Overview
1inch is a DEX aggregator that splits orders across liquidity sources to find the best prices for swaps. Launched in 2019, it routes trades through multiple decentralized exchanges to minimize slippage and fees. Its 1INCH token governs the protocol.
How It Works
When a user requests a swap, 1inch's routing algorithm evaluates hundreds of liquidity sources across multiple chains and splits the order across the best routes. This aggregation often produces better prices than trading on a single DEX. The protocol also offers limit orders, a staking interface, and a portfolio dashboard.
Token & Funding
1INCH is the governance token, and staking 1INCH enables fee-sharing and voting on protocol parameters. The project distributed 1INCH to users who had interacted with the protocol before launch, without a traditional ICO. Revenue comes from small protocol fees on certain features.
Risks & Considerations
Aggregation reduces but does not eliminate swap risk, including slippage and MEV exposure. 1inch has faced a governance-related vote-buying incident that highlighted risks in its voting model. Users should still review token approvals and confirm final prices before confirming swaps.