Coinranking
What is 1inch Token?
The 1INCH token has a rather unusual name but nothing about it should be underestimated.
The name 1inch was inspired by Bruce Lee’s one inch punch. It was so impressive it was said to be able to floor an opponent in an instant.
1INCH is the governance token of the DEX (decentralized exchange) aggregator and an AMM (Automated Market Maker), 1inch.
1inch uses smart contracts to find the most efficient routes to swap tokens in terms of price, liquidity, slippage, etc. in decentralized exchanges.
Quick Facts
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1inch is a DEX aggregator that finds the best swap routes for crypto traders.
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1inch tokens were airdropped to selected wallets and users.
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1inch is also an AMM (Automated Market Maker) and a DEX.
There are two categories that cryptocurrency exchanges can fall into which are centralized (CEX) or decentralized (DEX).
Centralized Exchanges (CEXs)
These exchanges include Binance, Crypto.com and Kraken. Exchanges use order books which are used to match sellers with buyers on the market. Cryptocurrencies are held in an exchange-based wallet.
You can place a market order and the order will execute instantly at the current price. You can also create a limit order so the order would execute at the price you had set.
CEXs have a middleman for instance, Binance which is the company that regulates these transactions for the buyer and seller.
CEXs generally have greater liquidity as it seems to be a more popular option at this point with cryptocurrency holders.
They are able to unify all trading activities into one which improves user experience for the crypto enthusiasts.
However, this also means allowing the CEX to take control of your private keys and being highly regulated.
Decentralized Exchanges (DEXs)
In DEXs , self-executing smart contracts are used to create liquidity pools which then help with executing transactions. This would mean there is no middle man involved in the transactions.
DEXs provide better autonomy to the crypto holders as they are in charge of their private keys and not the exchange.
However, the downside to DEXs is that they lack liquidity. Without order books and a central custodian, DEXs use an AMM (Automated Market Maker) to process transactions using liquidity pools.
The pools specify the conditions for each trading pair. Gas fees may be high on DEXs due to these specifications and may rise during higher congestion times.
This could have contributed to the DEXs lack of popularity as compared to CEXs.
1inch Aggregator Aims To Reduce Slippage
Slippage happens when insufficient trading volume results in purchasing a token or coin for more than it was intended.
It could also result in the seller having to sell their cryptos for less than intended.
This could happen if for instance, a buyer wants to get 1000 ETH at $2000/ETH. However, on the DEX, there is only 500 ETH that is being sold at that asking price. As a result, the exchange moves to the next sell order priced at $2500/ETH.
So the buyer has now overpaid for 500 of the ETH by an extra $500 per ETH.
This is less likely to happen in a CEX because the liquidity is higher and if a limit is placed, the order would not execute at a much higher or lower price.
1inch uses advanced algorithms to search over 33 different liquidity protocols to find the most efficient swap routes for your order. It searches for the lowest prices traders can use to swap their tokens.
The 1inch protocol also buffers price volatility across many DEXs by increasing liquidity with the launch of its v2 protocol.
1inch Works To Find You The Best Deals
Let's say you need to buy some Shiba Inu tokens using Ethereum on a DEX. Different DEXs will list different prices for the Shiba Inu tokens.
If you place the trade on the 1 inch platform, the algorithm will show you the cheapest and most efficient way to trade with multiple exchanges and liquidity protocols.
The route that is most efficient could be to switch between several exchanges or even swap different currencies before it ends up with the Shiba Inu tokens you wanted.
In the end, you end up swapping Ethereum to Shiba Inu at the cheapest price with the most efficient method.
Anyone can place a trader directly through 1inch and the algorithm automatically swaps it for you.
There is no need to visit multiple exchanges or currencies on your own as the platform does it for you!
1INCH Token Was Airdropped On Christmas
The 1INCH token was launched on Christmas day in 2020. The token is a governance token and thus, used for voting on future plans of the 1inch platform.
This is called “instant governance”.
1inch is still distributing their tokens till date under certain criterias. For instance, you may have to be a Uniswap user or be an early user of their DEX, Mooniswap.
However the main way to earn 1 INCH tokens is by providing liquidity to their protocol. This involves staking cryptocurrencies into liquidity pools so that other users are able to trade with the liquidity pool.
Users who stake are rewarded with 1INCH tokens.
Co-Founders Who Met On A YouTube Channel
Sergej Kunz and Anton Bukov, co-founders of 1inch, met in a rather unexpected way. Sergej had a Russian Youtube channel called CryptoManiacs. On this channel, he did security audits of smart contracts and live streamed his findings.
On one of these livestreams, Anton Bukov had joined in after being introduced to it by a friend. The two developers hit it off immediately and Anton became a co-host for Sergej’s channel for the next six months.
Following that, both took part as a team in several hackathons and won many awards. This had gained them a reputation in the crypto space.
In May 2019, Sergej and Anton developed a DEX aggregator solution at a hackathon in New York City.
The project only won a minor prize in the hackathon but became the foundation for 1inch.
How Can I Use The 1inch Platform?
Step 1
Open up the main exchange page on a web browser and connect a browser based wallet like Metamask.
Step 2
Say you want to trade Ethereum for Shiba Inu. Select ETH under “you sell” and SHIB under “you buy” section.
Step 3
Ensure that there is enough ETH in your connected wallet to perform the transaction and cover additional gas fees.
Step 4
Once confirmed click swap and then you’re done!
How Can I Buy 1INCH Tokens ?
1INCH can be bought on a cryptocurrency exchange in just a few easy steps:
1. Compare cryptocurrency exchanges
1INCH is listed on most exchanges and is currently listed as a top 100 coin by market capitalization. Look for important features that the exchange provides such as 24-hour customer support, low fees or ease of use. Some exchanges you can use include:
2. Create an account
Verify your email address and identity and simply just open an account. Make sure you have a photo ID and phone ready.
3. Make a deposit
Once the account is opened, you can deposit fiat currency in USD directly from a bank account, credit card, or debit card which are widely accepted.
4. Buy 1INCH
Once you have the funds in your account, find the section and buy 1INCH. Choose an amount and price you are willing to pay. Once the 1INCH tokens are purchased, you can transfer them to your wallet.
How To Sell 1INCH for USD?
It’s just as easy to sell 1INCH as it is to buy it . Simply follow these steps:
1. Select an exchange
There are many exchanges that allow you to directly withdraw 1INCH.to USD. Some exchanges will require you to convert 1INCH to Bitcoin or a stablecoin before withdrawing.
2. Register an account
Verify your email address and identity and simply just open an account. Make sure you have a photo ID and phone ready. KYC (know-your-customer) processes and AML (anti-money laundering) regulations will be required before you can withdraw funds.
3. Deposit 1INCH into the exchange
Transfer 1INCH from your wallet to the exchange
4. Sell your 1INCH
Once you have located a 1INCH/USD pair, simply enter details of your transactions to proceed with the conversion. You can also convert 1INCH to another cryptocurrency which has a pairing with USD for conversion.
5. Withdraw USD
Once the conversion occurs, it's best to remove the funds from the exchanges to a bank account or use it to buy another type of cryptocurrency.
Final Thoughts On 1INCH
The 1inch platform is an excellent solution for traders who would like to find the fastest and cheapest way to swap their tokens.
DEX platforms are still rather slow, expensive and not user friendly when it comes to its utility as compared to CEXs. However, with the use of 1inch, the experience of using a DEX could be more enjoyable and easier.
In addition, a lot of CEXs are centralized with the risk of going bankrupt. They also experience downtime during extreme price volatility which could eventually lead to users moving to DEXs.
In the long run, there is a lot of development in progress for 1inch with significant improvements with their exchange and aggregator. As long as the demand for DEXs increases, we can expect to see positive results for 1inch and its token.