What is 1inch (1INCH)?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
1inch is an aggregator that searches across decentralised exchanges for the best swap route, and it began at a hackathon in 2019. It supports Ethereum and several other EVM-compatible chains. 1INCH is the token used for governance and various protocol functions.
Key points
- Searches liquidity across DEXs and splits orders to maximise the amount received
- Provides its own limit order protocol, where placing an order costs no gas
- In its Fusion mode, third-party fillers bid to execute the order
- Deployed across several EVM-compatible chains
Definition
An aggregator that searches liquidity across decentralised exchanges and splits and optimises the route for each swap.
Liquidity differs from one DEX to another, so the same swap returns different amounts at different venues. That gap widens with size: routing a large trade through a single pool moves the price against you. 1inch was built to close it.
Its routing algorithm splits an order across multiple DEXs and compares routes, including ones that pass through an intermediate token. Executing several swaps in one transaction raises gas costs, with the aim of more than recovering that through a better rate.
It also runs its own limit order protocol. Placing an order writes nothing on chain — you only sign it — so there is no fee to place one. When the conditions are met, a third party executes the fill and pays the gas.
In Fusion mode, the user specifies only a minimum amount to receive and execution is handled by a filler selected through bidding. The user pays no gas directly, and because the order is not exposed in the public mempool, it is harder for anyone to sandwich it.
Watch out for
- · Problems in any DEX contract along the route affect the swap
- · Swapping requires granting a token approval first, and its scope should be checked yourself
- · More complex routes cost more gas, so fees weigh heavily on small swaps
Frequently asked questions
Is 1inch an exchange?
It is not an exchange that holds your orders or custody of your assets; it assembles and executes a route through existing decentralised exchanges, with funds moving directly from your own wallet.