ETHNewYork, a blockchain hackathon in New York, was where it all started for 1inch. In 2019, Sergej Kunz and Anton Bukov, both developers with backgrounds in smart contract security, developed a product at the event and went on to found the decentralized exchange. Little did they know in a few years that 1inch would become the second leading Ethereum decentralized exchange in terms of daily active users (DAU).

Before their joint venture, Kunz had previously worked in aggregation systems and a Mimacom consultancy, and Bukov worked as an iOS developer.

Mooniswap and 1inch: A Founder’s Vision 

With the aim to give users the best possible swap rates and a decentralized exchange, Kunz and Bukov created the 1inch Aggregation Protocol — a decentralized exchange (DEX) aggregator that looks for the cheapest prices to give customers the best prices. The DEXs it draws on to aggregate include Uniswap, Balancer, and 1inch‘s own liquidity protocol (formerly Mooniswap). In June 2021, 1inch’s trading volume hit approximately $250 million each day.

In August 2020, Mooniswap, 1inch’s own liquidity protocol, was launched. 1inch referred to it as a “cutting-edge automated market maker”, and it redistributes earnings to liquidity pools to protect traders on the platform from front-running attacks. In a nutshell, liquidity providers can capture profits from arbitrageurs, those who exploit market inefficiencies, to maximize revenue.

In December 2020, the fully integrated 1inch Liquidity Protocol replaced Mooniswap. The next year saw developments in the 1inch Wallet app for iOS in April, as well as the 1inch Limit Order Protocol, which replaced the app’s previous limit order functionality and got rid of all protocol fees on the platform. The 1inch Limit Order Protocol enabled users to utilize 5 different security audits and buy or sell at price targets on Ethereum, BSC, and Polygon.

1inch Token: A Christmas Wish

On Christmas Eve 2020, the network launched 1inch Token, its very own cryptocurrency. 1inch Token is a governance token, meaning it could be used to stake on the exchange to vote for how the company is run. Almost everyone who had used the exchange before was airdropped as the token as a part of the launch. 

As of June 2022, its trading price is $0.58 USD and the market cap for the token, or the total value of the cryptocurrency, is $310.2 million.

What’s Next for 1inch?

In May 2022, 1inch partnered with Travala, a Binance-backed travel agency. This partnership would allow 1inch holders to access and book Travala’s products. Kunz stated that “mass adoption of the company’s products and solutions is the top-most priority of the aggregator.” Ventures into industries with crypto-friendly companies is expected, as the DeFi platform closed a Series B funding round at the end of 2021 at $175 million. 

“This was not about the money,” Kunz said. “We were looking for people and VCs who can help us build a new product and push the whole network forward.” Looking to the future, the network will continue to look for more utilities for its token and new ways to obtain exposure to a larger audience of users. 

In 2022, 1inch is looking to launch a protocol insurance product and conduct trials offering DeFi services to traditional banking institutions. 

ABOUT THE WRITER

Katherine Zhang is a contributor to Identity Review from the University of California, Berkeley.

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