Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

1inch review and guide: How to trade and stake

Get the most out of the 1inch exchange aggregator by learning how to trade, stake and supply liquidity.

What is 1inch?

The 1inch Network is a decentralised exchange (DEX) and liquidity aggregator that enables users to trade digital assets across several exchanges, giving access to a wide range of trading options through a single interface.

It's not just a standard automated market maker (AMM) which prices assets based on a mathematical formula, but rather a liquidity aggregator that enables users to simultaneously gain access to pricing from a number of liquidity providers (LPs) and pools.

The 1inch Network does this by using smart contracts to reroute user trades between various DEXs. This allows 1inch to leverage the most optimal token and gas prices for transactions on the Ethereum, Polygon and Binance Smart Chain (BSC) blockchains.

Must read

1inch and other DeFi protocols are experimental works in progress. Funds deposited into 1inch or DeFi protocols in general can be at risk of smart contract vulnerabilities, malicious developers and hacks.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

How 1inch prevents price slippage

To grasp the advantages of using 1inch, you need to understand the concept of price slippage. Slippage is the difference between the price you thought you bought a token for and the actual price you paid.

For instance, let's say you want to buy $2,000 worth of ABC tokens on Uniswap, currently priced at $1 each. Problem is, the exchange only has $4,000 worth of ABC tokens in its pool. Since you want to buy nearly 50% of the exchange's supply, you probably won't be getting your 2,000 ABC tokens, as the $1 price will likely surge due to the spike in demand on the limited supply. In the end, you will be paying well over $1 per token (let's say $1.05) as the exchange's supply gets depleted. This is why Uniswap users must often set their slippage rates to 5% to ensure their transactions get executed.

However, 1inch exchange's trading protocol easily fixes this problem. By splitting orders across various exchanges, the 1inch protocol prevents the transaction from moving the market and causing slippage, thereby helping the buyer get a better overall price compared to a regular DEX.

The process is impossible to do manually since it requires several individuals who can execute transactions at lightning speed. Luckily, 1inch's arbitrage bots can do this for you in a single transaction.

Another noteworthy feature of the protocol is the Chi Gastoken, an ERC-20 token pegged to the gas price of Ethereum, allowing users to save on network gas fees. Users can buy CHI when Ethereum gas prices are low and consume them when gas prices are high, allowing them to trade at a low cost even during network congestion.

Back to top

How to use 1inch

The DEX aggregator and liquidity protocol offers 3 main services to users: trading, staking and liquidity mining. Let's explore each of them.

How to place a trade with 1inch

  1. Create a wallet. The 1inch exchange supports several web3 wallets but we recommend using MetaMask since it is the most widely used.
  2. Link your wallet to 1inch. Head over to https://1inch.exchange/ and tap the "Connect wallet" button and choose MetaMask. Once your wallet is linked, your Ethereum address should be found on top of the page.
  3. Trade. Choose which coin you'll pay with and which one you want to purchase by clicking on each drop-down menu. You may choose between "Maximum return" and "Lowest gas cost". The former option allows you to buy at the most preferred prices while the latter focuses on finding swap routes that provide the best gas cost savings. The "Lowest gas cost" option is typically useful for small trades.
    Picture not described
  4. Advanced options. 1inch exchange has an "Advanced Settings" option that can be activated by clicking on the "Settings" button in the upper right corner, which allows users to tinker with a trade's slippage tolerance, gas price, exchanges to be routed to, etc. As a beginner, you could skip this step.
  5. Picture not described

  6. Swap. After inputting the token and amount, click on "Swap". Your trade will automatically reflect in your MetaMask wallet in a few minutes or when the transaction is confirmed.

How to stake 1INCH tokens

Staking 1INCH offers 2 main benefits:

  1. You'll have a say in the future updates of the 1inch protocol.
  2. You'll receive 1INCH token rewards.

Staking requires a web3 wallet like MetaMask, some ETH to pay for gas, and of course, 1INCH tokens. We've already covered how to connect your MetaMask with the 1inch exchange in the previous section, so let's assume that your wallet is already linked.

  1. Unlock token. Click on "DAO" on top of the page to be directed to the staking interface on the right side of the screen. If you have 1INCH in your MetaMask, there should be an "Unlock Token" button on the staking interface under "Stake token". Click it.
    1inch Unlock Token
  2. Specify approval type. You can choose the one-time lock or the "Infinite Lock", which enables the wallet to interact with the staking contract perpetually, which would allow you to save on gas costs in the future in case you want to conduct multiple staking interactions.
    Picture not described
  3. Confirm approval request. After specifying your approval type, you will be prompted to confirm the approval request on MetaMask. Unless you want to change anything, click "Confirm".
    Picture not described
  4. Confirm the transaction. Input the amount of 1INCH you plan to stake before clicking the "Stake Token" button. You will be prompted on MetaMask to confirm the transaction.
    Picture not described
  5. Done! Your 1INCH tokens are now staked, which means you will be receiving rewards regularly. You are now also part of the governing community and can vote for different proposals concerning the protocol's development.

How to add liquidity with 1inch

Like most competitive DEXs, 1inch also offers liquidity mining schemes, which present a way for users to potentially earn yield. Liquidity mining is the process of depositing cryptocurrencies in an exchange's liquidity pool to enable trading and receive token rewards in return.

Before you begin your liquidity mining journey, make sure you understand the concept of "Impermanent Loss", which is one of the risks involved in the scheme.

  1. Connect your MetaMask to the 1inch web portal.
  2. Click on "DAO" at the top of the page and then click on "Pools" on the left side.
    1inch - click on DAO
  3. Pools. You will be directed to a list of available pools. Choose which pools you want to deposit liquidity into. You can also use the search bar to find specific pairs. Once you have found your chosen pair, click on "+" at the right of the pool.Note that you will need to deposit equal amounts in the USD value of each pair. For this example, we'll deposit liquidity into the 1INCH/DAI pool.
  4. Unlock. Enter the USD value or token amount you are willing to deposit, then click the button at the bottom to grant permission to use your tokens. You will also be prompted to confirm the transaction on your MetaMask.
  5. Picture not described
  6. Approval type. Choose between the one-time approval option or the "Infinite Unlock" (refer to the "how to place a trade" section to learn the difference between the 2). Confirm it in your MetaMask. Note that this process must be done twice, once for each token pair.
  7. Provide liquidity. Once everything is in place, click on "Provide Liquidity". You will be prompted to confirm on your MetaMask.
    1inch - Provide liquidity
  8. Done! Congratulations, you are a liquidity provider for the 1inch exchange. All you have to do now is let your funds sit and collect transaction fee payments.
Back to top

What does the 1INCH token do?

1INCH is an ERC-20 governance token that can be used to vote on proposals concerning the system parameters of the DEX aggregator protocol, including trading fees, governance rewards, price impact fees, etc. It also utilises holders to participate in governance through its staking rewards. Another way to earn 1INCH is to deposit them in the protocol's liquidity pools.

Risks of using 1inch

Smart contract risk

While 1inch has never been hacked, we can't rule out that possibility in the future. Furthermore, the "Infinity Unlock" feature is a double-edged sword, which saves you time and gas fees but it may also be an attack vector since it is a less secure process compared to unlocking each transaction separately.

Impermanent loss

Impermanent loss, which is the temporary depreciation of a liquidity provider's funds due to volatility in a trading pair, seems to be unavoidable when participating in liquidity mining. Luckily, traders and stakers do not face this risk.

Exchanges that offer 1INCH

Name Product Deposit methods Fiat Currencies Cryptocurrencies
Binance Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, GBP, EUR, RUB, TRY, NGN, UAH, PHP, CZK & 20+ more

314
cryptocurrencies

New users earn up to USD $500 in bonus rewards on qualified deposits and trades. Valid till 31 December 2021. T&Cs apply.
Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US.
UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
Kriptomat Cryptocurrency Exchange
Kriptomat Cryptocurrency Exchange
Credit card, Neteller, SOFORT, Skrill, SEPA
EUR, USD, GBP, BGN, HRK, CZK, HUF, PLN, SEK, TRY

198
cryptocurrencies

Finder Exclusive: Sign up with code FINDER15 and get EUR 15 when you spend over EUR 100 each month. T&Cs apply.
Buy a large selection of cryptocurrencies instantly via credit card or bank account after registering. Store your crypto conveniently in Kriptomat's multi-currency wallet.
KuCoin Cryptocurrency Exchange
KuCoin Cryptocurrency Exchange
Cryptocurrency, PayPal, Wire transfer, Credit or Debit Card, SEPA
USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND & 40+ more

458
cryptocurrencies

Finder exclusive: Sign up and use code 1xf56 for one month of VIP 1 benefits. Deposit/transfer more than 0.1 BTC to KuCoin within 7 days of registration for 1 month of VIP 2 benefits. T&Cs apply.
Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
Coinbase Digital Currency Exchange
Coinbase Digital Currency Exchange
Bank transfer (ACH)
USD, EUR, GBP, CAD, MXN, HRK, CZK, DKK, CLP, BGN & 10+ more

75
cryptocurrencies

Buy and sell major cryptocurrencies on one of the world's most renowned cryptocurrency exchanges.
Wirex Cryptocurrency Exchange
Wirex Cryptocurrency Exchange
Credit card, Cryptocurrency, Debit card, Bank transfer (SEPA), SWIFT
EUR, GBP, CAD, CZK, HUF, PLN, RON, HRK, USD

29
cryptocurrencies

Get a Welcome Bonus of USD 15 in WXT when you sign up with Wirex through Finder. T&Cs apply.
Spend a range of cryptocurrencies anywhere Visa is accepted with the Wirex Crypto Card and earn rewards.
Gate.io Cryptocurrency Exchange
Gate.io Cryptocurrency Exchange
Cryptocurrency
USD, EUR, GBP, HKD, SGD, AUD, CHF, MXN

871
cryptocurrencies

Finder exclusive: New users get $90 worth of Gate.IO points and an airdrop of $5 in GateTokens if trade volume exceeds $100 in their first week. T&Cs apply.
A feature-rich exchange with over 700 tokens including derivatives, yield farming and lending products.
loading

Compare up to 4 providers

Back to top

Our verdict: Should you use 1inch?

Whether to use or not use 1inch comes down to you and your needs. If you are only interested in trading major high-cap coins like BTC, ETH and ADA then a centralised exchange like Binance or Coinspot should suffice. In fact, they would likely offer better payment methods and lower fees. Ethereum-based DEXs tend to be more expensive due to network gas fees at the moment.

However, if you want to have sovereignty over your money or buy low-cap coins that aren't available on centralised exchanges (CEXs), then DEXs would be more favourable as they allow you to keep your assets in your wallet. In this case, 1inch could offer huge benefits since it leverages multiple DEXs to offer more token choices, better prices and lower fees.

Pros

  • Best prices for buying some tokens. While it can't compete with centralised exchanges in terms of overall fees yet, it does allow you to buy new low-liquidity tokens, which aren't listed on most exchanges, for a desirable price.
  • Low slippage. The protocol aggregates multiple DEXs, leveraging their combined liquidity to offer drastically lower slippage for each trade.
  • Excellent security track record. To be fair, the DeFi industry sets the bar low considering the countless exploited protocols in the last 2-3 years. Nevertheless, the fact that 1inch has never been compromised since its launch in 2019 is a testament to its robust security features.
  • User-friendly interface. 1inch is very easy to use, even for beginners. Some users might find its interface more user-friendly than centralised exchanges.
  • Low gas costs. Chi Gastokens allow users to pay with low gas fees, even during peak hours.

Cons

  • Fiat is not supported. 1inch does not offer fiat on/off-ramps.
  • Can be risky. As stated in the "Risks'' section, using 1inch poses some dangers for investors.
Back to top
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

More guides on Finder

  • Best Shiba Inu (SHIB) wallets

    Shiba Inu (SHIB) is an ERC20 token that can be stored in any Ethereum wallet. Pick a SHIB wallet for long-term storage, short-term trading, or both.

  • Dogecoin vs Shiba Inu

    We dive into the two most prominent meme coins to understand their similarities and differences, and to compare them on supply and other features.

  • How to buy Illuvium (ILV) in South Africa

    This guide will show you step-by-step instructions on how to buy the Illuvium (ILV) token as well as a list of exchanges you can trade it on.

  • How to stake NEO

    NEO staking involves locking up NEO tokens to earn rewards.

  • How to stake Avalanche

    Learn how to stake AVAX tokens and earn rewards by supporting the Avalanche blockchain.

  • SuperRare Review and Guide

    True to its name, SuperRare is an NFT marketplace that focuses on crypto art tokenised on the Ethereum blockchain. The result is part marketplace and part social network for the artistic side of the NFT community.

  • How to buy Waves (WAVES) in South Africa

    This guide will show you step-by-step instructions on how to buy the Waves (WAVES) token as well as a list of exchanges you can trade it on.

  • How to buy Bitcoin Gold (BTG) in South Africa

    This guide will show you step-by-step instructions on how to buy the Bitcoin (Gold) token as well as a list of exchanges you can trade it on.

  • How to buy Avalanche (AVAX) in South Africa

    This guide will show you step-by-step instructions on how to buy the Avalanche (AVAX) token as well as a list of exchanges you can trade it on.

  • How to buy Quickswap (QUICK) in South Africa

    This guide will show you step-by-step instructions on how to buy the Quickswap (QUICK) token as well as a list of exchanges you can trade it on.

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy Policy and Terms.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site