What is Chi Gastoken (CHI)?
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🟢 The simple version
Plain English — no jargon. Start here.
Chi Gastoken is a token created by 1inch that exploits Ethereum's storage refund mechanism — you mint CHI when gas is cheap, then burn CHI when gas is expensive to get a refund credit that reduces your effective gas cost for large transactions — a gas optimisation technique that was most useful before Ethereum's EIP-1559 fee mechanism change.
How Chi Gastoken works
Ethereum's EVM has a mechanism where destroying a storage slot (setting a value to zero) triggers a "gas refund" — you get back some ETH for cleaning up state. Chi Gastoken exploits this: each CHI token, when minted, creates storage slots. When you burn CHI, those slots are destroyed, triggering refunds. By minting CHI when gas is cheap (e.g., at 10 gwei) and burning CHI during expensive transactions (e.g., at 100 gwei), you effectively receive a gas credit at the higher rate. You're essentially "storing" cheap gas for later use.
1inch integrated CHI Gastoken into its DEX aggregator — when users swap via 1inch, they could optionally burn their CHI tokens to offset gas costs. During the 2020-2021 DeFi boom when Ethereum gas costs were extreme (sometimes 1000+ gwei for urgent transactions), CHI was genuinely valuable for high-frequency traders and protocols making many transactions.
Post-EIP-1559 relevance
In August 2021, Ethereum's EIP-1559 upgrade changed the fee mechanism and significantly reduced the gas refund amount. The maximum refund was reduced from 50% to 20% of gas used. Combined with how 1inch integrated CHI, this substantially reduced CHI's value proposition. CHI still provides some benefit for certain large, gas-intensive transactions but is far less useful than it was pre-EIP-1559. 1inch moved toward other gas optimisation approaches.
Is CHI legal in India?
Yes. CHI qualifies as a Virtual Digital Asset (VDA) under Indian law. 30% tax on gains and 1% TDS applies. Always consult a tax professional.
🟡 A bit more detail
For when you want to go a little deeper.
Chi vs GST (GasToken)
Chi Gastoken was not the first gas token. GST1 and GST2 (earlier "GasToken" projects) pioneered the concept. Chi improved on these with: more efficient mint/burn mechanics, direct integration with 1inch's aggregator, and better tooling. Chi became the more widely adopted gas token during the 2020-2021 period. Post-EIP-1559, both CHI and GST are significantly less useful, but CHI still has a functional niche for specific high-gas-intensity use cases.
Current use cases for CHI
Post-EIP-1559, CHI's use cases are narrower: (1) Very large batch transactions where the reduced 20% refund still produces meaningful savings on huge gas bills; (2) Arbitrage bots that execute at specific gas prices and can benefit from CHI on high-gas-use transaction types; (3) Holders who accumulated CHI pre-2021 and still hold it. For most retail users, CHI is not worth actively accumulating post-EIP-1559. The token is documented here for educational completeness and because it represents an interesting chapter in Ethereum's gas optimisation history.
CHI's core value proposition was significantly reduced by EIP-1559 (August 2021). If you're researching CHI because you saw historical price charts or articles from 2020-2021, understand that the context has changed. Current utility is much smaller. The token still trades but primarily as a speculative asset rather than a functional gas tool for most users. Live data: CoinGecko
🟣 The full technical picture
For the technically curious.
Key facts
- Token: CHI (gas optimisation token, ERC-20)
- Creator: 1inch Network
- Chain: Ethereum
- Mechanism: Exploits Ethereum storage refund — mint cheap, burn expensive
- Peak utility: 2020-2021 DeFi boom (extreme gas prices)
- EIP-1559 impact: August 2021 — reduced max refund from 50% to 20%, diminishing CHI value
- Current status: Functional but much less useful than pre-EIP-1559
- Related: GST1/GST2 (predecessor gas tokens), 1inch (creator)
EIP-1559 and the gas refund change
Pre-EIP-1559: Ethereum gas refunds could be up to 50% of gas used for a transaction (by burning storage). A high-CHI burn could reduce your effective gas cost by nearly half. Post-EIP-1559: The EIP-3529 (bundled with London hard fork) reduced maximum gas refunds to 20% of gas used and removed gas refunds for SELFDESTRUCT operations. The reduced refund cap meant CHI's benefit shrank proportionally. Additionally, EIP-1559's base fee mechanism (which burns ETH) changed how gas price spikes work — they became shorter and more predictable, reducing the opportunity window for gas token strategies. The combination made CHI far less economically valuable for most use cases.