1inch is a leading decentralized exchange (DEX) aggregator operating on multiple blockchain networks, including Ethereum and Binance Smart Chain (BSC). It scans numerous DEXs to find the best trading rates, minimizes slippage, and reduces transaction costs for users. Beyond swapping, 1inch offers opportunities for yield farming, liquidity provision, and staking.
What is 1inch Exchange?
1inch is a decentralized exchange aggregator launched during the ETHNew York hackathon in 2019. It sources liquidity from various DEXs like Uniswap and SushiSwap, allowing users to trade Ethereum-based tokens at optimal prices. The platform is non-custodial, meaning users retain control of their funds by executing trades directly from their wallets.
Supported Networks and Expansion
Initially launched on Ethereum, 1inch has expanded to Binance Smart Chain to address high gas fees on the Ethereum network. This multi-chain approach enables users to trade BSC tokens with lower transaction costs while maintaining access to Ethereum-based assets.
Compatible Wallets
1inch supports a wide range of cryptocurrency wallets, ensuring flexibility for users. The available options depend on the selected network. Popular choices include:
- MetaMask
- WalletConnect
- Ledger
- Trezor
- Coinbase Wallet
- Binance Chain Wallet
To use networks like BSC, Polygon, Optimism, or Arbitrum, users may need to manually configure their wallet settings.
The 1INCH Token
The 1INCH token, launched in December 2020, serves as both a governance and utility token. Holders can stake tokens or provide liquidity to participate in protocol governance, voting on parameters such as swap fees, rewards, and decay periods. The token is available on major exchanges and can be earned through platform activities.
Fee Structure
As a DEX aggregator, 1inch does not impose additional fees on trades. Users pay the fees charged by the underlying DEXs (e.g., Uniswap’s 0.30% fee). Network transaction fees (gas fees) apply and vary depending on the blockchain used, with BSC typically offering lower costs than Ethereum.
How to Swap Tokens on 1inch
Swapping tokens on 1inch is straightforward:
- Select the token and amount you wish to swap from.
- Choose the token you want to receive.
- Review the offered rates and estimated fees.
- Select between maximum return or lowest gas cost options.
- Unlock the token if it’s your first interaction, then confirm the swap.
Providing Liquidity
Users can earn rewards by providing liquidity to pools on 1inch:
- Ensure you have equal values of two tokens for the pool.
- Navigate to the “Pools” section under “DAO”.
- Select a pool and click the “+” icon to add liquidity.
- Unlock your tokens to authorize the smart contract.
- Deposit tokens to receive LP tokens, which represent your share of the pool.
Liquidity providers earn fees proportional to their contribution, though token ratios may change due to trading activity.
Yield Farming with LP Tokens
Yield farming allows users to earn additional 1INCH tokens by staking LP tokens:
- Go to “DAO” and select “Farming”.
- Choose a farming pool and click “Deposit”.
- Stake your LP tokens to start earning rewards.
- View projected daily, monthly, and annual earnings.
Staking 1INCH Tokens
Staking 1INCH tokens grants governance rights and rewards:
- Navigate to “DAO” and select “Governance”.
- Enter the amount of 1INCH tokens you wish to stake.
- Unlock your tokens and confirm the staking transaction.
- Monitor your voting balance and power in the governance interface.
CHI Gas Token
1inch utilizes the CHI gas token to reduce transaction costs by approximately 40%. CHI is an ERC-20 token pegged to Ethereum gas prices, functioning similarly to a stablecoin for gas fees. It is used exclusively on 1inch and Curve.
Minting CHI Tokens
To mint CHI tokens on 1inch:
- Select ETH as the “From” token and CHI as the “To” token.
- Deactivate all DEXs except “CHI Minter”.
- Confirm the swap using a fast gas setting.
Note: The maximum minting amount is 140 CHI per transaction.
Historical Airdrop Program
1inch conducted an airdrop in December 2020, distributing 90 million 1INCH tokens to eligible users. Qualifications included trading activity prior to September 2020 or providing liquidity on the platform. Users could claim tokens through the platform’s interface if they met the criteria.
Frequently Asked Questions
What is 1inch Exchange?
1inch is a decentralized exchange aggregator that finds the best trading rates across multiple DEXs. It allows users to swap tokens, provide liquidity, and earn yields on supported networks like Ethereum and BSC.
How does 1inch reduce transaction costs?
1inch uses the CHI gas token to stabilize and reduce gas fees by approximately 40%. It also leverages Binance Smart Chain for lower-cost transactions compared to Ethereum.
Can I stake tokens on 1inch?
Yes, you can stake 1INCH tokens to participate in governance and earn rewards. You can also stake LP tokens from liquidity pools to farm additional 1INCH tokens.
What wallets are compatible with 1inch?
1inch supports popular wallets like MetaMask, Ledger, and WalletConnect. Ensure your wallet is configured for the network you intend to use.
Is there a mobile app for 1inch?
Yes, 1inch offers a mobile app for iOS and Android, enabling users to swap tokens and manage their investments on the go.
How do I claim rewards from liquidity provision?
Rewards are automatically distributed to your wallet based on your share of the liquidity pool. You can withdraw your funds and rewards at any time by removing liquidity.
For advanced strategies on yield optimization and liquidity provision, 👉 explore comprehensive guides here.