Decentralized exchanges have shaped into a trustworthy platform when it comes to trading digital assets like cryptocurrencies. However, like any other platform, these exchanges do have few shortcomings, one of the most common is the difference in prices across the exchanges which results in higher arbitrage and uneven pricing.
This is where 1INCH has a role to play by becoming the decentralized aggregator which crawls the prices across exchanges like Uniswap, SushiSwap etc and presents the user with the easiest way to purchase cryptocurrencies at the best price.
The post discovers everything you need to know about the 1INCH crypto project and its native 1INCH coin. Does it hold enough potential to dominate the crypto trading space and become a viable financial product? Let’s dive into 1INCH –
What is 1INCH Crypto Project?
1INCH is an Ethereum based DEX aggregator that crawls specific decentralize exchanges to present the best and cheapest way to trade cryptocurrencies on its platform. Decentralized exchanges like Uniswap, PancakeSwap, SushiSwap etc are some of the famous and well-known platforms in the crypto space that help users place a trade just by connecting crypto wallet.
However, there’s one area where they lag and that is the difference in pricing and trading fee. For example, a user who has purchased a Decentraland MANA coin on UniSwap may have got the same token at a lower price on the SushiSwap crypto exchange and vice-versa. This is a loss for the user and highlights inefficient pricing across DEXes.
1INCH fixes it by allowing users to trade on its platform and automatically presenting them with the best price among the crawled exchanges. The list of DEXes it uses to compare and draw the best price are Balancer, 0x, Uniswap, SushiSwap and its own liquidity pool (previous known as Mooniswap) at the time of writing this post.
1INCH as an idea was born at the Ethereum developer conference held in New York back in 2019 by two geniuses Anton Bukov (CTO) and Sergej Kunz (CEO). They started with launching its own DEX named Mooniswap which was a clone of UniSwap before switching to its own liquidity pool and creating 1INCH DEX aggregator.
The project is well funded. In August 2020, it received initial funding of $2.8 million from Binance Labs followed by $12 million funding round by Pantera capital in December 2020.
1INCH on Binance Smart Chain:
In February 2021, 1INCH Foundation launched the 1INCH token on Binance Smart Chain, making its services available to BSC users. The token will be used to bridge two blockchains i.e Ethereum and BSC, giving users exposure to a wider range of decentralized exchanges, including Pancakeswap Crypto exchange.
A total of 10 million 1INCH tokens were initially issued on BSC to push up the liquidity level of Binance bridge, supporting transactions between Ethereum and Binance Smart Chain. Click here if you want to learn how to use 1INCH on BSC.
What is 1INCH Coin?
1INCH coin is an ERC20 utility token of 1INCH DEX aggregator. It plays a key role in governance i.e Instant governance that allows the community to participate and vote for specific protocol settings under DAO (Decentralized Autonomous Organization) which means anyone holding 1INCH token is eligible to vote for protocols irrespective of the amount.
The 1INCH token will be used in all present and future protocols shared below –
- Aggregation Protocol Governance
- Liquidity Protocol Governance
Aggregation Protocol Governance:
The aggregation protocol allows 1INCH token stakers to vote for Spread Surplus settings. Spread Surplus is generated during DEX transactions on the platform when the executed price is a little better than the quoted price.
Call it a time delay. The difference in price at the time of quoting and the final price at the time of execution results in Spread Surplus. By default, it is set to 0% but can be changed via 1INCH instant governance.
1 INCH uses the Pathfinder algorithm to get the best price for swap
Liquidity Protocol Governance:
Liquidity protocol is an upgraded version of Mooniswap. It is linked with the price impact fee that grows in proportion to the slippage to ensure higher rewards to the stakers and liquidity providers during volatility.
The liquidity providers and 1INCH stakers can directly vote for liquidity protocols that include impact fee, swap fee, referral & governance reward and decay period.
The community will decide the protocol fee and set the distribution of rewards
1INCH has two types of Governance –
Pool Governance:
This includes governance of parameters that are different for each pool like price impact fee, swap fee, decay period and rewards. For example, the wallpaper in your mobile device is different from the wallpaper in the mobile device of the person sitting next to you but both are using android based smartphones. Here, wallpaper represents the parameter of pool governance.
Factory Governance:
This includes governance of parameters that are common for all liquidity pools like default impact fee, default swap fee, default decay period and rewards. Quoting from the example shared above, users using android devices have the same camera settings by default. This default camera setting represents the parameter that comes under factory governance.
Parameters Info –
Swap Fee:
It is the fixed fee that is charged on each swap that occurs on the platform.
Price Impact Fee:
As explained earlier, it is a dynamic swapping fee that is a result of price slippage during volatility.
Decay Period:
Decay period protects traders from attacks and prevents arbitrage. This is a unique parameter in the 1INCH network.
Governance Rewards:
Just like the rewarding system on decentralized exchanges. 1INCH rewards stakers and liquidity providers by sourcing it from swap fees and price impact fees.
Referral Reward:
This is reserved for DAPPS for providing liquidity and the price for swapping. 1INCH source this reward from swap fee and price impact fee.
The total supply of 1INCH coin is capped at 1.5 Billion
What is 1INCH Foundation?
1INCH Foundation is a non-profit organization that looks after the growth and development of 1INCH’s network and drive community initiatives. It launched the 1INCH token on Christmas eve of 2020.
The Foundation has a prime focus on three areas i.e Community, Grants and Farming Programs. It wants to maximize the network’s decentralization by growing stake owner numbers.
The Foundation supports sustainable growth therefore it has a Grant program to fund developers & participants building the network’s protocols. Finally, like any other exchange, it wants to attract users to yield farming which is a proven area of growth, especially for the established DEXes.
How to use 1INCH Aggregator?
Using 1INCH exchange is similar to using any other decentralized exchange. The difference comes in terms of efficient swapping price. While other exchanges present their set of pricing as per the supply and demand in their liquidity pools, 1INCH sources the best price after running its Pathfinder algorithm and finding the easiest path to swap tokens at the best swapping price possible.
In the given example, I am selling my ethereum ETH token to purchase Audius Coin AUDIO. The platform is showing me the best swap prices to place my trade. Among the two options, the first one is 1INCH’s own liquidity pool and the second is Uniswap. I can choose any of the two and swap my ETH against AUDIO. That’s how easy it is.
Take note, at the bottom you can check the important details like Gas Fee, route and rate before placing the trade. Remember, it is mandatory to connect your wallet before placing a trade.
1INCH Coin Staking:
Staking 1INCH coin is one the easiest way to earn rewards on the network in the form of 1INCH tokens. Visit the 1INCH platform and click DAO on top of the page then click governance. On the right-hand side of the screen, you will see an option to stake 1INCH coins.
Moreover, on the same page, you can see other features like Pools, Yield farming etc where you can participate and earn additional rewards in the form of Swap fees and Price Impact fees.
30% of 1INCH tokens are allocated to 1INCH community
1INCH CHI Gastoken:
Most of us are aware of crypto kitties, the game built on Ethereum that drained the majority of network resources and increased congestion which resulted in higher gas fees on Ethereum and almost made it impossible for users to trade on the network.
Although the Ethereum blockchain is upgrading to ETH2.0 to reduce the high gas fee during the congestion period, 1INCH decided to take a step ahead and introduced a new ERC20 token CHI that acts as a mode of payment for the gas fee at the time of transaction.
According to exchange, the transaction on the 1INCH network is up to 40% cheaper than using the regular payment methods.
1INCH Airdrop:
1INCH had several rounds of airdrops that were intended to market and pull users to its platform from other decentralized exchanges like Uniswap. The first airdrop was done for 1INCH platform users who interacted with the platform before December 24, 2020, and had met any one of these three conditions –
- Atleast 1 trade on the platform before September 15, 2021
- 4 trades in total before December 24, 2021
- Trade at a qualifying value of $20 or above
Given the above criteria, 1INCH airdropped 90 million tokens on Christmas eve. Later in February 2021, it airdropped 6 million tokens to Uniswap users (of course to lure them) with the following conditions (any one applicable) –
- Atleast 3 trades in 2021
- No bot trading
- Active Uniswap trading for atleast 20 days
This airdrop wasn’t enough for the team. The third airdrop was announced for 1INCH users who missed the first one, releasing a total of 9 million tokens. Looking at these airdrops, it won’t be hard to guess, more airdrops are on the way.
1INCH Supported Wallets:
Gone were the days when a user has to create an account and verify KYC documents before placing a trade. Now, all you need is a wallet with cryptos and you’re all set to place a trade. To access 1INCH swapping services, it offers connection with various networks with multiple wallets as shown in the image.
Clearly, 1INCH servicers are available on top networks like Ethereum, Binance Smart Chain, Polygon and many more, allowing users to connect and operate from wallets like MetaMask, Coinbase wallet, hardware wallets like Ledger and Trezor etc.
1INCH Dispute with DeFi Pulse:
We know CoinMarketCap is a leader when it comes to tracking the performance metrics and updates on the majority of cryptocurrencies. Similarly, we have DeFi Pulse which has emerged as a leader in the crypto-financial space and became the standard for metrics, performance tracking and rankings of DeFi products like DEXes on its platform.
It lists top projects from various categories like Lending, DEXES, Derivatives, Assets and Payments. Unfortunately, 1INCH is not listed on Defi Pulse which is a cause of concern since DeFi Pulse plays a major role in influencing the decision making process of investors.
A dispute between the founder of 1INCH and DeFi Pulse escalated when Sergej Kunz alleged that DeFi Pulse stole its code to build a similar product. Though Scott Lewis, the founder of DeFi Pulse denied the allegations, the dust is yet to settle.
1INCH Crypto Benefits:
Literally No Fee:
1INCH is made for traders. It charges zero trading, deposit and withdrawal fees when compared to other exchanges like Uniswap which charges a fixed 0.30% of the trading fee. A trader will have to pay micro fees in the form of swap fees, price impact fees as discussed earlier in the post.
Pure Privacy:
You can swap cryptocurrencies without sharing your identity. The platform will never ask users for identity verification, keeping the trader’s identity anonymous.
Best Swap Price:
Imagine going from one decentralized exchange to another to find the best price for swapping your cryptos. 1INCH is the only decentralized platform that works hard for the user and provides them with the best swap price across the DEXes in the most convenient and fastest way.
Friendly User Interface:
Despite being a DEX aggregator, it has a very user-friendly UI. As a user, you won’t be confused when it reflects the primary DEX with the best price after comparing it with all other participating DEXes. Just enter the token amount and it will show the relevant price and associated fee at the bottom.
No Hidden Cost:
Ever booked an airline ticket online? The price of the ticket when you enter the site is always lower but by the time you reach the checkout page, a few extra dollars are added in the name of fees like convenient fees etc which weren’t reflected on the first page.
Well, this is not the case with 1INCH. The system is completely transparent with no hidden fee. You can clearly see the transaction cost incurred right at the bottom before going ahead with the trade.
1INCH Crypto Drawbacks:
Impermanent loss:
1INCH maintains its own liquidity pool which is also the primary DEX to trade from in the majority of trades. Unfortunately, like other DEXes, it is also exposed to impermanent loss which is the loss of deposited tokens on its liquidity pool as a result of uneven pair of tokens within the pool.
The problem can be reduced by pairing the token with stablecoins but the risk is always there.
No Fiat Accepted:
1INCH doesn’t accept trading in fiat currencies, which makes it difficult for mainstream users to place a trade on the platform. A user must have crypto coins and Ethereum tokens if he wants to access and use the platform to place a trade.
Under Development:
Although the platform is operational. The team is yet to introduce additional governance protocols on its network. Unlike Pancakeswap, 1INCH doesn’t have products (like syrup pools, lottery etc) that offers higher APYs which is useful to bring users to the platform. All such features are under development.
DeFi Pulse Dispute:
The project is yet to come to terms with DeFi Pulse. It is still waiting to get listed on DeFi Pulse. An absence from the platform has reduced its reach and questioned its credibility among new investors.
1INCH Coin Price:
Please check the latest 1INCH Coin price, shared below –
1INCH Coin Price Prediction:
Launched on Christmas eve of 2020, 1INCH quickly picked pace and hit an all-time high of nearly $9 in the early bull run of 2021. Later, it went downhill during the market crash and hit below $1.5 per token before stabilizing in the range between $2 – $4.
From the price action it’s pretty clear, 1INCH token follows the market trend and has good volatility that can boost or crush its price during bull and bear runs.
After going through the technical analysis, it is quite clear that 1INCH is trapped between the $2-$4 price range and it needs a good boost in terms of a bull run or some favourable news that can break $4 resistance and help it hit beyond $8 mark.
On the bright side, the coin is volatile and combined with the bull run it can hit the $20 mark easily once it surpasses previous highs. On the downside, the coin will be trapped between the given range if the market remains stagnant for a longer period of time.
Checkout 1INCH competitor i.e 0x Protocol (ZRX coin)
Where to buy 1INCH Coin?
1INCH is a DEX aggregator, therefore the best place to buy 1INCH coin is on its platform. I can bet, you will get the token at the cheapest rate on the exchange than any other Dexes like Uniswap exchange or centralized platform.
If you do not want to go the DEX way then doors are always open on centralized exchanges like Binance, Coinbase, WazirX etc. The only difference in centralized exchanges is the purchase process. There you have to create an account and go through KYC verification before the exchange allows you to trade this or any other crypto coins of your choice.
Is 1INCH Coin worth investing?
1INCH came at the right time with a unique concept. It has become the leading DEX aggregator after integrating major DEXes on its exchange like Uniswap, SushiSwap, Bancor etc. Extending its wings, the network has expanded further on the Binance Smart Chain that will allow it to include the number one DEX on BSC i.e Pancakeswap on its platform.
Although the dispute with DeFi Pulse is yet to settle, the project is picking up adoption. It has surpassed $2 bn TVL as per the tweet published on its Twitter handle earlier in 2021.
Summarising 1INCH prediction in one sentence I can say, the success of 1INCH largely depends on the success of decentralized exchanges. The trading volumes across the exchanges are reaching new highs every year but there’s a lot to be done to make DeFi a mainstream product for the masses.
If you support the decentralize revolution and are willing to bet on decentralize finance, 1INCH is one of the products you may include in your portfolio after due diligence.
This completes my review of 1INCH Coin with price prediction. In the next post, I will talk about Chainlink crypto coin and THORChain rune crypto that holds good potential. If you’re a fan of blockchain technology then please do share this post on your social handles and educate everyone around you. Do remember to subscribe to my YouTube channel for more informative content, released every week.
DISCLAIMER:
Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.