The Rise Of Decentralized Exchanges (1INCH)
Dear TradingView Friends,
Decentralized exchanges (DEX) are a unique new technology native to the cryptocurrency
space. Before this (even in traditional finance) all that we have known are centralized
exchanges or brokers. 3rd Party platforms or companies where we need to deposit funds
to before we can make any sort of trades and ultimately always being completely at the
mercy of that platform or broker.
When cryptocurrency started out and for most of its history, we’ve also only known
centralized exchanges like Coinbase, Bitstamp or Binance (and many others) where we
need to deposit fiat in order to be able to buy or trade cryptocurrencies. The problem with
centralized cryptocurrency exchanges is that there is even less certainty and security of
ownership of your funds with them. Most of these exchanges are likely not even officially
regulated with the appropriate licenses, meaning that whatever funds or cryptocurrency
that you hold on an exchange is completely at risk and at mercy of the exchange.
DEXs change the game completely. A DEX is an exchange with no centralized ownership
or control. It’s merely a platform that allows users to trade cryptocurrency without giving
up ownership of their funds. This is done by allowing the user’s funds to stay within their
own wallet that they control with their own private key (e..g Metamask), but connecting
that wallet to the DEX to allow trading under the users control. In other words, the DEX
has no ability to lock your account or freeze your funds.
The reason why centralized exchanges are so popular is because of liquidity. For every
buyer there needs to be a seller, without liquidity there would be no market. This is a big
reason why it took so long for DEXs to grow in popularity because there simply was little
to no liquidity meaning it was just not possible to trade (especially at large sizing) on a
DEX. That is slowly starting to change, and as more participants join the crypto market
and more liquidity gets added to DEXs, they are starting to gain more market share.
The DEX that got an incredible amount of attention and basically “kick-started” the DEX
movement was Uniswap. It had a very basic yet simple interface and made it possible for
anyone to connect their Metamask wallet and trade ETH for other ERC20 tokens in a
completely permissionless way, without any form of KYC needed.
After the huge success of Uniswap, competitors started to emerge, some more successful
than others.But keep in mind, the first version of something (especially in tech) is usually
not the best or most efficient version. Competitors who come after the first mover have the
advantage of being able to study and learn from the first-mover’s mistakes and improve
on things to make a better version.
1INCH is a competitor to Uniswap and could have a lot of upside growth potential to
capture more of the market.
What is 1INCH?
1INCH is a fairly new decentralized exchange (Dex) dAPP. Since we already covered
what a DEX is and why these DEXs are growing in popularity, let’s get a quick
understanding of what 1INCH is.
In their own words:
“The 1inch Network unites decentralized protocols whose synergy enables the most
lucrative, fastest and protected operations in the DeFi space.”
Source: 1inch.io
1INCH uses a combination of different decentralized protocols and brings them together
to create the best DEX experience for users. This is very important because as easy as
Uniswap is to use, it’s also lacking a lot of features I’d personally want to see so this is
where 1INCH could improve on that.
The Aggregation Protocol:
“The protocol provides aggregation information services on exchange protocols and
networks. The core part of the protocol is the 1inch v3 smart contract, which performs
runtime verification of transaction execution.
As a result, user funds can't be lost even in case of interaction with an unsafe liquidity
source. Since the smart contract ensures security, the protocol can be used in various
aggregation information services, such as Pathfinder, developed and run by the 1inch
Network.”
Source: 1inch.io/aggregation-protocol
The Liquidity Protocol:
“Earn with 1inch by providing liquidity to pools and collect extra rewards in 1INCH tokens
for participating in liquidity mining programs.”
Source: 1inch.io/liquidity-protocol/
Liquidity is the essential ingredient for any DEX to work, so having a well-incentivized
reward program for users to supply liquidity is crucial for 1INCH to continue to grow.
The DAO
“A decentralized autonomous organization (DAO), is an organization represented by rules
encoded as a computer program that is transparent, controlled by the organization
members and not influenced by a central government”
1INCH has their own DAO that governs the network parameters which enables the
holders of the 1INCH token to vote for key protocol parameters and in return collect
governance rewards. This DAO system allows the community members to participate,
benefit and vote for various protocol settings without lengthy voting periods. In other
words, it’s a more fair and efficient system of governance (this feature will only launch in
2022).
How Does 1INCH work?
1INCH currently supports both the Ethereum network and the Binance smart chain. You
can connect to the 1INCH dApp with several different wallets (my favorite at this time still
being Metamask). Simply accept the terms of service, choose your network, connect with
your wallet and you’re ready to start trading.
1INCH Team
There are currently more than 50 contributors to 1INCH, you can see a full list of the
contributors and further links to their LinkedIN profiles here:
Source: 1inch.io/contributors/
1INCH Finance & Partnerships
1INCH has a very impressive list of stakeholders which you can learn more about
1inch.io/contributors/
One of the reasons I think that 1INCH has an increased chance of success is that it’s
backed by Binance Labs.
“Binance Labs has recently led the $2.8 million funding round for decentralized exchange
aggregator 1inch. This is part of the ongoing effort by Binance Labs to support some of
the most impactful startups in the DeFi space.”
1INCH also has a serious investment from Pantera Capital.
“Pantera Capital Leads $12 Million Investment Round for 1inch, a Non-Custodial Crypto
Exchange Aggregator”
Money and funding alone doesn’t guarantee any sort of success, but having access to this
sort of capital as well as the investors and companies backing them really gives 1INCH a
strong vote of confidence in my opinion.
1INCH Token Details
“The 1INCH token enables protocol governance, allowing 1INCH stakers to vote for and
receive rewards. The token is applied in different capacities in the two existing protocols
and will be used in the tokenomics of all new protocols released by the 1inch Network.
1INCH is a multichain token, currently available on Ethereum and on Binance Smart
Chain (BSC) over a bridge.”
1INCH is currently an ERC20 token with a circulating supply of 159,916,877 tokens and a
maximum supply of 1,500,000,000 tokens.
“On the release day, 6% of the 1INCH token's total issuance of 1.5 bln was unlocked. The
remaining tokens will be gradually unlocked over a four-year period through December 30,
2024.”
“30% of the total token supply will go to community incentive programs. Another 14.5%
form the growth and development fund that will be used to issue grants and incentivize
developers to build on 1inch protocols. The remaining tokens will go to backers and core
contributors.”
Where To Buy 1INCH Tokens
1INCH can be purchased on several exchanges, including Binance.com, Kucoin and
Coinbase Pro but also on the decentralized exchanges 1INCH and Uniswap.
How To Store 1INCH Tokens
It’s possible to store your ERC20 1INCH tokens using Ledger or Trezor in combination
with Myetherwallet.com, on Metamask or any other wallet that stores ERC20 tokens.
Make sure that you have the ERC20 version of 1INCH if you plan to store it in an ERC20
wallet and the BSC version if you plan to store it on a BSC wallet.
Potential Dangers For 1INCH
As with all cryptocurrency projects, because the space is so new there are a lot of risk
factors associated with being among the first in an industry to develop and build new
technology and infrastructure (safety and security for users being a very important factor).
There is a lot of competition in the DEX space and it will be crucial for 1INCH to capture
enough of the market and users to be able to continue to grow and have future success. If
they fail to become a long-term popular exchange it could be detrimental for their whole
business model and of course as a result for the value of the 1INCH token.
There are also potential dangers of a legal and regulatory nature (which I’d assume are
very real for a project that’s allowing people to trade cryptocurrencies in a decentralized
way without any form of KYC). I have no idea if this will cause problems for their ability to
continue to operate, so it’s definitely something to be cautious of.
How To Store 1INCH Tokens
It’s possible to store your ERC20 1INCH tokens using Ledger or Trezor in combination
with Myetherwallet.com, on Metamask or any other wallet that stores ERC20 tokens.
Make sure that you have the ERC20 version of 1INCH if you plan to store it in an ERC20
wallet and the BSC version if you plan to store it on a BSC wallet.
Potential Dangers For 1INCH
As with all cryptocurrency projects, because the space is so new there are a lot of risk
factors associated with being among the first in an industry to develop and build new
technology and infrastructure (safety and security for users being a very important factor).
There is a lot of competition in the DEX space and it will be crucial for 1INCH to capture
enough of the market and users to be able to continue to grow and have future success. If
they fail to become a long-term popular exchange it could be detrimental for their whole
business model and of course as a result for the value of the 1INCH token.
There are also potential dangers of a legal and regulatory nature (which I’d assume are
very real for a project that’s allowing people to trade cryptocurrencies in a decentralized
way without any form of KYC). I have no idea if this will cause problems for their ability to
continue to operate, so it’s definitely something to be cautious of.
My Personal Thoughts:
1INCH is a fairly new token so there is not a lot of price history to work with.
It’s possible the 1INCH price has formed a slight wedge pattern here, prior to the recent dumop, of which a sustained
breakout to the upside could take us to the $11 level within the next months if not weeks.
However the recent failed break to the upside brought us in to the sub $4 range which is a huge buying opportunity for a potential 400% ROI.
I suspect the short term price action of 1INCH will depend a lot on whether or not Bitcoin
moves higher or not in the short term.
Stay ahead of the masses,
Seth
Decentralized exchanges (DEX) are a unique new technology native to the cryptocurrency
space. Before this (even in traditional finance) all that we have known are centralized
exchanges or brokers. 3rd Party platforms or companies where we need to deposit funds
to before we can make any sort of trades and ultimately always being completely at the
mercy of that platform or broker.
When cryptocurrency started out and for most of its history, we’ve also only known
centralized exchanges like Coinbase, Bitstamp or Binance (and many others) where we
need to deposit fiat in order to be able to buy or trade cryptocurrencies. The problem with
centralized cryptocurrency exchanges is that there is even less certainty and security of
ownership of your funds with them. Most of these exchanges are likely not even officially
regulated with the appropriate licenses, meaning that whatever funds or cryptocurrency
that you hold on an exchange is completely at risk and at mercy of the exchange.
DEXs change the game completely. A DEX is an exchange with no centralized ownership
or control. It’s merely a platform that allows users to trade cryptocurrency without giving
up ownership of their funds. This is done by allowing the user’s funds to stay within their
own wallet that they control with their own private key (e..g Metamask), but connecting
that wallet to the DEX to allow trading under the users control. In other words, the DEX
has no ability to lock your account or freeze your funds.
The reason why centralized exchanges are so popular is because of liquidity. For every
buyer there needs to be a seller, without liquidity there would be no market. This is a big
reason why it took so long for DEXs to grow in popularity because there simply was little
to no liquidity meaning it was just not possible to trade (especially at large sizing) on a
DEX. That is slowly starting to change, and as more participants join the crypto market
and more liquidity gets added to DEXs, they are starting to gain more market share.
The DEX that got an incredible amount of attention and basically “kick-started” the DEX
movement was Uniswap. It had a very basic yet simple interface and made it possible for
anyone to connect their Metamask wallet and trade ETH for other ERC20 tokens in a
completely permissionless way, without any form of KYC needed.
After the huge success of Uniswap, competitors started to emerge, some more successful
than others.But keep in mind, the first version of something (especially in tech) is usually
not the best or most efficient version. Competitors who come after the first mover have the
advantage of being able to study and learn from the first-mover’s mistakes and improve
on things to make a better version.
1INCH is a competitor to Uniswap and could have a lot of upside growth potential to
capture more of the market.
What is 1INCH?
1INCH is a fairly new decentralized exchange (Dex) dAPP. Since we already covered
what a DEX is and why these DEXs are growing in popularity, let’s get a quick
understanding of what 1INCH is.
In their own words:
“The 1inch Network unites decentralized protocols whose synergy enables the most
lucrative, fastest and protected operations in the DeFi space.”
Source: 1inch.io
1INCH uses a combination of different decentralized protocols and brings them together
to create the best DEX experience for users. This is very important because as easy as
Uniswap is to use, it’s also lacking a lot of features I’d personally want to see so this is
where 1INCH could improve on that.
The Aggregation Protocol:
“The protocol provides aggregation information services on exchange protocols and
networks. The core part of the protocol is the 1inch v3 smart contract, which performs
runtime verification of transaction execution.
As a result, user funds can't be lost even in case of interaction with an unsafe liquidity
source. Since the smart contract ensures security, the protocol can be used in various
aggregation information services, such as Pathfinder, developed and run by the 1inch
Network.”
Source: 1inch.io/aggregation-protocol
The Liquidity Protocol:
“Earn with 1inch by providing liquidity to pools and collect extra rewards in 1INCH tokens
for participating in liquidity mining programs.”
Source: 1inch.io/liquidity-protocol/
Liquidity is the essential ingredient for any DEX to work, so having a well-incentivized
reward program for users to supply liquidity is crucial for 1INCH to continue to grow.
The DAO
“A decentralized autonomous organization (DAO), is an organization represented by rules
encoded as a computer program that is transparent, controlled by the organization
members and not influenced by a central government”
1INCH has their own DAO that governs the network parameters which enables the
holders of the 1INCH token to vote for key protocol parameters and in return collect
governance rewards. This DAO system allows the community members to participate,
benefit and vote for various protocol settings without lengthy voting periods. In other
words, it’s a more fair and efficient system of governance (this feature will only launch in
2022).
How Does 1INCH work?
1INCH currently supports both the Ethereum network and the Binance smart chain. You
can connect to the 1INCH dApp with several different wallets (my favorite at this time still
being Metamask). Simply accept the terms of service, choose your network, connect with
your wallet and you’re ready to start trading.
1INCH Team
There are currently more than 50 contributors to 1INCH, you can see a full list of the
contributors and further links to their LinkedIN profiles here:
Source: 1inch.io/contributors/
1INCH Finance & Partnerships
1INCH has a very impressive list of stakeholders which you can learn more about
1inch.io/contributors/
One of the reasons I think that 1INCH has an increased chance of success is that it’s
backed by Binance Labs.
“Binance Labs has recently led the $2.8 million funding round for decentralized exchange
aggregator 1inch. This is part of the ongoing effort by Binance Labs to support some of
the most impactful startups in the DeFi space.”
1INCH also has a serious investment from Pantera Capital.
“Pantera Capital Leads $12 Million Investment Round for 1inch, a Non-Custodial Crypto
Exchange Aggregator”
Money and funding alone doesn’t guarantee any sort of success, but having access to this
sort of capital as well as the investors and companies backing them really gives 1INCH a
strong vote of confidence in my opinion.
1INCH Token Details
“The 1INCH token enables protocol governance, allowing 1INCH stakers to vote for and
receive rewards. The token is applied in different capacities in the two existing protocols
and will be used in the tokenomics of all new protocols released by the 1inch Network.
1INCH is a multichain token, currently available on Ethereum and on Binance Smart
Chain (BSC) over a bridge.”
1INCH is currently an ERC20 token with a circulating supply of 159,916,877 tokens and a
maximum supply of 1,500,000,000 tokens.
“On the release day, 6% of the 1INCH token's total issuance of 1.5 bln was unlocked. The
remaining tokens will be gradually unlocked over a four-year period through December 30,
2024.”
“30% of the total token supply will go to community incentive programs. Another 14.5%
form the growth and development fund that will be used to issue grants and incentivize
developers to build on 1inch protocols. The remaining tokens will go to backers and core
contributors.”
Where To Buy 1INCH Tokens
1INCH can be purchased on several exchanges, including Binance.com, Kucoin and
Coinbase Pro but also on the decentralized exchanges 1INCH and Uniswap.
How To Store 1INCH Tokens
It’s possible to store your ERC20 1INCH tokens using Ledger or Trezor in combination
with Myetherwallet.com, on Metamask or any other wallet that stores ERC20 tokens.
Make sure that you have the ERC20 version of 1INCH if you plan to store it in an ERC20
wallet and the BSC version if you plan to store it on a BSC wallet.
Potential Dangers For 1INCH
As with all cryptocurrency projects, because the space is so new there are a lot of risk
factors associated with being among the first in an industry to develop and build new
technology and infrastructure (safety and security for users being a very important factor).
There is a lot of competition in the DEX space and it will be crucial for 1INCH to capture
enough of the market and users to be able to continue to grow and have future success. If
they fail to become a long-term popular exchange it could be detrimental for their whole
business model and of course as a result for the value of the 1INCH token.
There are also potential dangers of a legal and regulatory nature (which I’d assume are
very real for a project that’s allowing people to trade cryptocurrencies in a decentralized
way without any form of KYC). I have no idea if this will cause problems for their ability to
continue to operate, so it’s definitely something to be cautious of.
How To Store 1INCH Tokens
It’s possible to store your ERC20 1INCH tokens using Ledger or Trezor in combination
with Myetherwallet.com, on Metamask or any other wallet that stores ERC20 tokens.
Make sure that you have the ERC20 version of 1INCH if you plan to store it in an ERC20
wallet and the BSC version if you plan to store it on a BSC wallet.
Potential Dangers For 1INCH
As with all cryptocurrency projects, because the space is so new there are a lot of risk
factors associated with being among the first in an industry to develop and build new
technology and infrastructure (safety and security for users being a very important factor).
There is a lot of competition in the DEX space and it will be crucial for 1INCH to capture
enough of the market and users to be able to continue to grow and have future success. If
they fail to become a long-term popular exchange it could be detrimental for their whole
business model and of course as a result for the value of the 1INCH token.
There are also potential dangers of a legal and regulatory nature (which I’d assume are
very real for a project that’s allowing people to trade cryptocurrencies in a decentralized
way without any form of KYC). I have no idea if this will cause problems for their ability to
continue to operate, so it’s definitely something to be cautious of.
My Personal Thoughts:
1INCH is a fairly new token so there is not a lot of price history to work with.
It’s possible the 1INCH price has formed a slight wedge pattern here, prior to the recent dumop, of which a sustained
breakout to the upside could take us to the $11 level within the next months if not weeks.
However the recent failed break to the upside brought us in to the sub $4 range which is a huge buying opportunity for a potential 400% ROI.
I suspect the short term price action of 1INCH will depend a lot on whether or not Bitcoin
moves higher or not in the short term.
Stay ahead of the masses,
Seth
Disclaimer
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