Key Takeaways
1inch is a DeFi aggregator that searches for the best token swap rates across multiple decentralized exchanges (DEXs).
Fusion Mode is an intent-based execution model where professional resolvers compete to fill user orders, often providing better prices and built-in MEV protection.
Fusion+ extends this model to cross-chain swaps, allowing users to exchange tokens across different blockchains without giving up custody of their funds.
1INCH is the protocol's native token, used for governance, staking, and delegation within the 1inch DAO.
Liquidity in decentralized finance (DeFi) is fragmented across dozens of decentralized exchanges. The price of the same token can differ from one platform to another, and manually comparing rates before every trade is impractical. 1inch was built to solve this problem. Rather than asking users to check multiple platforms, 1inch connects to them all and automatically identifies the most efficient route for each swap.
Launched in 2019, 1inch has grown into one of the most widely used DeFi aggregation protocols. Its infrastructure spans routing, limit orders, cross-chain swaps, and a native mobile wallet, all governed by the 1inch DAO through the 1INCH token.
History of 1inch
1inch was founded in June 2019 by Sergej Kunz and Anton Bukov during an ETHGlobal hackathon in New York. The two developers built the initial prototype in 18 hours to address what they saw as a core usability problem in DeFi: users had no straightforward way to find the best available swap rate across the growing number of DEXs.
The protocol expanded steadily after launch, adding limit orders, Fusion Mode, and multi-chain support. Today, 1inch is governed by two entities: the 1inch Foundation, which oversees ecosystem development and the 1INCH token, and the 1inch DAO, where token holders vote on protocol upgrades, fee structures, treasury allocation, and Fusion Mode parameters.
How 1inch Works
Aggregation Protocol
The Aggregation Protocol is the core component responsible for token swaps. When you initiate a trade, it queries hundreds of liquidity sources in real time and uses the Pathfinder routing algorithm to determine the most efficient execution path. Pathfinder weighs both token prices and gas costs before splitting the trade across multiple DEXs or liquidity pools within the same DEX to minimize slippage and reduce overall cost.
All trades are executed through smart contracts that run verification checks during execution. Each swap is processed as an atomic transaction, meaning it either completes in full or is entirely reversed. This protects users even if one of the liquidity sources fails mid-execution. The current Router v5.6 includes gas-optimized calldata that refunds approximately 20-30% of unused gas, reducing costs on high-traffic networks such as Ethereum.
Fusion Mode
Fusion Mode is an intent-based execution model that changes how orders are filled. Instead of routing a trade directly through smart contracts at the moment of submission, Fusion Mode broadcasts the user's trading intent to a network of professional fillers called resolvers. These resolvers compete to fill the order on the user's behalf, which frequently results in better execution than direct routing.
Fusion Mode also provides built-in protection against front running and MEV (maximal extractable value) attacks. Because the order is not broadcast directly to the public mempool in the same way as a standard transaction, it is more difficult for bots to exploit the trade before it is confirmed. Fusion Mode v2, released in 2025, delivers approximately 30-50% gas savings on Ethereum mainnet through batched multicalls and supports partial fills, allowing large orders to be completed incrementally rather than requiring a single full execution.
Fusion+
Fusion+ extends the Fusion Model to cross-chain swaps. It allows users to exchange tokens across different blockchains without using a traditional bridge or giving up custody of their funds during the process. The architecture is decentralized and intent-based: resolvers pool liquidity from across supported networks and compete to complete the cross-chain order. As of 2025-2026, Fusion+ supports swaps between Ethereum, BNB Chain, and other EVM-compatible networks, with continued expansion ongoing.
Limit Order Protocol
The Limit Order Protocol gives traders control over when their trades execute. Rather than accepting the current market price, you can set a target price and the trade will only proceed when that condition is met. For instance, you might place an order to sell a token only if its price rises to a specified level. See our guide to limit orders for a broader explanation of how this order type works.
When you create a limit order on 1inch, it is stored in an off-chain database rather than submitted directly to the blockchain. Once conditions are met, the order can be filled by any party, including the Aggregation Protocol. The party filling the order covers the gas fees, and 1inch does not charge extra fees for this service. On illiquid pairs, limit orders use RFQ-style execution, where counterparties specify the exact terms they are willing to accept before a match is made.
Key Features
Pathfinder routing
Pathfinder is the real-time routing algorithm that powers the Aggregation Protocol. It aggregates data from over 500 liquidity sources across EVM networks, Solana, and TON, calculates the most efficient trade path, and can split a single transaction across multiple venues. Pathfinder filters out low-liquidity pools that are more susceptible to price manipulation and uses liquidity-weighted pricing to ensure reliable rate calculations. It considers gas costs alongside token prices so that a theoretically better rate on a less liquid venue does not result in a worse outcome after fees.
Spot Price Aggregator
The Spot Price Aggregator provides accurate token pricing for decentralized markets. It pulls price and liquidity data directly on-chain from multiple DEXs across EVM-compatible networks, filters out pools with low liquidity, and converts wrapped tokens back into their underlying base assets for consistent cross-platform pricing. The aggregator outputs liquidity-weighted averages rather than raw quotes, making it more resistant to short-term price manipulation. It is designed for off-chain use; relying on it directly within smart contracts could expose those contracts to oracle manipulation.
The 1inch Wallet
The 1inch Wallet is a non-custodial mobile wallet that integrates the full 1inch ecosystem into a single application. Users can swap tokens, stake assets, track portfolio performance, and connect to decentralized applications (DApps) directly from the wallet interface. It supports Ledger hardware wallet integration for cold storage access and includes a built-in scam detection feature that automatically scans websites and DApps for suspicious activity before you interact with them. Spend previews, added in 2025, show users the expected outcome of a transaction before confirmation, reducing the risk of signing unexpected approvals.
The 1INCH Token
1INCH is the native token of the 1inch ecosystem with a maximum supply of 1.5 billion tokens. It is a governance token that gives holders a direct role in shaping the protocol's direction. Its primary uses include:
Governance: 1INCH holders vote on protocol upgrades, fee parameters, treasury spending, and the operating rules of Fusion Mode.
Staking: By staking 1INCH, holders can earn rewards distributed through DAO initiatives and resolver programs, while also contributing to protocol security.
Delegation: Holders who prefer not to vote directly can delegate their voting power to trusted representatives or active resolvers, allowing the protocol to remain well-governed even when individual participation is low.
The 1inch DAO governs the protocol through on-chain proposals and voting. For a general introduction to how decentralized governance works, see our article on decentralized autonomous organizations.
How to Use 1inch
The basic swap process on 1inch follows these steps:
Connect wallet: Open the 1inch application and connect your preferred Web3 wallet.
Select tokens: Choose the token you want to sell and the token you want to receive, then enter the amount. A quote will show the expected output.
Approve token: If this is your first time trading a particular token, complete an approval transaction so the smart contract can interact with it. This requires a small gas fee.
Adjust settings: Review the trade and configure preferences such as slippage tolerance, gas strategy, and routing options. For large trades, consider enabling Fusion Mode for MEV protection.
Execute swap: Confirm the trade details and submit the transaction.
Confirm and wait: Approve the final confirmation in your wallet and wait for the blockchain to process the swap. The new tokens will appear in your wallet once complete.
Closing Thoughts
1inch simplifies DeFi trading by aggregating liquidity across hundreds of DEXs and optimizing trade execution through Pathfinder, Fusion Mode, and Fusion+. Its native token, 1INCH, provides governance, staking, and delegation capabilities, empowering the community to shape the protocol’s future.
Further Reading
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