What is 1inch (1INCH)?

Deep Dive

1. Purpose & Value Proposition

1inch solves fragmented liquidity in decentralized finance by aggregating orders across platforms like Uniswap, PancakeSwap, and Curve. Its Pathfinder algorithm splits trades across DEXs and chains (Ethereum, Solana, BNB Chain) to secure better prices than any single exchange. This eliminates manual comparison and reduces slippage, particularly for large orders.

2. Technology & Architecture

The protocol uses intent-based trading: users specify desired outcomes (e.g., “Swap 1 ETH for the most USDC possible”), and resolvers compete in Dutch auctions to fulfill requests. Key innovations:
- Fusion mode: Gasless swaps where resolvers cover fees, with MEV protection via encrypted transactions.
- Aqua Protocol: Shared liquidity layer allowing capital to be used simultaneously in multiple strategies without locking funds.
- Cross-chain SDK: Enables atomic swaps between EVM and non-EVM chains like Solana, avoiding wrapped assets or bridges.

3. Tokenomics & Governance

The 1INCH token powers:
- Governance: Voting on protocol fees, integrations (e.g., Coinbase API adoption), and treasury allocations.
- Staking: Users lock tokens to earn rewards from resolver arbitrage profits.
- Liquidity mining: Incentivizes liquidity providers across partnered DEXs.
Total supply is capped at 1.5B, with 1.4B circulating as of December 2025.

Conclusion

1inch is a foundational DeFi protocol that democratizes access to optimal trading rates while prioritizing self-custody and cross-chain interoperability. Its hybrid model—combining aggregation, intent-based design, and community governance—positions it as critical infrastructure for decentralized liquidity. How will 1inch balance scalability with decentralization as it expands to non-EVM ecosystems?