In this 1inch DEX review, I take you through the decentralized exchange aggregator, available on both the Ethereum (ERC20) and Binance Smart Chain (BSC).
If you want to find the best crypto trading prices on the DeFi market, 1inch Exchange will help you to find the best rates. 1inch offers cheap trades and low slippages across nearly every token on the ERC20 and BSC networks. Whilst also allowing users to earn high rewards by staking, providing liquidity, and farming their crypto assets.
What is 1inch?
1inch is a DEX aggregator created during the ETH New York Hackathon in June 2019. The platform allows users to access dozens of DEXes such as the likes of Uniswap and Sushiswap to trade for Ethereum-based tokens to get the best prices.
The platform is non-custodial, with all trades being performed within a single transaction from a user’s Ethereum-based wallet.
1inch Expands to the Binance SmartChain
1inch originally launched on the Etheruem network and allowed their user to access dozens of DEXes such as the likes of Uniswap and Sushiswap to trade for Ethereum-based tokens to get the best prices.
However, with Ethereum gas fees being so high, it made trading on Etheruem based platforms overly expensive for smaller investors. Therefore 1inch has now expanded over to another blockchain and is now live on Binance Smart Chain (BSC). Meaning that their trades can now also include BSC tokens, plus it should bypass some of those sky-high fees.
1inch Supported Wallets
With 1inch, you can connect a wide range of wallets such as the likes of MetaMask, Wallet Connect, Ledger, MEW, Torus and Portis. However, the available wallets to connect will only be determined when the network has been selected.
If you are connecting the likes of MetaMask and want to use the Binance Smart Chain, you’ll need to connect this up manually. If you’re not too sure how to do this then follow my guide below.
1inch exchange released its own governance and utility token (1INCH) on December 25th, 2020. There is a circulating supply of 73 million coins and a max supply of 1.5 billion tokens.
Users who stake their 1INCH tokens, as well as liquidity providers in the 1inch Liquidity Protocol, can vote directly on major protocol parameters. Such as the “price impact fee”, “swap fee“, “governance reward”, “referral reward“, and the “decay period”.
The token is available to trade on exchanges such as Binance, 1inch and Uniswap and can also be claimed via their recent airdrop.
As 1inch is a DEX aggregator, the exchange rates include the various fees charged by DEXes. 1inch do not add anything to these charges as otherwise, they would not be able to provide the best rates. Therefore the trading fees you pay with 1inch will depend on the DEX or DEXs you use to fill your order. For example, Uniswap charges trading fees at 0.30% per trade which is provided to the liquidity providers.
As there are no order books there are no deposit or withdrawal fees, but you will need to pay transaction fees for interacting with either the Ethereum or Binance Network. These transaction fees can vary and you’ll find cheaper fees on the Binance Smart Chain.
How to Swap Crypto
With 1inch you can swap between 2 tokens on the same network at the best possible rates.
To swap your tokens on 1inch, choose the coin you want to swap “from” and enter the amount. Then simply choose the coin you want to swap to.
You’ll be then shown the rates and the estimated fees, with the option to select from the maximum return or the lowest gas cost.
If you’ve not interacted with the token in swaps before, you’ll be prompted to unlock your token before you can go ahead and swap.
How to Provide Liquidity
You can earn rewards by providing liquidity to pools on 1inch. To get started you’ll need to have an equal share of 2 tokens that you’d like to deposit.
Then head across to the DAO and Pools. From here you’ll find a lot of different pools with APY rates and their returns. To add liquidity, click onto the “+” icon beside the pool you want to add liquidity too.
First, you’ll need to unlock your tokens, to allow the smart contract to spend your tokens. Then select the number of tokens you’d like to deposit and it’ll automatically match the amount 50/50 in the other token field.
Now when you add liquidity, you receive pool tokens called liquidity provider or LP tokens. These tokens essentially track your contribution to the pool and you’ll earn fees proportional to your share of the pool, which can be redeemed at any time.
The liquidity that you provide is then used when someone makes a trade (in this example) of BnB and 1inch on the exchange. Therefore, its worth mentioning that the ratio of your tokens might change over time. Meaning you could end up with more BnB or more 1inch depending on which way people are trading.
How to Yield Farm
With 1inch you can farm your staked LP tokens. This locks up your LP tokens in a process that will reward you with 1inch tokens.
To start earning, click onto the DAO and choose ”farming” from the left-hand side of the screen. From here you will see any 1inch farming pools that are available. Click on the ”deposit” button to stake your LP tokens.
When you enter the amount of LP tokens that you’d like to deposit, it will then provide you with a breakdown of your daily, monthly and yearly earnings.
How to Stake 1inch
As well as staking your LP tokens, you can also stake your 1inch tokens. When staking your tokens on the 1inch protocol you can collect governance rewards.
To stake 1inch, head across to the DAO and choose “Governance”. On the right of the screen, you can manually etner the number of 1inch tokens you’d like to stake or you can select 25, 50, 75 or 100% of your 1inch balance.
You’ll then need to unlock the 1inch tokens. Then choose to “Stake Token”.
Once you’ve staked your tokens, you’ll see your share displayed under “Voting Balance”. Plus you’ll also see your “Voting Power”.
Chi Gas Token
As you’re most likely aware by now, every transaction on the Ethereum network requires a processing fee, called “gas”. These fees can fluctuate with network usage, often getting really expensive when the network is running close to maximum capacity.
1inch saves on transaction costs by around 40% by utilizing the Chi GasToken. This is an ERC20 token which stabilizes the price of gas (similar to how a stablecoin works) and is meant to be used on 1inch exchange to pay transaction costs. The idea is similar to the GasToken token concept but it has some improvements. Chi is pegged to the Ethereum network’s gas price.
When the gas price is low, the Chi price is also low, and the opposite. Just like GasToken, Chi is tokenized gas on the Ethereum network. The only difference is that Chi is used on 1inch and Curve, while GasToken is used across the entire Ethereum network.
How to Mint CHI Tokens
If you want to get hold of some Chi tokens, you can easily mint these on the 1inch exchange. Please note that before you go ahead the maximum minting amount is 140 CHI, which equals to half of a block. An attempt to mint a larger amount would increase the execution time.
Step 1: Select ETH/CHI
When you are on the “Swap” tab at the top of the screen, select ETH from the “From” dropdown and CHI from the “To” field.
Step 2: Deactivate all DEXes
From the list of DEXes, deactivate all of these except for the CHI Minter so that its states 100%.
Step 3: Confirm and Swap
Confirm the transactions and swap using a fast gas time from your connected Ethereum wallet and perform the swap.
1inch Token Airdrop
1inch users who interacted with the platform prior to December 2020, may be eligible for free 1INCH tokens. As part of the launch of their governance and utility token the platform has airdropped 90 million 1inch tokens to users who previously traded on exchange.
Eligible users can get these tokens for free, as long as they’ve made at least 1 trade before September 15 2020, or at least 4 trades in total or trades for a total of at least $20.
Plus liquidity providers to the 1inch Liquidity Protocol (Mooniswap) will also receive their 1INCH tokens based on the liquidity mining program’s stages 1 and 2, announced earlier this year.
This drop will apply to every qualifying account or wallet thats been connected and traded with on 1inch, which is great as means you could be eligible for more than 1 claim too!
How to Claim your Free 1INCH Tokens
In this video, I show you how to claim your free 1INCH tokens as part of the platform’s 90 million token airdrops. Users must have interacted with the platform BEFORE December 24th 2020 and made at least 1 trade before September 15 2020, or at least 4 trades in total, or trades for a total of at least $20.
Plus liquidity providers to the protocol can also receive their 1INCH tokens based stages released last fall.