Hello everyone, sometimes DeFi might seem a bit overwhelming. Let's say you are trying to get entrenched in the new financial ecosystem and you are trying to choose a decentralized exchange or dex on which to perform your trading with so many options like Uniswap Sushiswap or Pancakeswap. You might be confused as to how to compare them for which one is the best for your needs. Well, 1INCH is solving that problem. It is eliminating the need for you to have to go through one by one through each decentralized exchange searching for the best prices.
What is 1INCH
1INCH is a dex aggregator. 1INCH sources liquidity from all different dexes into one platform. This allows users to find the most efficient swapping routes across all platforms from one simple place while also giving users the best prices. This works by sourcing liquidity from different dexes to offer the best swap rate from each individual decks for each trade you're making in a short amount of time. 1INCH has big institutional backing including the likes of Binance labs Pantera capital and galaxy digital. 1INCH is also already a fully functioning dao and it is 1INCH token serves as a governance token giving voters the rights to vote and propose in the future direction of the protocol
How Does 1inch Work?
- Let's assume that you want to buy some ERC20 token. Ethereum on a decentralized exchange.
- Then, we have to look at other DEXes; we will see that the rates and fees vary on different DEXes.
- 1inch makes this easy. 1inch’s algorithm determines the cheapest way from all of the available exchanges and liquidity protocols.
- Now we can purchase the Crypto X from the best deal from a 1inch interface.
What is the difference between Simple Mode and Classic Mode?
Simple Mode
Simple mode allows customers to swap crypto assets in a more user-friendly and simplified interface.= and provide 3 swapping options:
- 1inch router: It will route our transaction in the most efficient way, offering the best swap rate.
- Direct Swap: Our deal will be routed straight via the Dex with the highest liquidity. It is not necessarily the most affordable.
- OTC (Over the counter): It is the best choice for transferring larger amounts. Our transaction will be routed off-chain through registered Private Market Makers.
It makes use of Permit 712 Signed token approvals, which eliminates the need to submit authorization for specific tokens. Limit orders are not accessible in Simple Mode. Choosing the Limits tab will return us to Classic Mode.
Classic Mode
It includes live charts, limit orders, flashbot transactions, and some other features.
1inch Tokenomics
The 1INCH token is the governance and utility token of the 1inch Network. The token is applied in different capacities in the two existing protocols and will be used in the tokenomics of all new protocols released by the 1inch Network. 1INCH is a multichain token, currently available on Ethereum and on Binance Smart Chain (BSC) over a bridge.
Utility
Currently, the main application of 1INCH as a utility token is in the 1inch Liquidity Protocol where it is used as a connector to achieve high-efficiency routing.
Governance
The 1INCH token is used to govern all of the 1inch Network's current and future protocols. It is utilized in the governance modules of the 1inch Aggregation Protocol and the 1inch Liquidity Protocol.
Multi-chain
The 1INCH token is currently available on Ethereum and Binance Smart Chain (BSC). The BSC integration was implemented over a bridge, with no extra token issuance.
Token distribution
30% of the total token supply will go to community incentive programs. Another 14.5% form the growth and development fund that will be used to issue grants and incentivize developers to build on 1inch protocols. The remaining tokens will go to backers and core contributors.
Conclusion
The future of 1inch depends on the future of DeFi. The popularity of DEXes is increasing so is the need for aggregators like 1inch. And since 1inch is the most popular DEX aggregator in the market it offers great potential. Furthermore, since we are witnessing the very berth of DeFi, there is a long way ahead, and it’ll be intriguing to observe what the future holds for DEXes and DeFi.
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Hope you found today’s article helpful. If you want to learn more about trading follow me at @fizzonmyjayyce. Have a nice day :)