What is 1inch Crypto – How Does it Work and How to Buy it?
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.
Example:
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):
- Price: $0.670928
- Price in INR: Rs 53.999
- Market Cap: $369,498,456
- Market Cap Rank: #107
- 24 Hour Trading Vol: $67,233,892.
- Total Value Locked (TVL): $6,558,183
- Circulating Supply: 559,072,205
- Total Supply: 1,500,000,000
Who Created 1inch Crypto?
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.
How Does 1inch Crypto Work?
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:
1. Aggregation Protocol
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.
2. Liquidity Protocol
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.
3. Limit Order Protocol
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.
What are the Benefits of 1inch Crypto?
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:
1. Decentralised
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).
2. Best Prices
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.
3. Trustless
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.
4. Decentralised
The 1inch platform is decentralised, meaning it is not subject to censorship or control by any central authority.
5. Secure
The 1inch platform uses state-of-the-art security features to protect users’ funds and personal information.
How to buy 1inch Crypto in India?
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.
1inch Price Analysis
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.
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Final Word
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.
FAQs
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.
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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.
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