Centralized Exchanges (CEXs) see trillions of dollars (USD) in monthly volume. But Decentralized Exchanges (DEXs) still struggle with factors like liquidity. For example, DEXs in 2019 saw $108 million in volume versus $80 billion for CEXs.
Despite these challenges, we continue to see the rise of DEXs to fill a void in the market. One of the more interesting platforms on the market today is 1inch Exchange. This platform boasts some of the lowest slippage and cheapest trades. It also offers a wide range of ERC-20 tokens.
Today, 1inch supports 152 coins and 158 trading pairs. It also has a total volume of more than $4 billion. That's significant performance compared to other DEXs. With this in mind, let's take a closer look at 1inch cryptocurrency exchange.
What Is 1inch Exchange?
A non-custodial DEX aggregator, 1inch's trades are performed via single transactions from a user's Ethereum-backed wallet. Many popular DEXs have been integrated into the 1inch protocol. These include:
And many more
What does this mean? It permits users to trade between almost every type of ERC-20 token. The platform's native token, 1INCH, is both a utility and governance token. The platform also offers a gas token "Chi" to help consumers.
This gas token is especially handy for arbitrageurs and experienced traders. Why? Because Chi reduces gas costs for transactions.
What else do you need to know about 1inch? There's also the next-generation automated market maker (AMM), Mooniswap. Mooniswap comes with virtual balances that enable liquidity providers to gain access to profits that would otherwise go to arbitrageurs.
What else do you need to know about 1inch? Let's take a closer look at 1inch and why it continues to increase in popularity among users.
What You Need to Know About 1inch
Recently, DEXs have gained in popularity among consumers. And there's a reason for this. The best DEXs have many benefits when compared to their centralized counterparts. These pros include increased security, self-custody, diversity of coins, and listing autonomy.
Of course, there are also drawbacks when it comes to DEXs. For example, DEXs come with notoriously thin books. They offer low liquidity, which contributes to expensive transaction cancellations and high slippage.
You must also understand that every order gets sent to the blockchain. That means anyone can see a transaction before getting mined. This visibility leaves trades more susceptible to interception by front runners who can pay higher gas prices.
In turn, these higher prices incentivize the network, motivating these networks to mine their transactions first. But 1inch Exchange is attempting to remedy issues such as thin order books and front running. The platform lets users swap and place limit orders on many different tokens.
Founded in May 2019, 1inch Exchange is the brainchild of Anton Bukov and Sergej Kunz. These two Russian developers collaborated to audit smart contracts.
They also participated in and won a handful of bounties at hackathons before founding 1inch. These included Set Protocol, Kyber Network, and MakerDAO.
What Distinguishes 1inch Exchange from the Competition
The 1inch team designed their platform to roll pricing and liquidity from all major DEXs within one location. When you trade on the 1inch platform, you can split across exchanges. This approach permits you to get the best pricing possible while minimizing slippage.
There are also excellent advantages associated with 1inch because of its integration of Oasis, Kyber Network, 0x Relays, Uniswap, and more. This innovation permits you to access liquidity and pricing for each platform.
1inch displays this information about pricing and liquidity for each platform in one easy-to-find place. You'll also see gas fees displayed.
This layout will save you both clicks and time. What's more, you'll avoid the need to assess the order books or open multiple exchanges. As a result, 1inch represents an excellent resource for your cryptocurrency market needs.
Interested in learning about other innovative exchanges? Here's what you need to know about another up-and-comer, Uphold Exchange.
How 1inch Exchange Works
When you go to the 1inch Exchange website, you'll see an interface providing options to buy cryptocurrency and swap tokens. You'll also find options for selecting the different DEXs where you want to make these trades.
This unique option allows users to access a much larger order book than you'd otherwise have available to you when working with individual DEXs.
After you've set up an account, you'll connect your Ethereum wallet by clicking on the "Connect Wallet" option on the site. Once you've completed this step, choose the assets you'd like to exchange. You'll also be able to research the best available rates.
You'll also be able to toggle on or off specific exchanges on the 1inch platform. You can do this based on your preferences, which lets you customize your cryptocurrency market experience.
As you scroll down, you can view exchange rates for each platform as well as how much they vary from the cheapest options. Once you've chosen the assets and the amount you'd like to swap, head to the trade and click on the "Swap Now" button.
From there, you'll receive a confirmation of your trade. Double-check the details carefully, ensuring they're correct. Once you've made sure everything's accurate, hit "Verify."
Last but not least, you'll approve the transaction within your wallet. Your trade will get processed on the blockchain, and, voila, you're done!
How Much Does It Cost to Use 1inch Exchange?
At this point, you're likely wondering what fees look like for those who use 1inch. Fortunately, you won't pay anything when it comes to withdrawal fees.
The only fee you'll need to pay attention to is a network fee. When does this fee get charged? When a user is routing through one of the DEXs on the protocol (e.g., Kyber Network, Uniswap, etc.)
The amount you'll need to pay will depend on the gas price when your transaction gets executed. Remember that this fee gets charged by the other exchange. In other words, 1inch doesn't benefit from these fees in any way. That said, when you opt for Chi GasToken, you can save on gas fees.
What You Need to Know About 1INCH
In December 2020, the 1inch Foundation's independent board released the 1INCH token. To celebrate the launch of 1INCH, complimentary tokens were handed out. These tokens went out to customers who had interacted with 1inch within a predetermined window of time.
How does 1INCH work? This token acts as both a utility and governance token. Because of its status as a governance token, 1INCH dictates its network protocols. This approach facilitates the Decentralized Autonomous Organization (DAO) model.
The platform has also begun a new liquidity mining program to catch up with the farming phase. The program features six liquidity pools. They include:
In essence, the 1INCH token operates as a utility connector token.
How many tokens are currently in circulation? 1.5 billion.
During the token's launch date, the 1inch team issued approximately six percent of the total supply. After that, additional tokens got released over time. These releases include a drop of 30 percent via community incentives that can be unlocked for the next four years.
What's more, 14.5 percent of the tokens have been set aside for a development fund and protocol growth. This portion of the coins are also earmarked for release over the next four years.
Safety and Security with 1inch Exchange
When we talk about 1inch Exchange as a non-custodial DEX aggregator, what does this mean? In a nutshell, the cryptos you trade via the platform don't get held by the exchange. Instead, they're stored in a wallet for trading.
Is this a safe way to transact online? So far, so good.
The 1inch Exchange has enjoyed an unblemished record. It has suffered no hacks and has yet to demonstrate any vulnerabilities that consumers should be concerned about.
Frequently asked questions about 1inch ExchangeWe’ve compiled some answers to questions we often get. Should you have any other questions, feel free to reach out below in the comments.
How To Connect Wallet With the Exchange?
To connect any of your wallets with the exchange, you should click on the "connect wallet" option in the top-right corner. After this, a pop-up will appear that will show all of the supported wallets. Choose one that you have access to and attach it to the list.
To connect to the exchange, you need to have your wallet logged in. If you select a supported wallet, a pop-up will allow you to link the two together.
When you're done following instructions, click on "authorize" or "connect", after which your wallet should be paired with the exchange.
How to Swap Tokens On the Exchange?
To start with a swap trade, select the "swap now" option. As the user, you will be asked to confirm your trade. Check if the details are correct, and "verify".
After this, you can look into your wallet, if the customer accepts the transaction, the trade would perform on the blockchain, showing the change in your account.
Is 1Inch Safe?
Because the exchange is non-custodial, this would suggest that the currencies are not being held by the exchange at any given point in time. This is unlike other exchanges that are centralized, and the currencies are deposited into the wallets for trading.
They also have a spotless record of security so far.
Are There Withdrawal or Deposit Fees?
Apart from fees for trading, 1inch relieves the customers from paying for withdrawals or deposits. This means you only concern yourself with wallet and respective platform charges.
They also have no relation to fiat currency. Thus, crypto-investors with limited assets will find the platform restrictive. Otherwise, you will have to acquire crypto first and then deposit it into the wallets integrated on the platform.
Only then can you use the swap rates offered by the exchange.
Pros and cons of 1inch Exchange
- There are no fees involved in using the service except for network fees
- The exchange has a good record of no hacking or breach incidents
- As a DEX aggregator, they ensure high liquidity on trades by limiting exchanges to single transactions
- The CHI token helps reduce transaction costs
- The novel [Mooniswap AMM](https://1inch-exchange.medium.com/1inch-revolutionizes-automated-market-maker-amm-segment-with-mooniswap-e068c20d94c) prevents slippage and takes control of entry pricing
- The platform cannot be accessed by individuals without crypto
- While being non-custodial, some traders will be discouraged by the lack of deposit methods
- Beginner traders will find the platform challenging because of the nature of its operation
- The infinity unlock might be a point of entry for attackers in the future (unlocking each transaction separately is expensive and time-consuming, hence why they avoid it)
Is 1inch Exchange Right for You?
As you can see, there are many compelling reasons to give the 1inch Exchange a try. Its interface is intuitive and user-friendly. And the company enjoys an incomparable track record when it comes to security and safety.
What's more, you won't pay any withdrawal fees for using this exchange, except for expenses related to network fees. While liquidity marks a significant issue with other DEXs, 1inch has found a way around this. By letting customers split orders, they've kept each trade within a single transaction.
When you couple this with using Chi GasTokens to reduce costs, expect to see significant yields. Last but not least, the platform's unique focus on Mooniswap protects traders from front-running attacks while permitting users to take advantage of slippages.
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