1inch Exchange 2021 Review

1inch exchange is a decentralized exchange aggregator, formed to assemble pricing and liquidity from high ranking decentralized exchanges on one platform. This is expected to introduce the lowest slippage, cheapest trades, and access to an extensive range of ERC-20 tokens, which users have ever known.

Launched in Mar 2019, 1inch is a DeFi aggregator and a decentralized exchange with smart routing. The core protocol connects a large number of decentralized and centralized platforms in order to minimize price slippage and find the optimal trade for the users. 1inch platform provides a variety of features in addition to swaps. Users can trade via limit orders, deposit funds into lending protocols, move coins between different liquidity pools, and this list expands constantly.

Key Points

  • Trades at 1inch exchange are conducted within a single transaction using an Ethereum wallet.
  • Users can easily swap between different ERC-20 tokens.
  • Gas fees for transactions can be reduced using the platform’s token, “Chi.”
  • Mooniswap, a next-generation automated market maker (AMM), was introduced by the 1inch team to help liquidity providers better capture profits.

Overview

The varied benefits of decentralized exchanges, such as high-grade security, diversity of coins, self-custody, and listing autonomy, have increasingly endeared them to users as opposed to their centralized counterparts.

Despite their advantages, there are some drawbacks associated with them. Decentralized exchanges face problems including thin order books with low liquidity, which gives rise to expensive transaction cancellations and high slippage.

Furthermore, it is general knowledge that orders submitted to the blockchain are visible to all, meaning that a transaction can be viewed by anyone before it gets mined. Unfortunately, this makes it easy for every trade to be intercepted, as front runners can easily influence the network by paying a higher gas price to have their transaction mined first.

What 1inch Exchange Is All About

1inch, a non-custodial DEX aggregator, is all set to resolve the problems of the thin order book and front running.

Users can swap, and also place limit orders for a wide range of tokens.

It is equipped to roll liquidity and pricing from all major decentralized exchanges into a single platform. This means that all trades performed via 1inch can be divided across exchanges, an action that will minimize slippage and provide the best pricing for every trade. Integrated into the 1inch platform are the likes of Mooniswap, Uniswap, Kyber Network, 0x Relays, Oasis, and more.

Features of 1inch Exchange

The following are what users stand to gain from 1inch exchange:

(1) 1inch exchange does not hold the funds of its clients. The funds are instead held in the ERC-20 wallets of the clients.

(2) The rates and liquidity of multi-dex exchange are offered on a single board by 1inch exchange.

(3) Since there are no reserves at 1inch exchange, the platform is less likely to be attacked by hackers.

(4) Users are free to exercise total control over their coins.

(5) There’s no need for a KYC or an account. Customers can simply link and start trading with their wallets.

Fees At 1inch Exchange

Since the exchange does not hold money, there is no need for withdrawals or payments of any sort. However, users are responsible for gas fees, as all transactions on the Ethereum network require it.

The platform introduced CUP Gas Token to enable users to pay for the cost of their transactions on 1inch. Those who use CHI tokens to make payments will enjoy a 42% price reduction.

Connect Your Wallet To 1inch Exchange

1inch DEX supports several ERC-20 wallets, including:

  • Metamask
  • Trust Wallet
  • Ledger
  • Bitski
  • Torus
  • Formatic
  • Portis
  • Wallet Link
  • Unilog
  • Wallet Connect
  • Authereum.

The following steps will enable you to link your wallet with 1inch exchange:

  1. Locate the “connect wallet” option at the top right corner and click on it.
  2. A pop-up window will appear displaying all the supported wallets.
  3. Choose any wallet from the list.
  4. Don’t forget to sign in to your wallet if you wish to connect to 1inch exchange.
  5. After selecting a wallet, a pop-up window for the wallet will appear asking for your permission to link your wallet to the 1inch exchange.
  6. Agree by clicking on “connect” or “Authorize”
  7. At this point, your wallet is successfully paired with 1inch exchange.

Conclusion

Liquidity is a serious concern for decentralized exchanges. This is because liquidity is generally poor on these exchanges. The situation is made worse when liquidity is further spread over several distinct decentralized exchanges. As a result, large-volume transactions are at risk of slippage, which causes weak trade execution pricing. Thankfully, 1inch has the solution, which is basically to split orders across exchanges, all the while keeping the trade within one transaction.

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