summary: 1inch.exchange (1INCH) is a decentralized exchange (DEX) aggregator that sources liquidity from various exchanges 
content: 1inch.exchange (1INCH) is a decentralized exchange (DEX) aggregator that sources liquidity from various exchanges and is capable of splitting a single trade transaction across multiple DEXs. In December 2020, a month after the successful launch of 1inch v2, the 1inch team announced the closure of a $12 million funding round from institutional investors, including Pantera Capital, ParaFi Capital, and Nima Capital. Trivia The 1INCH Foundation announced its first airdrop on December 25, 2020. A second airdrop was announced on February 12, 2021. 1inch was founded by Sergej Kunz and Anton Bukov over the course of the ETHNewYork hackathon in 2019. The two had earlier met during a live stream of Kunz’s YouTube channel (CryptoManiacs), and began entering hackathons together, winning a prize at a hackathon in Singapore as well as two major awards from ETHGlobal. 1INCH Airdrops The 1INCH Foundation announced the first airdrop on December 25th, 2020. The second one was announced on February 12, 2021. The February airdrop provided another distribution under the same conditions as the December airdrop, to ensure that users who have not yet received their tokens could have a second chance of collecting them. The February airdrop also distributed 6 million 1INCH tokens to some Uniswap traders. History !1inch_Team-710x458jpg.jpegLeft to right: 1inch CTO Anton Bukov, CEO Sergej Kunz and smart contract developer Mikhail Melnik. The 1inch.exchange was founded by two Russian developers, Sergej Kunz and Anton Bukov, who came together to audit smart contracts. Before establishing the DEX aggregator, the two developers partook in and won various bounties at hackathons for MakerDAO, Set Protocol, and Kyber Network. The scheme for 1inch was developed just weeks before the ETHNewYork convention, while the two co-founders were playing around with arbitrage bots. The project was then expanded during the hackathon event, creating the first iteration of the exchange: a minimum viable product (MVP) that aggregated Kyber Network, Bancor Network, and Uniswap liquidity. The name of the project, 1inch, was inspired by Bruce Lee’s legendary “1inch punch”, an epitome of efficiency in martial arts, and aims to symbolize the project's efficiency in the crypto industry. At the end of July 2020, 1inch reached $1billion in total trading volume. Linch v2 On November 5, 2020, the 1inch team unveiled 1inch’s version 2, having the following features: Pathfinder: The main component of the release is Pathfinder, an API containing a new discovery and routing algorithm, which finds the best possible paths for a token swap in the shortest possible time. In addition to splitting a swap across multiple supported liquidity protocols, the new Pathfinder algorithm utilizes multiple ‘market depths’ within the same protocol. UI improvements: Working on the new user interface, the team took into account suggestions from users and aimed to make the UI as intuitive and user-friendly, as possible. The team also added a table showing a user’s return value in USD. Previously, the platform showed how many coins a user gets and the size of the gas fee. Now, the user sees an entire value of their deal in USD. Speed: compare quote response time was reduced from 6 sec to 0.4 sec; the page load time was reduced from 5 sec to 1 sec; API quote response time was reduced from 5 sec to 0.4 sec. Versatility: 1inch v2 supports all major protocols: Uniswap V1, Uniswap V2, WETH, Balancer, Curve, Chai, SushiSwap, Kyber, Oasis, Mooniswap, Compound, Aave, yEarn, Bancor, PMM, Cream Swap, Swerve, BlackholeSwap, Value Liquid, DODO, Shell. Collateral tokens: Thanks to Pathfinder, users are able to pack, unpack and migrate collateral tokens from lending protocols Aave and Compound, as part of the swap path. Partial and dynamic fill mechanism: When a user makes a swap on 1inch using splits or various routes, 1inch makes sure that the swap is done at the rate the user was offered in the UI. If the rate on one of the protocols has changed, one part of the route can be easily cancelled. Instead of a failed transaction, the user’s unswapped coins return to their wallet. The dynamic component comes into play to allow parts of the swap to immediately switch to another protocol in the split or path. For instance, a swap is split between Uniswap, SushiSwap and Balancer. If the Uniswap swap has failed, the entire swap will switch to Sushiswap and Balancer. This allows the swap to still execute within the bounds of the user’s acceptable rate. Swap overhead optimizations: Version 2 reduces aggregation overhead gas costs to almost zero for direct swaps, e.g. on Uniswap. Complex (multi-path) swaps are also optimized to minimize gas costs. Maximum return and lowest gas: Among Pathfinder’s new features are also the ‘Maximum return’ and the ‘Lowest gas’ options. If a user chooses the former option, complex routes are used for the swap to make sure that the user gets the best rates. In the ‘Lowest gas’ option, swaps are done at market rates, without splits across different exchanges or complex routes, which enables the user to pay the lowest possible gas fee. 1inch v2 smart contract passed 5 security audits: CertiK, Hacken, Scott Bigelow, Mix Bytes, and Chainsulting. The team is waiting to receive completed audits from OpenZeppelin, ConsenSys diligence, SlowMist, Haechi Labs, and Coinfabrik soon. Integrations !0_xCB0czYU_GFN1qr7png.png 1inch V2 launched in November 2020 In April 2020, 1inch added native integration with Curve’s sUSD exchange liquidity pool and Synthetix staking. Users who provide liquidity to the Curve pool, collect an annual percentage rate (APR). In addition, they receive Curve Pool Tokens, which can be staked in the Synthetix staking pool to collect an extra reward in Synthetix Network Tokens (SNX) given away by that pool. Each week, Synthetix distributes 64,000 SNX. The Curve sUSD pool became available on 1inch as a native tool, so users don’t have to go first to Curve’s website and then to that of Synthetix. All operations such as providing liquidity to Curve and staking sUSD on Synthetix can be done within 1inch.exchange unified interface. In May 2020, 1inch added support for Compound cUSDT token in protocol and dApp. The main idea behind cUSDT is that a user provides liquidity to the platform in Tether (USDT) and collects an interest income. With the cUSDT integration, it is possible to do swaps between any ERC20 tokens and cUSDT with the low price slippage. In May, 1inch integrated Uniswap V2 protocol. In the UI, users can see a list of all Uniswap V2 liquidity pools for selected tokens, including the pool’s capitalization and annual percentage rate (APR). Funds provided by users to any Uniswap pool are used for token swaps, and for each swap, a transaction fee is charged. The collected fees are distributed between all users who have provided liquidity to the pool in the form of interest, depending on their share of liquidity provided to the pool. In September 2020, 1inch partnered with TRON for JustSwap and Mooniswap integration. Under the partnership deal, 1inch fully integrated with JustSwap, TRON’s decentralized trading protocol for automated liquidity provision, and 1inch's AMM, Mooniswap, integrated into TRON’s blockchain. Liquidity providers on the TRON blockchain benefit from Mooniswap’s “virtual balances”, which slow down price changes, preventing arbitrage traders from earning up to 100% of the swap slippages and therefore increasing liquidity providers’ earnings. TRON also rewards liquidity providers on Mooniswap with TRON tokens as an additional incentive and reward. In September, 1inch announced a partnership with xBTC, Social Capital’s first token. As part of the partnership, xBTC was supposed to have an exclusive IMO (Initial Mooniswap Offering). Sergej Kunz, 1inch co-founder and CEO, said: “IMOs on 1inch are more attractive for token issuers than other platforms because we provide protection from so-called front running. In turn, 1inch liquidity providers will benefit from the xBTC IMO as there will be substantial trade volumes at the initial stage and they’ll be able to collect significant interest.” In September, 1inch announced cooperation with cybersecurity firm Hacken. To add an extra layer of protection for users, 1 inch decided to collaborate with Hacken in several areas, including auditing code, APIs, and infrastructure. In November 2020, 1inch announced an integration with MyEtherWallet, a wallet and client interface for interaction with the Ethereum blockchain. 1inch swaps became available directly in MEW users’ wallets. Kosala Hemachandra, MyEtherWallet’s founder and CEO, said: “1inch has built a DEX aggregator that embodies some of the best aspects of decentralization. Working with them to make their platform more accessible to MEW users was an easy decision for us. DeFi is still in an experimental stage, and companies like 1inch are paving the way for greater adoption.” Chi Gastoken In June 2020, the 1inch team launched Chi, a gastoken that allows users to save on gas. The Chi Gastoken is an ERC20-standard token that is meant to be used on the 1inch.exchange to pay transaction costs. Chi is pegged to the Ethereum network’s gas price. When the gas price is low, the Chi price is also low, and the opposite. Just like gastoken, Chi is tokenized gas on the Ethereum network. The only difference is that Chi is used on 1inch and Curve, while gastoken is used across the entire Ethereum network. Minting Chi saves users 1% in comparison with minting gastoken (GST2). The burning of Chi saves users 10%, compared with GST2. In all other respects, Chi and GST2 are similar. To get a discount on a transacti