What is 1inch?
👋 New to this? Just start reading at the top — it begins in plain English and gets more detailed as you scroll. Jump to any level:
🟢 The simple version
Plain English — no jargon. Start here.
1inch is a DEX aggregator — when you want to swap tokens, instead of going to a single exchange like Uniswap, 1inch searches dozens of DEXes simultaneously and splits your trade across multiple pools to find the best overall price.
The fragmented DEX liquidity problem
DeFi has hundreds of decentralised exchanges — Uniswap, Curve, Balancer, SushiSwap, and many more — each with their own liquidity pools. The price for the same swap varies between them. On a small trade this difference might be negligible. On a large trade, the difference can be substantial — routing $100,000 through the wrong pool could cost thousands in price impact.
1inch solves this by acting as a router rather than an exchange. You tell 1inch you want to swap USDC for ETH. 1inch's Pathfinder algorithm scans all available DEX liquidity, calculates the optimal route — which might involve swapping USDC to DAI on Curve, then DAI to ETH on Uniswap v3, all in one transaction — and executes the full route atomically.
Split routing — how it gets better prices
Sometimes the best execution requires splitting a trade across multiple venues simultaneously. If you want to buy $500,000 of ETH, routing all of it through Uniswap would cause significant price impact (moving the price against you). 1inch might route 40% through Uniswap v3, 30% through Curve, 20% through Balancer, and 10% through a smaller pool — getting better average execution than any single route.
What 1INCH token does
1INCH is the governance token. Holders vote on protocol parameters including fee structures and liquidity mining incentives. 1inch also operates a limit order protocol — allowing users to set conditional swaps that execute automatically when price conditions are met — and a P2P trading system (1inch Fusion) where professional market makers fill orders competitively.
Is it legal in India?
Yes. 1INCH is a VDA under Indian law. 30% tax and 1% TDS apply. See India regulation.
🟡 A bit more detail
For when you want to go a little deeper.
1inch Fusion — the order execution upgrade
1inch Fusion (launched 2022) changed how large orders execute. In standard mode, 1inch executes swaps immediately at current prices. In Fusion mode, orders are submitted as intents — "I want to swap 100 ETH for at least X USDC within the next 10 minutes." Professional market makers (called Resolvers) compete to fill this order. The competition between Resolvers means users often get better prices than direct AMM execution, particularly on larger orders. Gas costs are embedded in the price rather than charged separately — users often pay zero gas in Fusion mode.
1inch consistently processes billions in monthly swap volume — a significant share of all DeFi trading volume. Institutional DeFi traders use 1inch for large-order execution where price impact matters. Wallet applications (including MetaMask, Trust Wallet, and others) use the 1inch API to power their in-app swap features — making 1inch the invisible routing engine behind many user-facing swap interfaces. 1inch also operates on multiple chains: Ethereum, BNB Chain, Polygon, Avalanche, Arbitrum, Optimism, and others.
The Pathfinder algorithm
1inch's Pathfinder is a dynamic routing algorithm that finds optimal swap paths across hundreds of DEX protocols and thousands of token pairs. It considers: direct pairs (USDC→ETH), one-hop routes (USDC→DAI→ETH), multi-hop routes, and split routes across multiple venues simultaneously. The algorithm is continuously updated as new protocols launch. For each potential route, Pathfinder estimates the output amount accounting for AMM pricing, fees, and price impact. It then selects the combination that maximises output for the given input.
Key 1inch metrics: monthly swap volume (vs Uniswap, the primary benchmark), number of integrated DEX protocols, Fusion mode adoption rate, and 1INCH governance participation. The aggregator value is demonstrated by comparing 1inch execution vs direct DEX execution for large swaps — the saving is measurable on-chain. Live data: CoinGecko · 1inch app.
🟣 The full technical picture
For the technically curious.
The aggregation smart contract architecture
1inch's AggregationRouterV6 (the current version) is the on-chain contract that executes multi-step swap routes in a single transaction. The router accepts a swap description (input token, output token, amount, minimum output, flags) and an encoded route. The route is a sequence of calls to different DEX contracts, with intermediate tokens passed between steps. All steps execute atomically — if any step fails, the entire transaction reverts. The user receives the final output token directly, never touching intermediate tokens.
The router also supports partial fill — if market conditions change between order submission and execution, the router can execute a partial fill that satisfies the minimum output requirement rather than failing entirely.
Source: 1inch documentation. docs.1inch.io
1inch Fusion: the intent-based execution model
Fusion orders use a Dutch auction mechanism. The order specifies a desired output that decreases over time — starting high (favourable for the user) and decaying toward a minimum acceptable amount. Resolvers can fill the order at any point during this auction. The first Resolver to fill earns the spread between the current auction price and the actual execution cost. This creates economic incentive to fill orders quickly and efficiently — Resolvers who can execute cheaply (through MEV, liquidity access, or other advantages) capture more spread. Users benefit from competitive filling without paying gas directly.
1inch's limit order protocol uses off-chain signature-based orders with on-chain settlement. A user signs an EIP-712 typed message specifying the trade parameters (maker token, taker token, amounts, expiry, conditions). This signed message is broadcast off-chain (stored on 1inch servers). Any taker (including 1inch's own bots or third-party market makers) can fill the order by calling the limit order contract with the signed message. The contract verifies the signature and executes the swap atomically. This architecture eliminates gas costs for order creation — only the filler pays gas on fill.
Key facts
- Protocol type: DEX aggregator + limit orders + Fusion
- Routing algorithm: Pathfinder (multi-hop, split routing)
- Chains: Ethereum, BNB Chain, Polygon, Arbitrum, Optimism, +more
- 1INCH supply: 1.5 billion (governance)
- Founded: 2019 (Sergej Kunz, Anton Bukov — hackathon project)
- Fusion: Intent-based orders, Dutch auction, zero gas for users