Overview 1inch Network (1INCH)

Some of the first protocols in the DeFi market were decentralized exchanges (DEXes), which allowed digital assets to be exchanged directly through a smart contract, avoiding intermediaries.

The main disadvantage of DEXes was fragmented liquidity: each exchange had its own liquidity pools and was in no way connected to other platforms. Therefore, finding the best exchange option on DEX exchanges became a problem for users. However, the developers of 1inch Network solved this problem by introducing a new protocol that combines liquidity pools of different decentralized exchanges.

What is 1inch Network?

1inch Network is a set of decentralized tools for optimizing exchanges (swaps) of digital assets via smart contracts. In other words, it is a DEX aggregator that combines liquidity from decentralized exchanges.

Initially, 1inch Network only supported liquidity pools of three popular DEX exchanges: Uniswap, Bancor, and Cyber. However, as of April 2025, DEX aggregator 1inch works with dozens of decentralized exchanges, including Curve, Balancer, PancakeSwap, and many others. In addition to Ethereum, which initially supported the 1inch Network protocol, other networks were later added:

How does 1inch Network work?

1inch Network consists of two key components:

1inch Aggregation Protocol;
1inch Liquidity Protocol.

The 1inch Aggregation Protocol is responsible for finding and executing the most efficient transactions through decentralized exchanges. Through it, users get the most optimal exchange (swap) paths with the lowest slippage and fees.

1inch Liquidity Protocol is a next-generation automated market maker (AMM) protocol that has built-in protection against sandwich attacks that are performed by specially designed bots during swaps on decentralized exchanges. In addition, the 1inch Liquidity Protocol provides capital efficiency for liquidity providers.

1inch Network ecosystem

The list of decentralized tools the 1inch Network team provides goes far beyond a simple DEX aggregator. As of April 2025, the 1inch Network ecosystem includes:

1inch DAO, a decentralized autonomous organization that manages 1inch Network and defines the future of the protocol;
The 1inch Foundation is the non-profit organization behind the release of the 1INCH native token and is responsible for key initiatives to grow the ecosystem.

Also, besides the core DEX aggregator protocols, the 1inch Network team has released other products, including:

Mobile Web3 Wallet 1inch Wallet with advanced transaction management features, decentralized application manager (DApps), and BIP44 support;
1inch Portfolio Manager, designed to efficiently manage digital assets in a crypto wallet across different blockchain networks;
1inch Fusion+ — a cross-chain aggregator that allows swaps between different blockchain networks;
1inch RabbitHole — a tool to protect against sandwich attacks;
1inch Card — a physical card with cryptocurrency payment options.

1inch Network token

The 1inch Network team, following the example of Uniswap developers, released their own token, 1INCH, in December 2020. At the time, they held one of the largest airdrops (free cryptocurrency giveaways), which attracted a lot of attention from users.

1INCH holders can use the tokens to pay commissions for transactions made through the DEX aggregator and participate in managing the 1inch Network ecosystem by voting for proposals to improve it.

As of April 2025, 1.38 billion 1INCHs were circulating in the market, representing 92% of the total number of tokens (1.5 billion). However, the 1INCH token does not have a maximum issuance limit. This means that the 1inch DAO, with the community's consent, can issue new tokens, which would put additional pressure on the price of the altcoin.

Despite the popularity of DEX-aggregator 1inch, the token itself shows rather negative dynamics: since its listing on exchanges at the end of 2020, the value of 1INCH has decreased by more than 88% — from $1.60 to $0.18. And relative to its historical maximum (ATH), recorded in May 2021 at $7.87, the cryptocurrency 1INCH has collapsed by more than 97%.

Nevertheless, according to the CoinMarketCap service, the 1INCH token ranks 152nd among cryptocurrencies by market capitalization, which as of April 2025 is $254 million.