1inch is a DEX aggregator. That is, it searches a few decentralized exchanges for the best pricing and reroutes its clients' trades between them to guarantee they are getting the best prices. They also have their own crypto coin on the market. According to 1inch, as of June 2021, customers will have access to over 50 liquidity sources on Ethereum, 20 on Binance Smart Chain, and 8 on Polygon. It uses DEXs like Uniswap, 0x, and Balancer, as well as 1inch's proprietary liquidity protocol, formerly known as Mooniswap. Sergej Kunz and Anton Bukov established 1inch in 2019 during the ETHNewYork hackathon. Since then, 1inch has received around 15 million USD in financing from firms like Binance Labs, Galaxy Digital, and Pantera Capital.

How does it work

Assume you wish to purchase some Wrapped Bitcoin (a synthetic form of Bitcoin) on a decentralized exchange using Ethereum. When you look at other DEXes, you'll see that the pricing and fees vary.

1inch's algorithm identifies the cheapest way to execute the deal by utilizing all of the available exchanges and liquidity protocols. The cheapest approach to execute this deal may require transferring your Ethereum across many protocols and currencies before arriving at Wrapped Bitcoin. The benefit of doing so is that you may be able to purchase Wrapped Bitcoin at a lower cost.

1INCH token

1inch issued its own cryptocurrency, the 1INCH token, on Christmas Day of 2020. It is a "governance token," which means you may use it to vote on how the 1inch platform is run. This was dubbed "instant governance" by 1inch.

In an airdrop near the end of 2020, 1inch issued a large number of tokens. You can get 1inch tokens by donating money to 1inch's own liquidity mechanism (previously known as Mooniswap) or by using it before 24th of December 2020. The primary way to obtain 1INCH coins is to provide liquidity to the 1inch liquidity platform. This entails staking currency that others can use to place deals. You may also earn other cryptocurrencies in this manner.

Recent improvements

With the release of 1inch's V2 platform in late 2020, everything became faster and cheaper, with certain more sophisticated trades added to keep costs low, such as rerouting money designated as collateral for loans on decentralized lending protocols Aave and Compound. It was followed in March 2021 by the release of 1inch's v3 aggregation protocol, which promised to cut gas expenses by 30% compared to 1inch v2.

In February 2021, one of 1inch's seasonal marketing efforts took place, with the exchange airdropping 6 million 1INCH tokens to Uniswap customers who had never utilized its platform. The same month, 1inch added support for Binance Smart Chain, with Polygon support coming in May 2021. The project has also grown beyond its initial goals of providing a DEX aggregator, with Mooniswap AMM being superseded in December 2020 by the fully integrated 1inch Liquidity Protocol. The 1inch Wallet app for iOS was released in April 2021, incorporating the online app's feature set into a mobile wallet.