1inch – The DEX agregator
By Crypto Nation – 10 January 2021
Introduced in 2020, 1inch isn’t considered as a DEX (decentralized exchange platform) but more of a DEX aggregator. Thanks to the interoperability of the Ethereum network, 1inch allows exchanges to be carried out all while getting the best market rates.
1inch : The best rates in the decentralized market.
What is 1inch, the greatest DEX aggregator
1inch allows you to use the liquidity pools of several decentralized platforms, like Uniswap, to find the best rates for an exchange between two cryptocurrencies.
Audited several times by companies like Chainsulting or PepperSec, 1inch has gained the trust of the DeFi community.
The protocol led a fundraising of 2.8 million dollars in 2020, with the participation of Binance Labs. Followed by a new $12 million fundraising.
1inch has also introduced in its platform, a token named “Chi“ a type of “gas token“. It allows tokenizing the gas needed for transactions, and thus buying gas at a lower price. The Chi tokens can then be used during a transaction to pay the fees.
How to use 1inch
To use 1inch, you will need an Ethereum wallet, such as MetaMask for example.
Next, head to 1inch’s website by clicking here.
Start by connecting your wallet by clicking on “Connect Wallet“ in the top right corner.
Once connected, you will be able to exchange one token (ERC20 type) for another token, this is called a Swap.
In our example, we are about to swap 0.2 Ethereum (ETH) for 247.914 POLS. 1inch shows us the prices of the swap pairs, as well as an estimate of the fees for using the Ethereum blockchain.
We can see that there are two possible choices when swapping. One can prefer to maximize their return or prefer to optimize the costs by using less gas fees.
Below, we can find the list of decentralized platforms that can be used to perform the exchange and the one that 1inch has selected. Here we can see that for our ETH/POLS pair, Uniswap was chosen.
All that remains is to click on “SWAP Token“ to initiate the exchange, then confirm the swap. You will then have to accept the transaction on your wallet and pay the corresponding fees.
As with Uniswap, 1INCH token holders have a right of governance on the platform and can thus vote to participate in the decisions of the ecosystem’s evolutions.
To do this, your tokens must be staked, and therefore earn a constant remuneration, in addition to your right to vote.
Become a liquidity provider
By heading to the DAO > Pools tab, you can help provide liquidity to the platform’s pools.
You can select the Pool of your choice, based on the tokens in your wallet, by clicking on the + button.
You will then have to confirm the transaction, and you will then receive LP tokens to retrieve your liquidity whenever you want.
The APY column shows the interest you earn by providing liquidity in the Pool. This interest will be earned when you take your liquidity out of the Pool.
Increase your interest by farming
If you provide liquidity in a Pool and you receive LP tokens, and the Pool in question has a Farming icon in front of it, you will be able to farm these tokens!
Go to the DAO > Farming tab and deposit your LP tokens into the compatible Liquidity Farm using the Deposit button.
You’ll get a lot of interests, paid in 1INCH tokens, which can be withdrawn with the Claim button. The Exit button will take out your LP tokens with interest and withdraw will take out only your LP tokens.
Interactions with this type of Pool come with high fees, so make sure your capital is not too low, so that Farming can be profitable.
Visualize the platform’s data
Finally, in the DAO > Analytics tab, you can observe the data and the evolution of the 1inch platform.
1inch is becoming a key platform in the DeFi ecosystem, positioning itself as the leader in decentralized exchange aggregators. It represents an additional technological advance in a field that is constantly innovating. The seriousness of this project allows us to foresee great things to come in the next years.