Cover policies are available for users of 1inch v2 from the Popular DeFi dApps diversified cover pool, on the Ethereum chain and on Arbitrum.
About 1inch#
Anton Bukov and Sergej Kunz created the 1inch MVP at the ETHNewYork hackathon in 2019.
The 1inch protocol is a decentralized exchange aggregator that enables users to find and execute trades across multiple decentralized exchanges (DEXs) in a single transaction.
In order to receive the best and most efficient price for a swap, one must check for the best price across all the DEXs. Manually checking is not efficient and does not enable complex trading routes and paths. Thus, sophisticated DEX aggregator algorithms are key to saving money on swaps.
1inch protocol version 2 introduced several key improvements and new features that set it apart from the first version, like a new and improved version of the Pathfinder algorithm. This new version is faster and more efficient than the original and is better at finding the best possible paths for trades across multiple DEXs.
In addition, version 2 of the protocol introduced limit orders, which allow users to set a specific price at which they want to buy or sell a token, giving users more control over their trades and can help minimize price slippage. The new version also optimizes gas usage by allowing users to pay for their transactions using multiple tokens, not just ETH. This can help reduce gas costs and make the platform more accessible.
Version 2 supports liquidity pools for a wider range of tokens than the first version, which means that users have access to more liquidity and trade even more tokens on the platform.
Overall, 1inch protocol version 2 is faster, more efficient, and more secure than the first version. The introduction of limit orders, the support for more liquidity pools, and the gas optimization features make it a more versatile and accessible platform for users.
What Makes the 1inch Protocol Unique?#
1inch protocol aggregates liquidity from multiple DEXs, including Uniswap, Kyber Network, Bancor, and others, to provide users with the best prices and lowest slippage when trading tokens. This enables users to access a larger pool of liquidity and ensures that trades are executed at the best possible price.
Pathfinder algorithm: The 1inch protocol uses a unique algorithm called "Pathfinder" to route trades across multiple DEXs and liquidity pools in a way that maximizes the amount of tokens users receive for their trades. This algorithm takes into account factors such as liquidity, trading fees, and price impact to ensure that users get the best possible outcome for their trades.
Gas optimization: The 1inch protocol optimizes gas usage by batching multiple trades into a single transaction, which reduces the cost of executing trades. This is particularly useful for users who are looking to make small trades or want to save on gas fees.
User-friendly interface: The 1inch protocol has a user-friendly interface that makes it easy for users to find and execute trades. Users can choose between simple and advanced trading interfaces, available on both the platform and mobile app.
Community governance: The 1inch protocol is governed by a decentralized autonomous organization (DAO), which enables the community to participate in the decision-making process. Token holders can vote on proposals and changes to the protocol, which ensures that the platform evolves in a way that is aligned with the needs and preferences of its users.
In conclusion, the 1inch protocol's unique features make it a powerful tool for trading tokens across multiple DEXs. By aggregating liquidity pools, optimizing gas usage, and using a sophisticated routing algorithm, the 1inch protocol provides users with a complete trading experience. Additionally, its user-friendly interface and community governance model ensure that the platform is accessible, transparent, and responsive to the needs of its users.
Financials#
Since its launch, 1inch protocol has raised nearly USD 190 million from a variety of investors, including Fenbushi Capital (the lead investor in Neptune Mutual’s seed round).
In December 2020, the protocol raised $12 million in seed capital in a funding round led by Pantera Capital, with participation from other leading blockchain investors such as ParaFi Capital, Spartan Group, and Blockchain Capital.
As of May 2023, 1inch protocol's financial position is not publicly available. However, the protocol has announced several partnerships and integrations with other DeFi projects, which suggests that it is continuing to expand and develop its ecosystem. Additionally, the protocol's native token, 1INCH, has been listed on numerous exchanges, and has a fully diluted market capitalization of just under 628 million USD.
1inch protocol has a strong presence on social media, with active accounts on Twitter, Reddit, Medium, and Telegram. The protocol uses these channels to communicate with its community, share updates and news, and provide support to users.
The 1inch Twitter account has over 1.4 million followers and is frequently updated with news about the protocol, market analysis, and announcements. The team also engages with the community through Twitter polls, AMAs, and giveaways.
The 1inch Reddit community has over 14,000 members and is a hub for discussions about the protocol, DeFi, and the broader blockchain industry. The team regularly posts updates and news on the subreddit, and users can also ask questions and engage with the team and community members.
The 1inch Medium blog features in-depth articles and analysis about the protocol, as well as broader topics related to DeFi and the blockchain industry. The team also uses the blog to announce new features and partnerships and to share their vision for the future of decentralized finance.
Finally, the 1inch Telegram channel has over 23,700+ members and is a hub for real-time discussions about the protocol, market trends, and trading strategies. The team is active on the channel, answering questions and providing support to users.
Cyber Security Track Record#
1inch is a decentralized exchange aggregator that allows users to find and execute trades across multiple DEXs in a single transaction. Since its launch in 2020, 1inch has become one of the most popular DeFi protocols in the Ethereum ecosystem, with over $4 billion in total value locked as of May 2023.
When it comes to security, 1inch has a relatively good track record. The protocol has undergone multiple security audits from reputable firms such as Open Zeppelin, Trail of Bits, and ConsenSys Diligence.
On January 11, 2020, the 1inch team discovered a critical vulnerability in the flash loan feature of the Fulcrum protocol on the Ethereum mainnet. User funds worth approximately $2.5 million were at risk from three different pools, which could have been stolen within a single transaction. They prepared a proof of concept through a white-hat operation involving only 1 weiDAI worth of assets and submitted the report to be reviewed and resolved by the team.
On September 15, 2022, the team once again discovered a critical vulnerability in Profanity, an Ethereum vanity address tool. The report mentioned that the private keys to the addresses generated on Profanity could be easily calculated using brute force attacks and that users' assets worth over $3.3 million might have already been secretly hacked.
Overall, the 1inch team has demonstrated a commitment to security and a proactive approach to resolving any issues that arise. As with any DeFi protocol, users should exercise caution and perform their own due diligence before interacting with the platform.
