Decentralized finance (DeFi) continues to evolve, and at the forefront of this transformation stands 1inch, one of the most powerful and widely used DEX aggregators in the crypto ecosystem. Designed to optimize token swaps across multiple decentralized exchanges, 1inch delivers users the best possible rates by leveraging advanced routing algorithms and deep liquidity pools.
This comprehensive guide walks you through everything you need to know about 1inch — from its core functionality and key features to step-by-step instructions on swapping tokens, staking, providing liquidity, and ensuring security. Whether you're a DeFi novice or an experienced trader, this article equips you with the knowledge to use 1inch efficiently and safely.
What Is 1inch?
1inch is an open-source decentralized exchange (DEX) aggregator that scans multiple DEXs across various blockchains to find the most favorable swap rates for users. Instead of manually checking prices on platforms like Uniswap, SushiSwap, or PancakeSwap, 1inch automates the process, splitting trades across different protocols to minimize slippage and maximize returns.
Founded in 2019 by Russian developers Sergey Kunz and Anton Bukov, the project gained rapid traction after winning a hackathon at ETHGlobal New York. Since its mainnet launch in August 2020, 1inch has become a cornerstone of the DeFi landscape, processing hundreds of millions in daily trading volume at its peak.
As a non-custodial platform, 1inch never holds users’ funds. All transactions occur directly from your connected wallet, preserving full control over your private keys and assets.
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Core Keywords
- DEX aggregator
- 1inch swap
- Decentralized exchange
- Token swap
- Liquidity provider
- Crypto staking
- DeFi protocol
- Gas optimization
These keywords reflect the central themes of this guide and align with common search queries from users exploring decentralized trading solutions.
Supported Blockchains
Initially built on Ethereum, 1inch now supports 10 major blockchain networks, making it a truly multi-chain DeFi solution:
- Ethereum
- BNB Chain
- Polygon
- Optimism
- Arbitrum
- Gnosis Chain
- Avalanche
- Fantom
- Klaytn
- Aurora
This cross-chain compatibility allows users to access optimized swaps regardless of their preferred network, reducing congestion and gas costs on high-traffic chains like Ethereum.
The 1INCH Token: Utility & Governance
In December 2020, 1inch launched its native token, 1INCH, serving dual roles as a governance and utility token within the ecosystem.
Token Distribution
The total supply is capped at 1.5 billion tokens, distributed as follows:
- 6% (90 million): Airdropped to early users who interacted with the protocol before December 24, 2020 — a retroactive reward known as a retrodrop.
- 30%: Allocated for community incentives and liquidity mining programs.
- 14.5%: Reserved for ecosystem development and grants.
- Remaining tokens: Distributed to investors and core contributors over time, with full unlock expected by December 2024.
Key Functions of 1INCH
- Governance voting: Stakeholders can vote on protocol upgrades, fee models, and treasury allocations.
- Staking rewards: Participants in the staking program earn partial refunds on Ethereum gas fees — the higher the stake, the greater the rebate (up to 95%).
- Liquidity provision: Used in liquidity pools to facilitate swaps and earn trading fees.
Additionally, 1inch introduced the CHI Gastoken (CHI) in June 2021 to help users reduce transaction costs on Ethereum during periods of high network congestion. By using CHI, traders can save up to 42% on gas fees.
How Does 1inch Work?
At its core, 1inch uses a smart routing engine called Pathfinder to analyze liquidity across dozens of DEXs in real time. When you initiate a swap, the protocol evaluates multiple paths — sometimes combining several exchanges and intermediate tokens — to deliver the best net price after slippage and fees.
For example:
You want to swap USDT for WETH. Instead of routing entirely through Uniswap, 1inch might split the trade between SushiSwap and Curve, using DAI as an intermediary token if it results in a better effective rate.
This automated optimization saves both time and money, especially for large trades where slippage can significantly impact returns.
Key Features of the 1inch Ecosystem
Beyond simple swaps, 1inch offers a robust suite of tools tailored for both retail and advanced DeFi users.
1. 1inch DApp
The primary web interface allows seamless interaction with aggregated liquidity. It supports advanced features like:
- Partial order fulfillment
- Customizable swap routes
- Real-time price comparisons across DEXs
2. Aggregation Protocol (Pathfinder)
The backbone of the platform, this API-powered system ensures optimal pricing by analyzing over 200+ liquidity sources across supported chains.
3. Limit Order Protocol
Unlike standard DEXs that only support market orders, 1inch enables limit orders, allowing users to set specific buy/sell prices. Orders execute automatically when market conditions are met.
4. Peer-to-Peer (P2P) Trading
Users can create private swap offers sent directly to another wallet address. This feature is ideal for OTC-style transactions without intermediaries.
5. Liquidity Protocol (formerly Mooniswap)
An automated market maker (AMM) model designed to reduce impermanent loss and improve capital efficiency for liquidity providers.
6. 1inch Mobile Wallet
A non-custodial mobile wallet available on iOS and Android with built-in:
- DApp browser
- NFT support
- In-wallet staking
- Direct crypto purchases via fiat gateways
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Fees and Cost-Saving Strategies
Since 1inch is non-custodial, there are no deposit or withdrawal fees. However, users pay two types of costs:
- Network gas fees: Paid to miners/validators for processing transactions.
- Liquidity provider fees: Typically between 0.2%–0.3%, shared with pool contributors.
To reduce gas expenses:
- Use the CHI token on Ethereum.
- Monitor gas prices via tools like ETH Gas Watch.
- Execute transactions during off-peak hours.
Wallet Compatibility
1inch supports integration with a wide range of software and hardware wallets:
Software Wallets
- MetaMask
- Trust Wallet
- Coinbase Wallet
- WalletConnect-compatible apps (e.g., SafePal)
Hardware Wallets
- Ledger
- Trezor
- KeepKey
- CoolWallet
Connecting is simple: click "Connect Wallet" in the top-right corner, select your provider, and sign the authentication request.
Pros and Cons of Using 1inch
✅ Advantages
- Best-rate aggregation across multiple DEXs
- Advanced trading options (limit orders, P2P)
- Gas refund program for stakers
- Intuitive UI with dark/light mode and multilingual support (including Russian)
- Multi-chain access with deep liquidity
- Strong security track record
❌ Limitations
- Steeper learning curve for beginners due to advanced settings
- Occasional instability with limit order execution
- Limited availability of farming pools
- Gas fees still apply when canceling pending orders
How to Swap Tokens on 1inch
Follow these steps to perform a basic swap:
- Visit app.1inch.io — always verify the URL to avoid phishing.
- Connect your wallet (e.g., MetaMask).
- Select your source and target tokens (e.g., BNB → DAI).
- Enter the amount to swap.
- Review the estimated output, price impact, and gas cost.
- Click “Swap” and confirm the transaction in your wallet.
You can also:
- Set a custom slippage tolerance (default: 1%)
- Route through specific DEXs
- Send swapped funds directly to another wallet
For volatile or low-liquidity tokens, consider increasing slippage up to 12–20% to ensure execution.
Advanced Swap Settings
Experienced users can fine-tune trades using these options:
| Setting | Purpose |
|---|---|
| Slippage Tolerance | Adjust how much price deviation you accept |
| Partial Fill | Allow execution of part of your order if full liquidity isn’t available |
| Route Preference | Optimize for best rate, lowest gas, or OTC-style swaps |
| Liquidity Sources | Manually enable/disable DEXs used in routing |
| Compatibility Mode | Required for tokens with transfer fees |
Adding Custom Tokens
If a token isn’t listed, you can import it using its smart contract address:
- Click the "+" icon next to the token field.
- Paste the contract address (found on Etherscan, BscScan, etc.).
- Confirm risks and import.
⚠️ Warning: Scammers often create fake versions of popular tokens. Always double-check contract addresses.
Providing Liquidity & Yield Farming
While traditional liquidity mining is limited on 1inch today, users can still:
- Add assets to existing pools (e.g., BNB-USDT)
- Earn trading fees based on pool activity
- Stake LP tokens in designated farming pools when available
To add liquidity:
- Go to “Pools” → “Provide Liquidity”
- Select your asset pair
- Approve token usage
- Confirm transaction
Your share is represented by LP tokens, which reflect your proportion of the pool.
Staking 1INCH for Governance & Rewards
Staking unlocks governance rights and gas rebates:
- Navigate to DAO > Staking
- Enter amount of 1INCH to stake
- Approve transaction
- Confirm staking action
Your voting power scales with stake size. Gas refunds range from 5% (small stakes) to 95% (large stakes).
To unstake:
- Switch to “Withdraw” tab
- Choose amount
- Confirm transaction
Security & Audits
Security is a top priority for 1inch:
- Audited by leading firms: CertiK, SlowMist, Hacken, and Chainsulting
- Open-source codebase available on GitHub
- Active bug bounty program via Airtable submissions
No major exploits have been reported against core contracts — a strong testament to its resilience.
Always:
- Verify website URLs before connecting
- Never sign suspicious transactions
- Use separate wallets for DeFi interactions vs long-term storage
How Is 1inch Different from Uniswap?
| Feature | 1inch | Uniswap |
|---|---|---|
| Type | DEX Aggregator | Standalone DEX |
| Liquidity Source | Multiple DEXs | Own pools only |
| Limit Orders | ✅ Yes | ❌ No |
| P2P Trading | ✅ Yes | ❌ No |
| Gas Refunds | ✅ Via CHI & staking | ❌ No |
| Interface Complexity | Advanced | Minimalist |
While Uniswap focuses on simplicity, 1inch caters to power users seeking performance and flexibility.
Frequently Asked Questions (FAQ)
Q: Is 1inch safe to use?
Yes. The platform has undergone multiple third-party audits, maintains an open-source codebase, and has no history of major security breaches. However, always exercise caution when interacting with DeFi protocols — verify URLs and review transaction details carefully.
Q: Can I lose money using 1inch?
Like all DeFi platforms, risks include smart contract vulnerabilities, impermanent loss (when providing liquidity), and market volatility. Additionally, incorrect slippage settings may result in unfavorable trade execution.
Q: Does 1inch charge hidden fees?
No. All fees are transparent: you pay network gas and standard LP fees (usually ~0.3%). The platform itself does not take a cut of trades.
Q: Why isn’t my limit order executing?
Limit orders only fill when market prices reach your specified level. If the price doesn't move there within the set timeframe (up to 7 days), the order expires. High volatility or low demand can delay execution.
Q: Can I stake any token on 1inch?
Only the native 1INCH token can be staked for governance and gas rewards. Other tokens may be used in liquidity pools but do not qualify for staking benefits.
Q: How do I track my transactions?
After any swap or action, click your wallet address → “History” → view details on-chain via integrated explorers like BscScan or Etherscan.
Final Thoughts
1inch stands out as one of the most sophisticated DEX aggregators in DeFi, offering unmatched efficiency in token swapping, advanced trading tools, and meaningful incentives through staking and governance participation.
Its multi-chain support, strong security posture, and continuous innovation make it a go-to platform for both casual traders and DeFi veterans.
Whether you're looking to execute a quick swap or dive into yield strategies, 1inch provides a powerful, flexible environment built for performance and user empowerment.