Decentralized finance (DeFi) continues to reshape how we interact with digital assets, and at the heart of this revolution lies 1Inch Exchange—a powerful decentralized exchange (DEX) aggregator that optimizes crypto trading for speed, cost-efficiency, and liquidity. Launched in 2019, 1Inch has evolved from a smart routing tool into a full-fledged DeFi ecosystem featuring its own governance token, liquidity protocols, and user-first innovations.
This comprehensive guide dives into everything you need to know about 1Inch Exchange, including how it works, how to use it, and the story behind its successful token airdrop that made headlines in late 2020.
What Is 1Inch Exchange?
Founded by Sergej Kunz and Anton Bukov, 1Inch Exchange is a decentralized exchange aggregator designed to find the best possible trading routes across multiple DEX platforms. Unlike traditional exchanges, DEXs enable peer-to-peer cryptocurrency trading without intermediaries. However, prices and gas fees vary significantly across platforms like Uniswap, Kyber Network, and Oasis.
That’s where 1Inch shines. It scans over 33+ liquidity sources in real time to split your trade across multiple exchanges—ensuring optimal rates, minimal slippage, and reduced gas costs. Whether you're swapping stablecoins or diving into volatile altcoins, 1Inch ensures you get the most value out of every transaction.
👉 Discover how top traders maximize their DeFi returns using advanced swap tools.
How Does 1Inch Work?
At its core, 1Inch uses a proprietary algorithm called the Pathfinder Engine to analyze liquidity pools and pricing data across numerous decentralized protocols. When you initiate a token swap—say, exchanging USDT for WBTC—the platform evaluates hundreds of potential paths and selects the most efficient one.
Here’s what sets 1Inch apart:
- Split Swaps: Instead of routing your entire trade through one DEX, 1Inch divides it among several platforms to minimize price impact.
- Gas Optimization: The system calculates not just the best rate but also the lowest gas cost, crucial during network congestion.
- Slippage Protection: Automatically sets safe slippage tolerance and alerts users if market conditions are risky.
- Real-Time Comparison: You can see side-by-side comparisons of rates before confirming your trade.
This intelligent routing makes 1Inch ideal for both beginners and experienced traders looking to save money and improve execution quality.
The 1Inch Liquidity Protocol (Formerly Mooniswap)
In August 2020, 1Inch launched Mooniswap, an automated market maker (AMM) designed to reduce impermanent loss—a common issue for liquidity providers on platforms like Uniswap. Mooniswap introduced a unique mechanism that delays price updates slightly, making it harder for arbitrage bots to exploit price discrepancies.
While Mooniswap was eventually rebranded as the 1Inch Liquidity Protocol, its core innovation remains integrated into the ecosystem. This protocol rewards users who provide liquidity with better risk-adjusted returns, enhancing capital efficiency across the platform.
Today, liquidity providers can stake their tokens in various pools and earn fees generated from trades routed through the network—further strengthening the decentralized nature of the exchange.
How to Use 1Inch Exchange: Step-by-Step Guide
Using 1Inch is straightforward and secure, thanks to its non-custodial design. Here’s how to make your first swap:
Step 1: Access the Platform
Visit the official 1Inch Exchange website using a secure browser like Chrome or Brave.
Step 2: Connect Your Wallet
Click “Connect Wallet” at the top right corner. Choose from supported wallets such as MetaMask, Trust Wallet, or WalletConnect. Confirm the connection in your wallet app.
Step 3: Select Tokens
Choose the token you want to trade (e.g., USDT) and the one you wish to receive (e.g., DAI). Make sure you have enough native currency (like ETH on Ethereum) to cover gas fees.
Step 4: Approve Token Spending
Before trading, you must grant 1Inch permission to access your tokens. You can choose between:
- Unlock: Grants access for a specific amount.
- Unlock Infinite: Allows unlimited spending (saves gas on future trades but requires trust).
Confirm the transaction in your wallet.
Step 5: Execute the Swap
Click “Swap” and confirm the final details. Once processed, your new tokens will appear in your wallet within seconds.
👉 Learn how to automate high-yield DeFi strategies with smart contract-powered tools.
The 1Inch Token: Governance and Distribution
One of the most exciting moments in 1Inch’s history came on Christmas Day 2020, when the team launched the native $1INCH token through a surprise airdrop. This move rewarded early users and active traders with free tokens—generating massive community excitement.
The $1INCH token serves as a governance token, allowing holders to vote on key decisions such as protocol upgrades, fee structures, and treasury allocations. With a total supply capped at 1.5 billion tokens, distribution occurs over four years through:
- Airdrops
- Liquidity mining programs
- Team and investor allocations
- Ecosystem development funds
By February 2021, a second airdrop distributed an additional 15 million tokens, expanding eligibility to include users from other DeFi platforms like Uniswap—further broadening adoption.
As of early 2025, $1INCH remains actively traded and integrated across major exchanges and DeFi dashboards, maintaining relevance in a competitive landscape.
Where Can You Buy $1INCH?
You can purchase $1INCH tokens on several leading cryptocurrency exchanges:
- Binance
- OKX
- Huobi Global
- Uniswap (V2/V3)
- The 1Inch Exchange itself
Simply connect your wallet or create an account, deposit funds, and place your order. Always ensure you’re using official websites to avoid phishing scams.
Frequently Asked Questions (FAQ)
Q: Is 1Inch safe to use?
A: Yes. As a non-custodial platform, 1Inch never holds your funds. All transactions occur directly between your wallet and the blockchain. However, always verify contract addresses and avoid granting unnecessary permissions.
Q: Does 1Inch charge fees?
A: The platform charges a small service fee (typically around 0.3% or less), part of which goes toward maintaining operations and rewarding developers. Gas fees are paid separately to the underlying blockchain network.
Q: Can I provide liquidity on 1Inch?
A: Yes. Through the 1Inch Liquidity Protocol, users can contribute assets to liquidity pools and earn trading fees. This is especially beneficial for those seeking passive income within DeFi.
Q: Was there only one airdrop for $1INCH?
A: No. The first major airdrop occurred in December 2020, followed by another in February 2021 targeting a wider audience. While no official future drops have been announced, staying active in the ecosystem increases chances of eligibility for potential rewards.
Q: How does 1Inch compare to Uniswap?
A: While Uniswap is a standalone DEX, 1Inch is an aggregator that pulls liquidity from Uniswap and many others. This gives 1Inch an edge in price discovery and execution efficiency.
Q: Do I need ETH to use 1Inch?
A: If you're using the Ethereum network, yes—you’ll need ETH for gas fees. However, 1Inch supports multiple blockchains (like BSC, Polygon, Arbitrum), so you can use native tokens from those networks instead.
Final Thoughts
Since its launch in 2019, 1Inch Exchange has proven to be more than just another DeFi tool—it's a vital infrastructure component that enhances transparency, efficiency, and accessibility in decentralized trading. With continuous upgrades, strong community engagement, and innovative solutions like its liquidity protocol and smart routing engine, 1Inch is well-positioned for long-term growth.
As the DeFi sector evolves, platforms like 1Inch will play an increasingly important role in shaping the future of finance—democratizing access, reducing costs, and empowering users worldwide.
👉 Start optimizing your crypto trades today with next-generation DeFi tools.
Core Keywords: 1Inch Exchange, DeFi, DEX aggregator, crypto swap, $1INCH token, liquidity protocol, automated market maker, token airdrop