1inch DEX Aggregator: Review of the most popular DEX present

Lately, DeFi has become more and more popular in the world decentralized exchange aggregator 1inch. High fees caused by increased activity on the ethereum blockchain and the growing popularity of the decentralized finance industry are to blame. The 1inch aggregator, which does not hesitate to use Internet memes in its promotion, works like Google between sites. The article includes 1inch guide, 1inch review, 1INCH token, CHI Gas Token and Mooniswap.

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In the article you will find:

1. Basic data
2. What is 1inch and how does it work?
3. How is it different from other decentralized exchanges?
4. 1 inch review
5. 1 inch instructions

Basic data

• Type: DEX aggregator
• Support: ERC-20
• Fees: 0 % (the aggregator fee does not make sense)
• Created: May 2019
• Funding: Rockaway Blockchain Fund (Czech), Galaxy Digital, Binance Labs, Pantera Capital and others ($12 million)
• Traded volume: over USD 500 million (February 2021)
• Management: YES, through the 1INCH token

What is 1inch DEX and how does it work?

1inch is an aggregator of decentralized exchanges (DEX). That is, it looks for the ideal combination of DEXs so that the user pays the least possible fee and price slippage when exchanging tokens (which is a phenomenon of low-liquidity exchanges, where a large order causes an adverse price fluctuation) and gets the best exchange rate. 1inch thus elegantly complements the portfolio of basic DeFi products and functions as a ticket configurator. The advantage of the aggregator is also the so-called CHI Gas Token presented in the section 1 inch instructions.

You might be interested in: What are DeFi?

DEX aggregators (or also liquidity aggregators) like 1inch became popular as early as mid-2020, when 20 % volumes of decentralized trading passed through them.

1inch is named after Bruce Lee's '1inch punch', which used his finger to deliver a powerful punch, and embodies efficiency.

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Mooniswap

Mooniswap is a project created by 1inch that looks like Uniswap. At the end of last year, it announced an expansion to the NEAR blockchain (smart chain with a single sharded blockchain), making it the first DeFi protocol developed on NEAR. This move will allow the protocol to be experimented with on a sharded platform going forward to be ready for Ethereum 2.0.

Team

The 1inch project was developed in just sixty hours at a New York City hackathlon. It was created by two Russian developers Sergey Kunz and Anton Bukov.

How is it different from other decentralized exchanges?

It is an aggregator, does not charge a fee and has its own exchange and technology to reduce fees. The competition consists of:

• 0x API – started only on January 28, 2021
• Ag – The pro version also has a limit order like 1 inch, in addition the X Blaster function for splitting large orders into several smaller ones, but approximately 25x smaller traded volume through the platform
• Matcha – positive surplus goes exclusively to users, the simplest interface

Mooniswap by 1inch

1inch review cannot do without Mooniswap, because when 1inch launched, the team promised to solve the problems of existing DEX exchanges and developed your own. Mooniswap addresses "volatile loss" (potential loss when withdrawing liquidity from a pool caused by arbitrage) and front-running (exploiting inside information about future transactions in the protocol to make a profit). But it does not use (like Bancor V2) any oracles.

Mooniswap CEO even said that arbitrators on DEXs earn more than liquidity providers. He therefore used Vitalik Buterin's contribution to develop so-called virtual balances, where the balance inside the exchange is updated within five minutes in case of a high price slippage. The instant update made it possible to reward faster arbiters more. The new system is intended to ensure that the liquidity provider earns more than the arbitrator.

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1 inch review

1inch saves fees on Ethereum because it performs the entire swap through multiple pools and protocols in a single transaction.

Paradoxically, its main advantage is not aggregation, but the so-called Gas token (CHI Gas Token), which uses the properties of Ethereum to reduce fees.

You might be interested in: Uniswap review

1 inch instructions

1inch, like other DEXs, has its own contract address on the ethereum blockchain.

1. Connecting the wallet

Before you start the exchange, you need to connect your own wallet. 1inch supports WalletConnect technology (e.g. the Trust Wallet mobile wallet), Web3, Ledger, Formatic, etc., the connection is via QR code.

2. Swap

The application interface of 1inch is basically not much different from other DEXs. You select a pair to swap (only tokens running on Ethereum). Once you make the swap, you must also confirm the transaction on your wallet.

Options

• Partial order fulfillment
• Path view
• Selection of sources of liquidity
• Comparison of combinations
• Custom limit or tolerance

 

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1. Source: 1inch.exchange

2. Source: 1inch.exchange

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Orders

The 1inch instructions cannot be left without an explanation of other order options. You can activate a so-called "limit order" like on the stock exchange and wait until the exchange criteria are met:

• Amount of the first token (that you provide)
• Price
• Order expiration
• The amount of the second token (that you get)
• Course
• Reverse course

1 inch governance token

Spread surplus is a positive change in the final rate of the transaction, i.e. when they pay more. According to the protocol, this extra value is distributed in the form of Spread Surplus coins, which are converted into 1INCH tokens via Mooniswap. Whoever holds the 1INCH token and provides liquidity in Mooniswap is authorized to intervene in the protocol through voting.

In selected pools (WBTC, ETH, USDC, USDT, DAI, YFI) the liquidity provider will get bonus tokens. The rest of the tokens will be released gradually and will be used to finance the development of the protocol, as is usual with DeFi.

At the end of last year, 1inch also airdropped those who used the platform (passively and actively). The airdop became a legend because while someone made twenty million, another lost a potential 1.8 million because the transactions he made to qualify for the airdrop were too small.

CHI Gas Token

CHI Gas Token is a 1inch fee reduction token. The price of CHI is like the price of ETH gas, but when buying and selling you save compared to normal ETH gas. CHI Gas Token uses the so-called Ethereum storage refund and optimizes the transaction including addresses to make it as cheap as possible. Using the CHI Gas Token makes sense, but it's not easy.

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Referral program

At the end of the web access to 1inch, you will find the option to have a referral link generated. If someone accesses the protocol and trades through it, you are eligible for a referral reward approximately once a week. The 1INCH token allows you to vote on the size of this reward.

If you liked the 1inch review or want to ask a question, please leave a comment.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.