Decentralized exchanges have become increasingly popular among crypto traders for its privacy, transparency, and security. One of those decentralized exchanges that has taken the space by storm is 1inch. It is a decentralized exchange aggregator that searches for the most economical and efficient cryptocurrency swap based on liquidity.
If you're trading cryptocurrencies, understanding how 1inch works is essential. In this blog post, we’ll cover everything you need to know about 1inch, from its genesis to how it operates and the benefits it provides for crypto traders.
Background of 1inch
Before diving into how 1inch works, it is essential to understand where the platform came from. The platform was launched in 2019 by Anton Bukov and Sergei Kunz, who started by creating a liquidity protocol that helped Ethereum-based tokens to have a broader market. Later on, the liquidity protocol took the form of 1inch Exchange, the UI-based platform that aggregates other decentralized exchanges and provides the best trading prices in a single swap.
How 1inch Operates?
1inch uses multiple decentralized exchanges to find the most optimal swaps for users. To achieve this, 1inch is connected to various decentralized exchanges where it can fetch liquidity and prices. When a user wants to trade cryptocurrencies on 1inch, the platform uses algorithms and smart contract technology that routes users' trade orders across several decentralized exchanges to get the best available price.
Also, 1inch has developed a liquidity protocol called Mooniswap, which provides users with favorable trading rates compared to other decentralized exchanges. Mooniswap incorporates a unique technique that reduces price slippage, even if there are large amounts of orders. Therefore, traders can trade larger orders with lower costs using Mooniswap.
Benefits of Trading on 1inch
a. Better Prices: 1inch is an aggregator which means it pulls prices from different decentralized exchanges to provide the best trade price to users. The platform implements an algorithm that ensures users always get the best price on the market.
b. Enhanced Privacy: 1inch is a non-custodial platform where users don't have to create accounts to begin trading. This means that all trading activities are completely anonymous, providing users with enhanced privacy protection.
c. Better User Experience: 1inch is straightforward and easy to use and understand, even for beginners. The platform incorporates a user-friendly interface that simplifies the trading experience for users.
How to Use 1inch?
To use 1inch, users need to first have an Ethereum account and have the required cryptocurrencies to make the trade. Once the users have the necessary cryptocurrencies, they can connect their wallets to 1inch, where they can find the trading markets to find the most favorable pricing. Once they find the best price, they can confirm the transaction, and their wallet is immediately credited with the exchanged cryptocurrencies.
1inch is one of the leading decentralized exchange aggregators in the crypto space that provides users with a simplified trading experience, better prices, and enhanced privacy. Understanding how the platform works is essential for crypto traders that want to take advantage of its unique benefits. 1inch's process is straightforward and easy to follow, and its ability to get the best prices from different decentralized exchanges ensure its popularity among traders. As a trader, using 1inch to trade cryptocurrencies means you stand a better chance of getting the best prices and enjoying a better trading experience.