{"id":11047,"date":"2023-03-19T10:09:29","date_gmt":"2023-03-19T10:09:29","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=11047"},"modified":"2022-05-18T04:43:50","modified_gmt":"2022-05-18T04:43:50","slug":"what-is-1inch","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/what-is-1inch","title":{"rendered":"What is 1inch?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-1inch\/#1inch_history\" >1inch History<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-1inch\/#how_does_1inch_work\" >How does 1inch work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-1inch\/#what_is_the_1inch_token\" >What is the 1INCH token?<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><p>Maybe you have ever heard about the 1inch project. This is one of the largest decentralized exchanges in the crypto world.\u00a0<strong>1inch<\/strong>\u00a0is especially known for one reason and that is that its developers claim to offer the best exchange rate among all their competitors at all times. In addition, they claim to have\u00a0<strong>options to maximize savings on commissions.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>1inch is a powerful decentralized<strong>\u00a0finance protocol or\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-defi-o-decentralized-finance\/\">DeFi<\/a><\/strong>, whose main objective is to offer its clients an exchange interface that is easy to understand, supports multiple chains, has low commissions and has a system capable of guaranteeing the best possible exchange for those users who implement its services.<\/p>\n<p>This project is a great tool for\u00a0<strong>traders<\/strong>\u00a0who usually use DeFi applications, those who are looking to\u00a0<strong>convert<\/strong>\u00a0their tokens,<strong>\u00a0save<\/strong>\u00a0on commissions and invest less in transaction costs. If you are interested in this project stay reading this article where we will tell you all about 1inch and how it works.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1inch_history\"><\/span><strong>1inch History<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The history of 1inch begins with its foundation in May\u00a0<strong>2019<\/strong>. After many years working on this project, Russian developers<strong>\u00a0Serjez Kunz and Anton Bukov<\/strong>\u00a0worked very hard on smart contract auditing. The big idea for this project was born at the\u00a0<strong>ETHNewYork<\/strong>\u00a0<strong>Hackathon<\/strong>\u00a0where they were experimenting with arbitrage and strategy bots. During these experiments they developed a preliminary version of what would become the protocol.<\/p>\n<p>&nbsp;<\/p>\n<p>At that time the protocol was an\u00a0<strong>AMM<\/strong>\u00a0that had the ability to join several decentralized exchanges to use them as bridges to obtain liquidity and to offer with advantages\u00a0<strong>the best exchange rates in the market.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>By\u00a0<strong>2020<\/strong>, specifically in\u00a0<strong>August<\/strong>, Kunz and Bukov had already raised their first capital worth approximately\u00a0<strong>$2.8 million<\/strong>\u00a0thanks to collaborators such as Galaxy Digital, Libertus Capital, Dragonfly Capital, FTX, IOSG, Greenfield One, LAUNCHub Ventures, among others. To the capital raised, an additional investment of\u00a0<strong>$12 million<\/strong>\u00a0was made by Spartan Group, ParaFi Capital, Nima Capital, Blockchain Capital and Pantera Capital.<\/p>\n<p>&nbsp;<\/p>\n<p>By raising all this capital, 1inch was able to launch\u00a0<strong>Mooniswap<\/strong>\u00a0in August\u00a0<strong>2020<\/strong>. Mooniswap is also known as 1inch Liquidity Protocol. This protocol is an automated market maker or\u00a0<strong>AMM<\/strong>\u00a0that operated with a small delay of approximately five minutes in prices. This delay allowed the development of a more competitive environment for\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-cryptocurrency-arbitrage\/\">arbitrage<\/a>\u00a0traders and, in turn, was able to reduce the risks of\u00a0<strong>impermanent loss to liquidity providers.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>We should note that at the same time\u00a0<strong>Kunz and Bukov<\/strong>\u00a0were not standing still and at the same time Mooniswap was deployed, they were working on an\u00a0<strong>improved version<\/strong>\u00a0of the protocol. This version was introduced in November 2020 under the name\u00a0<strong>1inch V2<\/strong>. This new version featured a powerful routing and pairing algorithm called \u201c<strong>Pathfinder<\/strong>\u201c. This new algorithm allowed to offer even better exchanges and had a speed several times faster than the previously presented algorithm.<\/p>\n<p>&nbsp;<\/p>\n<p>It is worth noting that Pathfinder had the ability to employ\u00a0<strong>strategies<\/strong>\u00a0to ensure that the trades being executed could be executed under\u00a0<strong>the most optimal<\/strong>\u00a0swap formula by taking advantage of the depth of the decentralized swap markets and<strong>\u00a0the behavior presented in the AMM price curve<\/strong>. The new version of\u00a0<strong>Pathfinder<\/strong>\u00a0was much more optimal and its trades superior to those of the competition.<\/p>\n<p>&nbsp;<\/p>\n<p>By the end of 2020 1inch launched the\u00a0<strong>1INCH<\/strong>\u00a0token which became the governance token for the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-dao\/\">DAO<\/a>\u00a0of the project. From that moment on, the community has the ability to actively participate in the development of the project. It should be noted that 1inch is currently one of the most recognized projects\u00a0<strong>in the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-blockchain-and-how-does-it-work\/\">blockchain<\/a>\u00a0world.<\/strong><\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_618656446\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2022\/01\/1INCH2.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2022\/01\/1INCH2.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2022\/01\/1INCH2-300x205.jpg 300w\" alt=\"1INCH1\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2022\/01\/1INCH2.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2022\/01\/1INCH2-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2022\/01\/1INCH2.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"how_does_1inch_work\"><\/span><strong>How does 1inch work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The operation of 1inch is that of a very peculiar\u00a0<strong>decentralized exchange (<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/uniswap-2020-guide-the-most-used-dex-of-ethereum\/\">DEX<\/a>)<\/strong>, since this operation is based on dividing the exchange order received from the user, among the various decentralized exchanges that it uses as<strong>\u00a0liquidity providers<\/strong>. To understand it better, let\u2019s take an example: if we wanted to exchange ETH for BCH, what 1inch does is to take our exchange order and divide it among the different decentralized exchanges it has\u00a0<strong>indexed<\/strong>. Some examples of these exchanges are Uniswap, AAVE, Curve, Compound, among others.<\/p>\n<p>&nbsp;<\/p>\n<p>Once our order has been\u00a0<strong>split<\/strong>, the Pathfinder algorithm starts analyzing the\u00a0<strong>various pools available<\/strong>\u00a0in the indexed DEX in order to perform our trade. To do this, the algorithm analyzes some data, including the depth of each of these pools, performs a\u00a0<strong>simulation<\/strong>\u00a0of the price slippage for the order in question, calculates the\u00a0<strong>cost in\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-gas-in-ethereum\/\">gas<\/a><\/strong>\u00a0<strong>and other exchange fees.\u00a0<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>The process described above<strong>\u00a0is repeated<\/strong>\u00a0for each of the decentralized exchanges consulted and it should be noted that there can be as many as\u00a0<strong>12 at a time<\/strong>. The last part of the process is the creation of a comparative table where we are provided with information on which<strong>\u00a0is the most optimal<\/strong>\u00a0<strong>exchange solution.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Certain elements<\/strong>\u00a0are taken into account to offer this solution. These are the exchange that offers the best price,\u00a0<strong>the lowest transaction cost and most importantly, the commissions.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>The most striking thing about this project is that to go through this whole process we only need to\u00a0<strong>connect to the DEX<\/strong>\u00a0through a\u00a0<strong>Web3 wallet<\/strong>\u00a0and the rest of the transactions will be carried out completely\u00a0<strong>automatically.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>In case we do not want to access external exchanges, this project also offers the possibility of<strong>\u00a0creating our own liquidity pools<\/strong>\u00a0within the platform for the realization of exchanges within the same platform, as well as advanced exchange functions such as the possibility of creating the so-called \u201c<strong>limit orders<\/strong>\u201c, among other functions.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"what_is_the_1inch_token\"><\/span><strong>What is the 1INCH token?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 1INCH token is a token developed for a specific purpose and that is to be used within the 1INCH protocol. In short, this is a\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-utility-token\/\">utility token<\/a>\u00a0oriented to the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-cryptocurrency-governance-system\/\">governance<\/a>\u00a0of the protocol. This token also has other utilities such as being used so that third parties can use it as an exchange currency for network services.<\/p>\n<p>An important fact to note is that the total issuance of the 1INCH token is limited to exactly\u00a0<strong>1.5 billion tokens<\/strong>\u00a0which are released programmatically within the network. In addition, 1INCH is a\u00a0<strong>multi chain<\/strong>\u00a0token that is available on Ethereum and BSC.<\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>Maybe you have ever heard about the 1inch project. This is one of the largest decentralized exchanges in the crypto world.\u00a01inch\u00a0is especially known for one reason and that is that its developers claim to offer the best exchange rate among all their competitors at all times. In addition, they claim to have\u00a0options to maximize savings [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7352,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[165],"tags":[],"class_list":["post-11047","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrencies"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/11047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=11047"}],"version-history":[{"count":0,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/11047\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/7352"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=11047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=11047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=11047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}