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Tutorial: How to Swap Tokens on 1inch

zachdavidson.eth
zachdavidson.eth
0xE8B0
August 26th, 2021

1inch is a DEX aggregator with over $70B in total volume across 540k+ users. To give users the best token exchange rates, 1inch searches across various liquidity sources & swaps your tokens on the exchange with the cheapest rate.

They support 50+ liquidity sources on the Ethereum network, 20+ on Binance Smart Chain, and 7+ on Polygon, and their Pathfinder algorithm optimizes for the most cost efficient token swap path if necessary to minimize fees.

Why does this matter?

As people become more crypto native, they'll initiate more on-chain transactions, which will, in turn, result in more fees paid to the network. In the long run, these fees add up, so any effort to minimize them is a good practice. In addition, since cryptocurrencies are volatile assets, using DEX aggregators like 1inch can help minimize slippage too.

There are 4 main parts to 1inch:

  • The Aggregation Protocol — aggregates on-chain price data from DEXs and helps you pick the best DEX on which you should swap your tokens.
  • The Liquidity Protocol — an AMM that prevents front-running attacks and provides yield to liquidity providers.
  • The Limit Order Protocol — allows you to initiate limit orders in DeFi.
  • The DAO & its governance token — a decentralized autonomous organization that governs the broader 1inch network. Using the 1inch token, holders can vote on 1inch governance proposals.

For the sake of this guide, we'll focus on the aggregation protocol & walk through how to swap tokens on 1inch.

How to Swap Tokens using 1inch

Step 1: Navigate to the 1inch dApp and connect your crypto wallet.

Click "Connect Wallet" & Sign in with your Metamask
Click "Connect Wallet" & Sign in with your Metamask

Step 2: Select the token you want to swap in the "From" drop-down menu & input the amount of that token you want to exchange.

Step 3: Select the token you want to receive in the "To" drop-down menu.

You should immediately see the amount of tokens to be received (minus slippage) show up in the "To" area. You should also see multiple options for the exchanges you can use to swap your tokens. Since 1inch is a DEX aggregator, you can choose whichever exchange gives you the best rate directly from their interface, similar to how you may use Kayak for booking travel.

Step 4: Swap your tokens.

If this is your first time using 1inch, you'll have to "Give permission to swap," which will trigger an "approval transaction." The approval transaction is not the swap transaction. You'll have to initiate a second transaction to actually swap your tokens, incurring gas fees both times.

Click the swap button to swap your tokens & confirm the transaction in your wallet.

Congratulations! You've officially swapped tokens using 1inch.


If you have any questions about this guide, feel free to reach out directly on Twitter @NotZachDavidson.

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