Curious about the crypto market’s DEX aggregators’ worth? In this detailed tutorial, you’ll learn how to make the most of 1inch, the go-to tool for comparing prices among decentralized cryptocurrency markets. Before proceeding, beginners should understand decentralized exchanges and their autonomy from the centralized authority.
DEXs revolutionize bitcoin trading because they bypass the necessity for a centralized marketplace. Users of these exchanges are liberated from the need for intermediaries, order books, or centralized handling of funds. DEXs are open to the public and protect users’ privacy and funds by requiring a wallet connection. Uniswap, PancakeSwap, and SushiSwap are all well-known DEXs.
1inch: DEX Aggregator
1inch is a prominent DEX aggregator in the crypto market, offering users the most cost-effective trades. As a friend to traders, it expertly directs customer trades among several decentralized exchanges to acquire the best rates. Unlike other exchanges, traders using 1inch do not need to conduct considerable research to obtain the best pricing for their trades. 1inch offers maximum pleasure for its users by leveraging numerous decentralized exchanges, including Uniswap, 0x, and Balancer. Furthermore, the site includes its liquidity mechanism, previously known as Mooniswap.
1inch Founders
Surjey Kunz and Anton Bukov began working on 1inch during an ETHGlobal hackathon in May 2019, marking the beginning of their project on the Ethereum blockchain.
After fine-tuning their technology for about a year, the creators of 1inch raised a significant fundraising round totalling roughly $12 million. This successful event was attended by prestigious organizations such as Pantera Capital, Binance Labs, Galaxy Digital, and ParaFi Capital.
As a result of this accomplishment, the team decided to launch the 1INCH token in December 2020. Notably, the organization executed an airdrop of the 1INCH governance token for those previously using the 1inch exchange platform.
The founders skillfully built a highly efficient DEX aggregator using their significant expertise. Surjey Kunz had previously worked as a software engineer at Porsche, while Anton Bukov had previously contributed to developing the NEAR Protocol as a developer.
How Does 1Inch Operate?
1inch provides a varied range of products and principally serves as a decentralized exchange (DEX) aggregator. Its operation entails comparing cryptocurrency prices and trading costs across several DEXs.
Let’s have a look at some of the project’s most significant features:
1inch’s Aggregation technology automatically routes transactions to platforms with the best pricing and lowest costs. This enables traders to use a single platform to compare prices and execute trades across the DEX environment. With 1inch, traders may conduct a single transaction without worrying about the complex discovery and routing processes behind the scenes.
1inch includes a liquidity mechanism, initially known as Mooniswap. This protocol allows users to generate passive income on their crypto assets by depositing them in 1inch liquidity pools. Traders can then use the cryptocurrencies in these pools as the counterparty for transactions made on the 1inch decentralized exchange. In exchange for providing liquidity, players get LP tokens, which can be staked or exchanged for other cryptocurrencies.
Additionally, the 1inch liquidity protocol employs virtual rates to address trade front-running difficulties. Virtual rates entail charge modifications inside the liquidity pool, making it unprofitable for malevolent actors—such as traders, miners, or bots—to implement front-running schemes by bidding higher fees.
Limit order protocol: 1inch limit order protocol allows traders to place more complex and conditional orders in addition to standard swap orders. Using this protocol, 1inch traders can place stop-loss and trailing stop orders. These features automatically assist in securing earnings at crucial price points or preventing losses.
Benefits of 1inch Compared to Other DEXes
Decentralized exchanges are well-known for providing users with more security and transaction autonomy. However, they frequently need to confront the difficulty of inadequate liquidity, which can result in inefficiencies in asset pricing, known as slippage. Slippage happens when the predicted trade price differs from the actual executed price.
One decentralized exchange, 1inch, stands out from the crowd by utilizing a one-of-a-kind infrastructure. This infrastructure seeks to address the liquidity problem by actively monitoring several decentralized exchanges for the best market price for facilitating deals, hence deepening liquidity pools.
1INCH Token
The 1INCH token is the governing entity for the 1INCH protocol, allowing holders to shape the platform’s operations through voting procedures actively. It was introduced around one year after the platform debuted in December 2020.
1INCH, which operates as an ERC-20 token on the Ethereum network, represents the essence of the platform. It has successfully obtained listings on several prestigious cryptocurrency exchanges, expanding its scope and accessibility further.
Bottom line
As a DEX aggregator and decentralized exchange, 1inch has been the top choice for many cryptocurrency enthusiasts. The platform is constantly evolving and improving, with dedicated development resources. The rapid adoption of cutting-edge liquidity techniques strengthens its position even further. Its progress has been nothing short of spectacular.
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