Topics Altcoins
Bybit Learn
Bybit Learn
Intermediate
10 de ene de 2022

Simplified: What Is 1inch Network (1INCH)?

Decentralized exchanges (DEXs) are a major component of the DeFi world, opening up a ton of opportunities for crypto traders and investors. With DEXs, you can put your idle crypto assets to work and earn consistent passive income. Since decentralized exchanges aren’t governed by a third party, information such as their order books and their inflow/outflow of funds remains private.

Although many decentralized exchanges like SushiSwapRaydium and Uniswap are reliable, no two DEXs share the exact fee structure or sell cryptocurrencies at the same prices. For instance, the price of Bitcoin isn’t always the same on Uniswap as it is on SushiSwap. In fact, this concept of trading price differences has a name — it’s known as arbitrage trading

Due to price differences, finding the best exchange rates for your crypto tokens can be challenging since time and effort are required to manually compare rates across DEXs. Failing to find the right DEX could cost you in potential returns as well. 

What if a platform were to offer the best possible price on your tokens by taking into consideration data from the top DEXs? In this article, we’ll discuss the 1inch Network — a DeFi aggregation platform that tackles this issue. 

What Is 1inch Network?

1inch was founded in August 2020 by DeFi developers and enthusiasts Sergej Kunz and Anton Bukov, who both have strong backgrounds in smart contract auditing. Actually, the 1inch Network was created and presented in the ETHNYC hackathon in 2019, before its official launch. At its core, 1inch is a DEX aggregator which offers the best possible prices on your crypto across major DEXs.

Currently, the 1inch aggregation protocol facilitates transactions across five different networks: EthereumPolygon, Binance Smart Chain, Arbitrum and Optimism. In less than three years, since 1inch’s inception, over 1.6 million users have placed trades totalling $11.7 million on their platform.

What Is 1INCH?

1INCH is the native token of the 1inch Network. It was launched by the 1inch Foundation — a nongovernmental organization (NGO) that governs the entire 1inch ecosystem. 1INCH is a governance and utility token. As a holder of this token, you get to be involved in the future direction of the 1inch platform. At the end of 2020, the company distributed many 1INCH tokens in a highly successful airdrop.

How 1inch Works

To find the best possible exchange rate for your crypto tokens, 1inch Network has adopted an innovative protocol that automatically splits trades placed by users. Subsequently, the tokens are swapped in parts at the best possible rates on different DEXs. 

In a matter of seconds, the 1inch algorithm enables the scanning of multiple liquidity pools to find the one that provides the best returns. The 1inch proprietary protocol combines multiple arbitrage bots with complex algorithms to find and match trades.

With the 1inch aggregation protocol, you can swap your tokens on five different networks at the lowest possible prices. The protocol also burns gas tokens inside the transactions to make them cheaper than those of any other protocol.

Key Features of 1inch Network

Below are three of the key features of the 1inch Network.

Routing

Using an innovative method called routing, the 1inch platform is deployed via an algorithm known as Pathfinder. This algorithm parses all the possible options within the liquidity pool and autonomously routes a client’s trades through the most cost-effective path.

Multi Path Swaps

The 1inch Network is capable of performing multi path swaps, occasionally swapping the source token to its destination over multiple paths to get an even cheaper rate. This feature can’t be found on any other DeFi aggregation protocol. 

Unique Governance

The 1inch community manages the network with a unique process known as

. 1INCH holders have the right to vote for key protocol parameters, and can earn multiple rewards by doing so. It’s easy for community members to participate and benefit from the process. Unlike with many other governance protocols, voting periods on the 1inch Network aren’t lengthy.

1INCH Tokenomics

Note: figures below are accurate as of this writing, and are approximated up to two decimal places.

Total Supply — 1.5 billion 1INCH tokens

Circulating Supply — 438.4 million

Market Capitalization — $1.01 billion

Total Value Locked (TVL) — $32.6 million

24-Hour Trading Volume — $164 million

Price — $2.30 per 1INCH

Pros and Cons of 1inch Network

Pros

  • The 1inch Network has strong backing in the industry. Notable investors behind this project include Binance Labs, Pantera Capital and Galaxy Digital.
  • Compared to other platforms, the 1inch Network is cheaper to use, with network fees charged only for withdrawal of cryptocurrencies. For crypto swaps, transaction fees (e.g., gas fees) may be charged, depending on the DEX used. The fees aren’t charged by the 1inch Network itself.
  • So far, the 1inch Network has neither been hacked nor faced any security breaches.
  • The platform offers high liquidity levels to its users, and orders are filled faster than with many other DeFi aggregators.

Cons

  • The platform is designed for individuals experienced in the fields of crypto and DeFi. Therefore, novice traders might find navigating the platform challenging.
  • The platform requires users to hold cryptos to access their services. Also, 1inch offers fewer deposit options than other platforms in the market. 

Is 1inch Network (1INCH) a Good Investment? 

The value of the 1INCH token has appreciated by over 800% since its inception in December 2020, with the token registering its current ATH of $7.87 in May 2021. Although the price of 1INCH has mostly been on the decline over the past month, experts believe it has great potential. According to analysts at CoinMarketCap, the token could surpass its current ATH to reach $10 over the short term.

Buying 1INCH

You can purchase 1INCH on many notable cryptocurrency exchanges. One of the fastest and easiest ways to obtain this token is by using the Bybit exchange. Simply follow the steps below.

Step 1: If you have an account with Bybit, please skip to Step 2. If you’re a new user, follow the simple sign-up procedure. Then visit the official Bybit website and click Register in the top right-hand corner. Provide a few details requested (such as your email address) and create a secure password. Once done, click Continue and verify your account using the code sent to your registered email address.

Step 2: The 1INCH token is paired with the most popular stablecoin — USDT — on the Bybit exchange. You can acquire USDT in your Bybit wallet by transferring your existing USDT from another wallet or exchange, or by purchasing USDT with Bybit using various crypto tokens. If you want to buy USDT using fiat money, visit the Buy Crypto page, enter the number of USDT tokens you want to buy, and complete the transaction using a method such as credit or debit card.

Step 3: Once the USDT tokens are reflected in your Bybit wallet, visit the Spot Market. Click on the drop-down menu and search for 1INCH. Enter the number of 1INCH tokens you want to acquire, and click Buy 1INCH. You can do this by placing a limit, market or conditional order. Once your order is filled, your tokens will be transferred to your Bybit wallet. 

Source: Bybit | 1INCH/USDT

Step 4: Bybit offers custodial wallet services for its users. When you store 1INCH tokens in your exchange wallet, you’re essentially using the exchange’s hot storage. Alternatively, you can transfer your 1INCH tokens to a cold wallet. We recommend storing your tokens in a hardware wallet for maximum security.

Buy 1INCH on Bybit now!

Closing Thoughts

The 1inch Network’s protocol offers a great crypto experience and adds considerable value for users. Apart from finding the best possible exchange rates for your tokens, the platform also contributes to the DeFi space by accelerating transparency and decentralization. By offering rewards through an innovative governance model, the 1inch Network is a pioneer in reshaping the way decentralized protocols are managed.