1inch (1INCH)
A DEX Aggregator Protocol Across Multiple Chains.- The 1inch Network is a DEX aggregator protocol across multiple chains, which includes Ethereum, BSC, Polygon, Optimism, and Arbitrum.
- 1INCH is the protocol's native ERC-20 utility and governance token. The current use cases for 1INCH includes:
- Liquidity mining: Users can contribute to the liquidity pools to earn liquidity mining rewards and a share of the 1inch DEX transaction fees.
- Staking: Users can stake tokens on 1inch's farming program pools, in return receive staking rewards in 1INCH or other tokens.
- Governance: 1INCH holders are able to participate in the governance of the 1inch DAO and collect governance rewards.
- The project consists of the following major components working in conjunction:
- 1inch Aggregation Protocol: Facilitates cost-efficient and secure swap transactions across multiple liquidity sources while offering users competitive rates. This protocol incorporates the pathfinder algorithm, which finds the best paths among different markets on Ethereum, BSC, Polygon, Optimism, and Arbitrum.
- 1inch Liquidity Protocol: Next-generation AMM that protects users from front-running attacks and offers attractive opportunities to liquidity providers.
- 1inch Limit Order Protocol: Facilitates flexible limit order swap functionalities in DeFi. The protocol features include dynamic pricing, conditional orders, power various implementations, including stop-loss and trailing stop orders, as well as auctions.
- As at December 14th 2021, the maximum and total token supply of 1INCH is 1,500,000,000. The current circulating supply is 408,834,885 (~27.26% of the total token supply).
- Learn more about the token distribution of 1INCH here.
1. How does the 1inch Network work?
- Basically, the 1inch dApp is an entry point to the 1inch Network. It offers access to the deep liquidity and the competitive token swap rates on various DEXes, with unique features, including partial fill and the ability to find the best swap paths across multiple liquidity sources.
Source: 1inch
1.1. 1inch Aggregation Protocol
The protocol provides aggregation information services on exchange protocols and networks. The core part of the protocol is the 1inch smart contract, which performs runtime verification of transaction execution.
- As a result, user funds can't be lost even in case of interaction with an unsafe liquidity source. Since the smart contract ensures security, the protocol can be used in various aggregation information services, such as Pathfinder, developed and run by the 1inch Network.
Pathfinder is a routing algorithm, which offers asset exchanges at the best rates on the market.
- It finds the most efficient paths for a token swap, able to split between different protocols and even different market depths within one protocol in the shortest possible time.
Source: 1inch
1.2. 1inch Liquidity Protocol
The 1inch Liquidity Protocol is an automated market maker (AMM) that facilitates decentralized token swaps without the need for an order book. It is designed to capture value typically captured by arbitrageurs to provide liquidity providers with competitive returns compared to other AMM designs.
To provide liquidity to the 1inch Liquidity Protocol go to the "Pools" tab, connect your wallet, pick the pool (token pair) and how much liquidity you want to provide, click on the "provide liquidity" button and confirm the transaction in your wallet. Please, note that assets for each pool pair are provided in equal amounts. Therefore, you need to make sure you have a sufficient balance of both assets.
1.3. 1inch Liquidity Protocol
- The 1inch Limit Order Protocol is a set of smart contracts that can work on any EVM-based blockchains (Ethereum, BSC, Polygon, etc.). Key features of the protocol are flexibility and high gas efficiency that is achieved by using two different order types:
- Regular limit order: It is an order placed into a centralized 1inch database through the 1inch UI. While creating a limit order, you may set a specific price target and terms of the trade. These types of orders are not sent to any user; they can be filled by anyone, including the 1inch Aggregation Protocol.
- RFQ orders: This order type has different use cases and are dedicated mostly to market makers. Typical scenario: market maker creates a bunch of RFQ Orders and exposes them via API. Trading or platform/algorithm asks the market maker for quotes and if it matches his needs, he receives a signed RFQ order from the market maker.
1.4 1inch Wallet
- The 1inch Wallet is their wallet with a built-in DEX aggregator. Users are able to store, send, receive and trade crypto on Ethereum, BSC, Polygon, Optimism and Arbitrum. The wallet supports an array of tokens including ETH, BNB, USDT and various ERC-20 assets.
Source: 1inch