- High-security level
- Minimal fees
- Price control
- Not for beginners
- No fiat
- Closed for the U.S.
Decentralized Finance (DeFi) is one of the biggest trends in the blockchain industry, and many believe it will overtake the traditional finance world. Some of these most common use cases for DeFi are DEXs (decentralized exchanges), which use smart contracts to let people trade in cryptocurrencies NFTs, and stake their tokens to earn interest without the need for a regulatory authority. Choosing the exchange to suit your needs among a staggering number of cryptocurrency exchanges out there might not seem easy. Our 1Inch review will reveal everything you need to know about the 1Inch exchange, its features, services, trading fees, etc., to help you decide if it’s a suitable exchange for you.
1inch is a decentralized exchange aggregator and liquidity provider, which means it displays the prices and liquidity available on multiple exchanges helping you find the best rates and lowest fees for your trades.
Let’s jump right in!
1inch Pros and Cons
- Top-level Security: No hacking incidents or security breaches were reported.
- No Additional Fees: The only fees you’ll need to pay are gas costs, i.e., Ethereum gas fees, and the network fee. 1Inch exchange won’t charge you additional trading fees, such as withdrawal or deposit fees etc.
- Price Control: The novel AMM Mooniswap allows you to avoid slippage and subsequently take control of your entry price.
- DEX Aggregator: 1inch Exchange ensures high liquidity on your cryptocurrency trades while limiting the exchanges to a single transaction.
- User-friendly Interface: The platform’s interface is straightforward and easy to navigate.
- Challenging for Beginners: 1Inch exchange provides numerous tutorials, but beginner traders might still find the platform somewhat challenging.
- No Fiat Currency: The platform does not support trading in fiat currencies, including fiat deposits.
- Not regulated in the U.S.: The platform is not available for trading in the United States due to stricter regulations.
The idea of the 1inch exchange was born by Sergey Kunz and Anton Bukov, now the platform’s top executives (CEO and CTO, respectively), at the Ethereum developer conference held in New York in 2019. They first launched their own decentralized exchange (DEX) named Mooniswap (a version of UniSwap) before switching to their own liquidity pool and creating the 1INCH DEX aggregator. The creators had extensive experience working for Binance Labs and Pantera Capital. In 2020 the executives launched a Seed round, raising over $2.8 million from Binance Labs and another $12 million in the second funding round led by Pantera Capital.
Notably, Mooniswap was initially designed as a separate platform for yield farming. However, the platform had been deprecated when the exchange platform launched the 1inch Liquidity Protocol.
What Is 1inch Exchange
The 1inch Exchange is a non-custodial DEX aggregator designed to offer the best rates for crypto investors by discovering the most efficient swapping routes from leading DEX providers. The platform divides the exchange amongst multiple exchange sources and checks for their market depths to ensure this. Eventually, a user always gets the best swap fee on the 1inch exchange.
The platform displays the price and liquidity available on multiple exchanges to verify whether you’re getting the best rate. The system accommodates the traders’ needs and finds the best exchange rate across many platforms.
Currently, 1inch exchange sources liquidity over three blockchains: Ethereum, Binance Smart Chain networks, and Polygon, with 78, 41, and 28 separate pools respectively across those blockchains.
How Does 1inch Exchange Work
1inch exchange uses Pathfinder, a proprietary application programming interface (API), to find you the best trading path across multiple markets while taking gas fees into account. It’s a routing algorithm that finds the best possible path for a token swap. It operates on both the Ethereum and Binance Smart Chain networks and supports the Chi Gas token.
Start Swapping On 1inch in 4 Quick Steps
Now let’s introduce the trading process in a few quick steps. However, we’d like to remind you that this content is not investment advice before you start trading. We strongly recommend you do your own research before investing in cryptocurrencies.
Step #1: Connect Your ETH Wallet
The good news is, unlike centralized exchanges, there is NO registration process on 1inch exchange. This leading DEX aggregator lets you link your ETH wallet and begin swapping currencies straight away. 1inch Exchange doesn’t have access to your token; instead, it offers integration with numerous mobile wallets that will store your digital coins.
1inch Exchange currently supports the following cryptocurrency wallets:
Once you have accepted the terms and conditions, you can simply scan the QR code to connect the platform with your wallet.
Step #2: Select the Token
With your wallet linked, you can choose the digital tokens you want to swap from the comparison chart with exchange rates from different DEXs.
NOTE: You might not find the required token in the list for two main reasons. Either the coin you have in mind is not an ERC-20 token, or it’s not whitelisted. If it’s not an ERC-20 token, you can try and look for the wrapped version. For example, Bitcoin’s BTC token is not Ethereum-compatible, but it’s wrapped version, WBTC can be swapped on different exchanges on the Ethereum network.
Step #3: Swap Tokens
When you are ready, you can proceed by clicking ‘Swap Now’:
- Once you choose the best deal for your liking, you’ll notice a “you pay” space to fill. Enter the amount you wish to trade.
- Then fill out the “You receive” space with the token you want to swap for.
- To approve the transaction, click the “give permission” button.
NOTE: Check and double-check before approving any transaction, as the process is not reversible. Once you exchange the funds, you bear the transaction costs.
To unlock your new possessions:
- Press the “infinity unlock” button to permanently or temporarily unlock the token. Consider that while the “infinity unlock” saves on transaction fees and time, unlocking each transaction separately is more secure.
- Go to “Settings” and enable the “partial fill” or reset the “slippage tolerance” gas fee.
- Press the “swap” button to confirm the swap; the 1inch exchange will show you another window with all swap details, asking for a confirmation. Review them carefully, and click “confirm.”
- Confirm the swap from your wallet as well. A bubble will appear in the top right corner, indicating a complete transaction.
Note” 1inch Exchange also allows you to place limit orders. The only thing to remember is that the limit order feature only works with ER20 standard tokens.
As mentioned above, the 1inch exchange is a great option to avoid hefty fees. The platform doesn’t charge withdrawal fees or deposit fees. The only fees you’ll need to pay on the 1inch exchange are the exchange fees and gas fees for your transactions. To compare, Uniswap charges a 0.3% flat fee, while Balancer charges a variable fee, depending on which liquidity pool you’re entering. The exchange generates revenue from the swap fees that go to the liquidity sources and from positive slippage of orders.
CHI Gas Tokens
The Chi Gas token is an ERC20-standard token used on the 1inch exchange to pay transaction costs. Chi is pegged to the Ethereum network gas price. When the gas price is low, the price of Chi is also low, and vice versa. Users can mint or buy CHI gas tokens on 1inch directly and then use the tokens to pay for their transaction fees. Once you have the token available in your wallet, you can activate it to reduce the gas cost of future transactions.
The CHI gas token holders get extra discounts on their orders and yield farming.
1inch Governance Token
The 1inch DAO (Decentralized Autonomous Organization) governs the network parameters, enabling 1INCH holders to vote for key protocol parameters and collect governance rewards. 1INCH is the platform’s native instant governance token that serves as both a utility token and a governance token. Holders of the 1INCH token, no matter the amount, can use their voting power to decide on various parameters of the 1inch protocol, including the governance reward, the swap fee for the liquidity protocol, the price impact fee, etc. It’s also possible to earn by staking 1INCH tokens and supplying liquidity to the 1inch liquidity pools. When you’re providing liquidity, you need to deposit an equal value of each token into the pool. Users who provide liquidity for pools are rewarded with some LP tokens depending on the amount they deposited. They can reinvest these tokens back into the pools or utilize them for other activities.
There is a total supply of 1.5 billion 1inch Exchange tokens, and 6% of the total supply is in circulation. 30% of this is reserved for its community and will be distributed through airdrops. The 1INCH foundation planned to distribute the total supply within a 4years period. The other 14.5% token supply will go to develop the community, while the remaining 55.5% distributed to team members and early investors. 1INCH airdrop exercise was a part of the token launch to create traffic around the 1INCH exchange. All the Ethereum wallets related to 1INCH during the airdrop got the 1INCH tokens. Check the 1inch price, market cap, circulating supply, trading volume, historical statistics, etc., on CoinStats, one of the best crypto platforms around.
As a trader, you are eligible for a 1inch Exchange token if you meet one of the three conditions set by the platform:
- You should have executed at least one trade before 15th September 2020
- You should have completed at least four trades in total
- These trades should be worth a total of at least $20.
The exchange’s governance process goes through 5 phases – from Discussion to Implementation. The “DAO governance decisions can range from allocating Treasury Funds for a particular proposal” to deploying a new protocol on the 1inch network.
Now that you are familiar with the 1inch exchange and its functions let’s address the security concerns.
1inch Exchange Security
The important thing to note is that as a non-custodial DEX aggregator, the platform doesn’t hold any user’s funds directly on the platform, and everything is done via smart contracts. Moreover, the 1inch exchange has a reputation of not suffering from security threats or hacks.
That said, security breaches might happen in your wallet, so make sure to choose a secure wallet for storing your currencies.
Remember to do your own research before signing up for any sort of trading and bookmark the right websites not to fall for fishy imposters.
As with most decentralized exchanges, the platform doesn’t have customer support. However, the platform’s presence on social media, such as Telegram, Facebook, Instagram, Twitter, Reddit, etc., saves the day, as there are pretty large communities built around 1inch. The exchange also provides support via the official [email protected] email, in addition to the 1inch Help Center Telegram group.
1inch exchange occupies a unique position among decentralized exchanges, as it offers liquidity mining programs and compares exchange rates between multiple platforms to provide its users the best possible options.
Moreover, the exchange has an intuitive user interface and provides an array of opportunities, such as staking, supplying liquidity, earning governance rewards, etc.
Hopefully, this CoinStats 1inch exchange review was helpful and answered some of your questions concerning the platform, its features, and services. You can find an answer to what is DeFi and learn more about cryptocurrencies, crypto portfolio trackers, etc., from articles published on our website.
Frequently Asked Questions
1. Is 1inch a Good Investment
If you think the 1inch platform has a future in the competitive DeFi world, you can purchase 1inch tokens as long-term investments and for their voting power, among other perks. Yet, we strongly urge you again to do your own research before making any cryptocurrency investment.
2. Can I Use 1inch in the United States
No. As of early 2022, 1inch is not available for U.S. users. As mentioned above, the regulations in the United States are stricter than in some other countries; thus, several platforms are out of reach.
3. How Do I Start Trading on 1inch if I Don’t Have a Crypto Wallet
If you don’t own a crypto wallet, you should start trading on a platform that supports fiat currencies. Pick one of the major centralized exchanges, follow the instructions, and you can be a proud crypto owner in no time. NOTE: for 1inch trading, you have to acquire an ERC-20 token. Once you do that, obtain a crypto wallet acceptable for 1inch (see the list above) and transfer your freshly swapped crypto to your new wallet.
4. Can I Buy 1inch Token Through Coinbase
Yes, 1inch tokens are available on Coinbase for direct purchase.