21 April 2021 | ZebPay Trade-Desk
1inch was launched in 2019 with a goal of helping users find the best prices on assets across decentralized exchanges. Within 2 years, it became one of the widely used decentralized exchanges with over $290 million locked in their liquidity pool. Today, the 1inch network is a collection of decentralized protocols with a DeFi aggregator and an Automated Market Making protocol or AMM. 1inch went live on ZebPay’s platform last week, and you can read more about its launch here.
1inch Snapshot (at the time of writing):
| Market Capitalization | $771,897,331 |
| Current Price | $4.93 |
| 24 HR Volume | $170,610,882 |
| All Time High/Low | $6.72 / $0.76 |
| Script in Circulation | 156,671,623 1inch |
| Total Supply | 1,500,000,000 1inch |
1inch came into existence in August 2020 after it raised $2.8 million in funding from the likes of Binance Labs, Galaxy Digital, Greenfield One, Libertus Capital, Dragonfly Capital, FTX, IOSG, LAUNCHub Ventures, and Divergence Ventures. Soon in December 2020, 1inch raised another $12 million through a Series A funding round, pioneered by Pantera Capital, in partnership with ParaFi Capital, Blockchain Capital, Nima Capital, and Spartan Group. The funding round is administered through a SAFT sale (simple agreement for future tokens). Last year, 1inch also launched Mooniswap, which is its native automated market maker (AMM).
In December last year, 1inch introduced its 1inch governance token, and the 1inch Network was to be governed by a decentralized autonomous organization (DAO). This asset is unique as it provides instant governance for its users. It allows 1inch users to vote for specific protocol settings, which engages the users, but also gives users a say in the development of the asset, using the decentralized autonomous organization (DAO) model. An issue that this protocol was able to swiftly solve was the high gas fees that are incurred on the network during spikes in demand.
1inch introduced Chi Gastokens, in an attempt to bypass this issue. Chi Gastokens are backed by the Ethereum gas fee price and make use of Ethereum’s storage refund to provide lower fees for 1inch users. Hence, 1inch brings with it the ability to securely transact efficiently and more cheaply, backed by strong governance protocols, and a permissionless interactive mechanism between its users and developers to ensure full transparency and trust in the protocol.
Investment Analysis:
On its release date, Dec. 25, 2020, the circulating supply was ~6 percent of the total issuance and around 1 percent for the first week of the liquidity mining program. Today, the total supply of 1inch is 1.5 billion tokens, 30% is allocated to community incentives, and will be rolled out over the next 4 years or so, with the aim to create an incentive for community members to participate in the protocol’s governance. In these 4 years, ~14.5% of the total supply will form the protocol growth and development fund, which will be used to issue grants, attract developers and repay any users due to unforeseen circumstances.
In the table below, we will be looking at how the price of the asset has developed MoM since its launch in December 2020, and also look at its MoM volume growth.
| 1inch | Dec 20 | Jan 21 | Feb 21 | Mar 21 | Apr 21 |
| Avg. Price ($) | 1.35 | 1.9 | 4.86 | 4.19 | 5.42 |
| ROI (from ICO) (%) | – | 40.74% | 260.00% | 210.37% | 301.48% |
| Avg. Daily Volume ($, mn) | 239 | 192 | 334 | 127 | 228 |
| Daily Vol. Growth (%) | – | -19.67% | 73.96% | -61.98% | 79.53% |
As seen in the table the asset, in terms of price, has grown almost 5x, to an average of $5.4, in April, in just a few months of its launch. This is reflected in its ROI figure, showing more than a 300% appreciation in just 5 months, showcasing the asset’s true potential. On the volume front, things seem to be pretty stable, though February 2021 saw a major spike, This can be attributed to the rally that was seen between February and March 2021, which spiked larger investor interest in the asset. Post this, the asset has started to show signs of some maturity, despite being rather nascent and new. Prices haven’t shown a great deal of volatility, and volumes have also held up, especially in the month of April 2021.
From a technical point of view, as we can see from an hourly chart above, post making the all-time high of $6.663, 1inch has corrected almost 33% making the low of $4.429. The asset has made a bullish harami pattern at this level and has started moving upwards. At current levels, $5.5 will act as a crucial resistance, once it trades and sustains above this level we may see further upside on the asset.
1inch is an interesting offering, and it specializes in being different in the sense that it’s permissionless and has a good governance mechanism. The fundamentals of the asset are strong, and it has shown good growth since launch, and we expect this to continue. With that in mind, though 1inch is still a fairly new token, it has proved its merit and benefited immensely from the growing interest among the crypto community. We believe that 1inch is likely to become a key player in the marketplace over the next few years.
References:
Disclaimer : This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice
