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Обзор криптовалюты 1inch - Binaryx

Review Of 1inch Cryptocurrency

Decentralized exchanges are the backbone and core service of the entire DeFi sector, but so far they are inferior to CEX in terms of trading volumes and, accordingly, liquidity. To fix this problem, liquidity aggregators have emerged, one of which is 1Inch. How does 1Inch work and why did the platform need a native token with the same name? 

What is 1Inch?

1Inch is the “instant management” token of the same-name DEX liquidity aggregator platform. Upon its emergence, the token was distributed among the platform participants on December 25, 2020. Technically, it is an ERC-20 standard token. 

1INCH positions itself as a management token and, according to the developers, is neither a security token nor an investment instrument. Its entire value is only realized on the 1INCH platform and comes down to the following functions:

  • Factory governance – enables token holders to make changes to the aggregation protocol settings, for example, change the fee size. 
  • Pool governance – voting for changes in the liquidity pool parameters, for example, in the order of remuneration distribution. 

Each 1INCH token gives the right to one vote. In order to vote for changes to the common protocol, it is enough to add a wallet with coins on its balance; pool management, however, requires 1INCH to be frozen in this pool. 

As already mentioned, 1Inch are “instant management” tokens, which distinguishes them from all other voting tokens (the same YFI, for example). The instant management protocol begins to make changes according to the number of votes already one day after the vote and conducts a smooth vote count. 

So, if on Yearn.Finance, in order to make changes, you need to put the offer to a vote and wait for its completion, then the 1Inch protocol will make changes to the liquidity aggregator or liquidity pool settings in as little as one day, if there are more votes “for” than “against” at that moment. And vice versa – if the balance of votes changes after another day, the changes can be rolled back. According to the developers, a dynamic system makes every user’s voice valuable.

1Inch was first announced in August 2020; by Christmas, the developers decided to make a gift to users by distributing 5% of the total supply of 1.5 billion tokens among them. They promised to distribute another 30% to the community over the next 4 years. By the end of January, 10 million 1INCH tokens appeared on the BSC blockchain, so users can now switch between blockchains on the aggregator’s website. 

1Inch Ecosystem

As already mentioned, 1INCH is a native token of the same-name liquidity aggregator, which allows executing large buy and sell orders via DEX at low slippage rates. Simply put: 

  • The main problem with DEX is that they cannot always guarantee liquidity in the required trading pair, especially when it comes to a large order;
  • 1Inch integrates with several DEXs at once and uses a smart contract to transfer the order to the exchange where it can be executed. If there is no required liquidity on any platform, 1Inch splits the order into several smaller ones and distributes it to different exchanges;
  • Ultimately, the trader who opened the 1Inch order has it quickly executed with the attraction of liquidity of various DEX, without doing anything manually. 

1Inch currently works with several dozen market makers and DEX and has its own AMM – Mooniswap. When opening an order, a trader can indicate which exchanges should and should not be considered during liquidity aggregation. The aggregator’s dashboard also has a search box, where the user has access to exchange options at the best rate or with the lowest gas costs. 

Another feature that sets 1Inch apart from its competitors is limit orders, which are very rare on decentralized exchanges. Although this is not a complete trader’s set, limit orders still provide more opportunities for profitable trading. 

In addition, 1Inch has numerous operational pools, allowing to make money by providing liquidity in various pairs. This list also includes pools for 1INCH (if there is no desired pair, you can open a pool yourself). It should be noted that even stables have a decent percentage of profitability:

Thus, although the 1INCH ecosystem is limited to only one platform, it is one of the most popular DeFi platforms, so in this case the importance of voting rights can hardly be overestimated. Not to mention the opportunity to earn on 1INCH by staking and create your own liquidity pools. 

Where to Buy Cryptocurrency: Available Exchanges

Although Binaryx is a centralized platform, it does recognize the importance of the DeFi sector and supporting platforms. The 1INCH management token has been added to the list of coins scheduled for listing in the near future and will soon be available for purchase in pairs with popular cryptocurrencies – USDT and ETH, including fiat. 

While 1inch is trying to provide liquidity for its token for DEX by itself, we can guarantee instant execution of sell and buy orders using our own reserves. This means that transactions will be executed at the current price, and it will be possible to stock up on 1INCHs even using a bank card. 

Stay tuned to find out about the listing date of 1INCH tokens and get dynamic management tokens at current exchange prices!

Mining and Storage

As already mentioned, 1Inch plans to distribute 500,000,000 1INCH tokens among liquidity users through staking over the next 4 years. This means that liquidity mining is used to get 1INCH, and in order to get new tokens, you need to buy coins on the exchange, then go to the platform and freeze them in one of the pools. 

There should be no storage problems at all since ERC-20 tokens can be stored in any compatible wallet. In order to use 1INCH during voting or freeze it in a pool, use one of the storage services supported by the platform: 

However, the built-in Binaryx wallet is better suited for investing and trading in fiat pairs, and can also be used to transfer a coin to any address or instantly convert it to the desired currency. 

Pros and Cons of the Project

It took the 1inch project just 2 years to become the fourth largest DeFi exchange platform with a total amount of blocked funds of $1.5 billion. The following platform’s strengths ensured its rapid success:

  • Simplicity – 1inch functionality is fully automated. Order opening and execution on the platform is not much different from similar procedures on any exchange, but the order execution time is much shorter than DEX’s average. 
  • Gas efficiency – the algorithm automatically calculates the direction of exchange with minimal gas costs. In addition, there are CHI tokens for 1inch, which help to save on commission. 
  • Extensive ecosystem – liquidity is provided by almost fifty platforms, with the possibility to exchange both all Ethereum-based tokens and coins issued on BSC. 
  • Staking – pools enable to derive additional income through liquidity mining of any pair (you can open the desired pool yourself). Moreover, 1INCH enables to make changes to the pool settings. 

As for the project’s weaknesses, they are not so noticeable, but there are still some. Among the main disadvantages: 

  • Small number of supported wallets – if you do not have a wallet from the above list, this means that you cannot use 1inch. This is inconvenient for users working with other valet operators or custodian companies, because you need to create a new address and transfer assets to it. 

Basically, it is obvious that the advantages and functionality of 1inch compensate by far for this small disadvantage. The platform will be useful for anyone who works with DeFi, uses decentralized exchanges for trading, or is looking for a pool to make money by providing liquidity. 

1inch Rate Forecast for 2021

1Inch is one of the most important and well-known DeFi platforms with a huge number of users. With a market cap of $547 million, 1INCH ranks 83rd in the overall cryptocurrency rating, which is very good for a relatively little-functional management token. It is also noteworthy that the 1INCH rate is weakly correlated with bitcoin and the general market trend: 

Obviously, the token rate depends not so much upon the general market sentiment, as upon the demand for the very 1Inch platform and the DeFi sector’s activity. Management tokens allow to influence the profitability in staking pools and the operation of the aggregation protocol, which means that the more profitable pools paired with 1INCH, the higher the demand for the token. 

The outlook for this coin for 2021 is primarily associated with DeFi, and the sector continues to grow, even despite the recent liquidation of items associated with a general market decline.  The DeFi 2020 boom may be just a demo version of the growth predicted in 2021, and in this light, the management tokens of one of the most demanded DeFi platform are a very good investment. 

Binaryx trader’s opinion

Sounds good and attractive: liquidity pools, decentralized applications, order execution, any volumes. But there is one small “but”: until the ETH network’s fee is decreased, all decentralized exchanges using the ERC20 protocol will charge incredible transaction fees. What is more profitable for a trader and where is it more profitable to work?  

If you make up to 100 transactions per week and at the same time pay up to $10 per transaction on DEX (taking into account the current transaction value in ERC20) or the same 100 transactions, but at a price of 0.05% of the transaction amount on CEX? You need to understand the volume. If your transaction volume as a percentage of the commission exceeds the one-time transaction cost on DEX, then it is ok, but if not? The faster the Ethereum network’s fees are reduced, the better for such exchanges and actually for the project of interest. 

Not all exchanges use ERC20: some operate on their own blockchain, where the transaction cost does not exceed 10 cents. Not only traders, but also investors should understand these nuances. After all, lack of understanding of the protocols’ essence will entail relatively high “intermediary” costs, which will replenish the pool of payments to holders of shares in halving. To date, from the perspective of trading, the asset price has corrected well and 1 coin is worth $4. The retracement was almost 50%, which, in terms of Fibonacci levels, is a good point to enter a position. 

Conclusion

1Inch is a liquidity aggregator for DeFi coins that allows DEX trading with minimal price slippage and time delays, as well as making money by providing liquidity for specific trading pairs. In general, it is a very useful and important platform for DeFi, which does make the life of DEX traders easier. 

The 1INCH token was released by the platform as late as last December and is a management token designed to decentralize 1Inch. Token holders can vote on changes to the operation of the aggregation protocol or a specific pool, while making money on 1INCH staking. What distinguishes 1INCH from the rest of the management tokens is its “instantaneousness” – you do not need to wait until the voting is complete to make changes. 

Although 1INCH does not position itself as an investment asset, it does have its own economic merit. The price prediction for this coin is directly related to the development of the DeFi sector, and in 2021, 1INCH may turn out to be a very promising financial asset. Especially given the low correlation with bitcoin and general market sentiment.

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