggregator.

1inch Liquidity Protocol also enables users to earn passive income by locking their assets into 1inch liquidity pools and earn INCH tokens as additional rewards by staking LP tokens into liquidity mining programs. Anyone can also create liquidity pools and earn rewards.

How to use 1inch?

Before proceeding with 1inch app, users are first required to select the preferred blockchain and connect the wallet. The lists of wallets 1inch supports include Metamask, WalletConnect, 1INCH WalletConnect, Coinbase Wallet, Ledger, Trezor, KeepKey, Portis, and many more.

The main page of 1inch starts with the Swapping section. In the “You sell” field, user needs to select the token to be exchanged from the drop-down list and type in the amount. In the “You buy” field, user needs to select the token to be received from the drop-down list and click "Give permission to swap".  User may also adjust the slippage or gas prices. As the final step the transaction needs to be confirmed by clicking the “Swap token” button and paying the gas fee.

To place a limit order, user needs to switch to the “Limit” section, In the ‘You receive’ field, user needs to enter or select the asset to be purchased from drop-down list, and enter the desired amount.

In the 'Price' field, user needs to enter the price at which the order is to be executed and set the validity period in the ‘Expires in’ field. Once the order is confirmed it will appear in ‘Active Orders’ section.

To become a liquidity provider to the protocol, it is required to navigate to the Pools section, select the token pair to be deposited and their number, click “Provide Liquidity” button and confirm the transaction by paying the gas fee.  Once done, the LP tokens representing the share of liquidity in the respective pool will appear in user’s wallet.  

These LP tokens can be utilized in the 1inch liquidity mining programs. To do so, user needs to navigate to the Farming section, find the pair he/she has just provided liquidity to and click “deposit”, this will show the daily, monthly, and yearly earning to be received in 1INCH tokens. As the final stem user needs to click on “Unlock token” and confirm the transaction in the wallet.

1INCH token 

1INCH is the governance and utility token of 1inch, with a total supply of  1,500,000,000 tokens.

6% of tokens total supply was unlocked on the release date,  December 2020, while the remaining are planned to be unlocked over the period of four years. 1INCH are distributed in the following manner: 30% - community incentives, 22,5% - core contributors, 18,5% - backers 1, 14,5 – growth fund, 12,2% - backers 2,  2,3% - small backers.

Besides Ethereum, 1INCH token is available on Binance Smart Chain where it has been integrated over a bridge with no additional issuance of tokens.

1inch token holders can stake them in order to participate in 1inch’s governance through a DAO. 1INCH stakers can propose changes to the network parameters, take part in voting, and receive governance rewards. 1INCH stakers can decide on rewards and treasury distribution, propose on the network’s parameters, vote on and create proposals.

Is 1inch safe?

1inch smart contracts have been audited by 16 security firms which is claimed to be the highest number for DeFi projects. The full list of audits can be found here.

1inch Foundation is the protocol’s non-profit organization that oversees the ongoing network and community development, as well as implements various research projects, through grants and other capital deployment vehicles. Anyone wishing to apply for a grant can find the application form here.

Anton Bukov, 1inch co-founder was previously involved as a developer with NEAR and Synthetix derivatives liquidity protocols. Sergej Kunz, another co-founder, had worked for Porsche AG in Germany before, but currently is 100% focused on 1inch development. The full list of 1inch contributors can be found here.

Partners

2021 became the year for 1inch Network’s multi-chain evolution. In February, the platform implemented its bridge to Binance Smart Chain, later expanding to some of Ethereum layer-two networks. The Polygon deployment came first in May and was followed by Optimistic Ethereum integration in August. The latest so far is the deployment on Arbitrum, Avalanche, and Gnosis Chain.

1inch Network accrued almost $15 million in its first round of funding and lists Pantera Capital, Binance Labs, Parafi, Alameda Research, Spartan, and other prominent blockchain investors among its stakeholders.

In its December 2021 funding, the network raised $175 million from over 50 investors including ane Street, VanEck, Fenbushi Capital, Alameda Research, Celsius, Nexo, Tribe Capital, and Gemini Frontier Fund.

What's next?

The team is currently developing 1inch Pro, a product suite specifically tailored for the needs of the US market and global institutional investors in accordance with all the regulatory requirements.

Links

https://gov.1inch.io/

https://docs.1inch.io/api/