The 1inch protocol is a decentralised exchange (dex) aggregator. Dex is a peer-to-peer (buyers and sellers are connected directly) marketplace where cryptocurrencies can be traded without an intermediary who controls the coins. A dex aggregator allows users to find the best prices across the market by accessing financial liquidity from multiple dexes.
Imagine you’re booking a flight from New Delhi to Mumbai on the 25th of July. You could go to an airline or travel booking website to book a flight on that date. But if you wanted the best possible prices, you’d use a search engine like Google to look at different prices offered by all websites and airlines for that specific date and then choose the one with the lowest price. That is what a dex aggregator does in the crypto world.
1inch is a fork of the 0x protocol. A fork means it uses the structure of the 0x protocol as a fundamental basis of its own programming. The 0x protocol is one of the largest decentralised exchanges known for its quality and efficient code.
The 1inch protocol manages its ecosystem using a unique native cryptocurrency called the 1INCH token. The 1INCH cryptocurrency token can be held or spent to generate trading profits while you’re on the go. Additionally, the 1INCH token acts as the governance token – holders can make decisions and shape the future of the 1inch protocol.
1inch by the numbers (as of July 15, 2022):
In May 2019, Serjez Kunz and Anton Bukov, two Russian developers with backgrounds in smart contract security, founded The 1Inch network. The idea for 1Inch was created at a hackathon in just over 60 hours in New York City.
Noticing the growing popularity of dexes, the developers decided to create an aggregator so users would not have to fiddle around with multiple services. 1inch was the first dex aggregator ever.
Fast forward to today, it is one of the fastest-growing DeFi products.
Decentralised exchanges (aka dexes) offer an alternative to traditional centralised exchanges. On a DEX, users can transact tokens directly with each other without the need for an intermediary. 1inch is a decentralised exchange aggregator that sources prices from multiple DEXes to find the best prices for users.
The 1inch platform uses a smart contract that automatically finds the best prices for users. The smart contract searches for the best prices from various exchanges. All trades are made directly between users on the platform, and the platform does not hold any user funds. The 1inch platform is also trustee-less, meaning that users do not need to trust any central party with their funds.
1inch will aggregate across various liquidity pools and recommend the most effective way to trade tokens rather than exchanging them from a single liquidity pool or the pool of accessible transactions on a platform of a DEX.
As a DeFi platform, 1inch network enables its users to vote on and suggest modifications to the ecosystem for improved usability and eco-friendliness. You can also exchange 1INCH tokens for other cryptocurrencies to earn more profit.
The 1Inch network is a system that allows you to compare cryptocurrency prices and optimise crypto trades from different dexes to find the best deals without going through each exchange manually.
The platform is unique because 1inch splits the order and uses APIs to find the best possible route for a token swap. This way, the 1inch protocol aims to offer the best possible rates to users. An API (Application Program Interface) is a collection of protocols and software-building applications.
How exactly does 1inch manage this? The network collects real-time price data from various dexes and then accordingly allows traders to access the most optimal trading price, all from a singular platform.
To ensure fast, protected trading operations in cryptocurrency, the network uses multiple protocols such as:
This protocol sources liquidity from various exchanges and splits a single trade across multiple exchanges to offer the best rates. 1inch uses an algorithm that finds optimal routes across different liquidity sources.
This is an Automated Market Maker (AMM), which is a mechanism used by DEXes that allows two users to trade assets without an intermediary automatically.
This final protocol used by 1inch is a limit order system for users wanting to trade crypto tokens at specific prices. It features no fees, dynamic pricing, and multichain crypto support, making it flexible and usable across different blockchains.
If you trade large amounts of tokens, it may be challenging to analyse all available liquidy (across DEXes) to fetch the best price. Also, price quotes often fluctuate as per the given liquidity. Now, when trading a considerable size, every bit of saving can be magnified! 1Inch aims to solve all of these problems in a straightforward interface.
Some of the key benefits of the 1inch platform include:
1inch is not decentralised, meaning no central figure or entity controls its working. Instead, significant changes are approved by the 1INCH token holders (think of them as shareholders with greater power).
The smart contract on the 1inch platform automatically searches for the best prices from various exchanges. This ensures that users always get the best possible price when trading on the 1inch platform.
The 1inch platform is trustless, meaning that users do not need to trust any central party with their funds. All trades are made directly between users on the platform, and the platform does not hold any user funds.
The 1inch platform is decentralised, meaning it is not subject to censorship or control by any central authority.
The 1inch platform uses state-of-the-art security features to protect users’ funds and personal information.
1inch crypto can be bought and sold on a variety of cryptocurrency exchanges. They can also be bought and sold directly from 1inch by interacting using your cryptocurrency wallet.
The 1inch token has seen significant growth since its launch in 2019 and is currently trading at around $0.67(Rs 53) as of 15 July 2022. The token has been showing prices of sustained growth with a 9.5% increase in price over the last 24 hours and an overall increase of 9.8% this past month.
According to experts, the 1inch token looks like a solid investment during this cryptocurrency downturn since it currently offers a variety of trading options and has the potential to appreciate in the future.
The 1inch protocol was an important invention in the DeFi space that used a bunch of different protocols to create the first-ever decentralised exchange aggregator. The network allows users to find the best possible prices for their crypto transactions. The protocol is still evolving and innovating. The 1inch crypto could be a good investment to hold even as the stock market and crypto industry are struggling. However, caution is advised as with every investment in the cryptocurrency space.
Ans: The 1inch protocol is the dex aggregator that users interact with to access the best possible cryptocurrency trading prices. The 1inch token is the native cryptocurrency of the protocol.
Ans: The 1inch token is hosted on the Ethereum blockchain. However, the 1inch protocol works with multiple chains like Ethereum, BNB, Avalanche, Polygon, Arbitrum, and more.
A simple analogy to help understand this is a program running on Microsoft Windows, where the 1inch token is the program and Ethereum is Windows. This means the Ethereum blockchain is the basic infrastructure that allows 1inch to run. While the software itself works for anyone using any other operating system or chain.
Ans: The protocol was trending because of a flurry of recent developments, including integration with other crypto applications like the D’CENT wallet and the derivatives platform called Opium. The solid and continued support shown by the 1inch developers, as well as its large user base caused mini price rallies this past month.
Ans: For any exchange market, whether it’s equities, commodities, currencies, or cryptocurrencies, prices and transaction fees vary significantly. The decentralised nature of cryptocurrencies allows for exchange markets to be decentralised as well.
This means that by using decentralised exchanges that cut out middlemen and subsequently decentralised exchange aggregators, traders and investors can access even lower prices. Instead of manually checking each and every exchange or decentralised exchange, dex aggregators allow traders to directly access the best possible price across exchanges.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
Top 10 Cryptocurrencies to Invest In 2023 – Best Cryptocurrencies In IndiaCryptocurrency is a digital currency which can be used to purchase goods and services without the u... Read More »
8 Top Crypto Exchanges in India – Best Crypto Exchanges 2023Crypto assets are attracting more and more traders to explore the possibilities of their rising mar... Read More »
What is Crypto Airdrop – Its Types, Taxation, Benefits and How Does it Work?Crypto Airdrop is among one of the key strategies that have grown extremely popular since 2017 in t... Read More »
What is Pi Cryptocurrency: Network, Value, Price and FutureThe Pi Coin cryptocurrency has made the mining of digital currencies accessible for crypto enthusia... Read More »
What Is Tax On Crypto In India And How It Is CalculatedCryptocurrencies are decentralised digital currencies or assets based on blockchain technology, whi... Read More »
What Is Internet Computer Protocol (ICP) – Its Price, Investment Benefits And UsesThe ICP crypto is the native token of the ICP Blockchain network, which is used to reward the users... Read More »
What Is A Crypto Mining Rig – Its Setup, Types and How To Build OneA Crypto mining rig is a customised personal computer. It features all the essential elements of a ... Read More »
Polygon(MATIC): How Does It Work, Benefits and Price PredictionPolygon (MATIC) is a scaling solution for Ethereum, and MATIC is the name of the token that powers ... Read More »
What is GALA Crypto: Review, Benefits and How to Buy GALA Coins?GALA is an Ethereum-based cryptocurrency that powers Gala Games, a play-to-earn gaming platform. Th... Read More »
What is Bullish Engulfing Pattern – its Importance in TradingTrading in stocks is challenging. That’s why traders use several technical analysis tools, like c... Read More »
What is Staking Crypto and How does It Work?Staking crypto means pledging your cryptocurrencies to the blockchain network to confirm trans... Read More »
What is Cosmos (ATOM) Crypto and How to Invest in It?Cosmos is an ever-expanding ecosystem of many collective independent blockchains. Known as the “i... Read More »
Top 10 Chit Fund Schemes in India in 2023Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »
10 Best Gold ETFs in India to Invest in March 2023Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »
10 Best Demat Accounts in India for Beginners in 2023Creation of Demat accounts revolutionised the way trades were conducted at the stock exchanges.&nbs... Read More »
20 Best Index Funds to Invest in India in March 2023What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »
Best Arbitrage Mutual Funds to Invest in India in March 2023Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »
10 Best SIP Plans in India to Invest in March 2023What is SIP? SIP or Systematic Investment Plan is a method of investing a fixed amount in ... Read More »
10 Best Corporate Bond Funds in India to Invest in March 2023Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »
10 Best Bank for Savings Account in India 2023 – With Interest RatesSavings account is a type of financial instrument offered by several banks. It lets you safely depo... Read More »
All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
Start Small. Dream Big.
Start your Investment Journey with just ₹10