A common question asked is, "Why should I use 1inch instead of a regular DEX Uniswap or Pancakeswap?"
At first glance, the interface of 1inch Network looks very similar to alot of Decentralized Exchanges (DEXes) in DeFi; however, under the hood there are some powerful features to help users save money on swaps.
By design, 1inch uses a dynamic "aggregation" protocol. This is completely different from the AMM protocols of individual DEXes. Instead of executing transactions, it finds the cheapest rate amongst a multitude of Dexes (including Uniswap and Pancakeswap), and submits the transaction through that DEX. This means that if Sushiswap has a cheaper rate than Uniswap, 1inch will do the work for you and route your swap through Sushiswap.
As you can see in this image above, the 1inch router will always give a better rate, which puts more money in its users' wallets. This difference only becomes more apparent as the trade size increases.
Transaction splitting is also another key component to how 1inch saves money for its users. If you were to make a swap on an individual DEX (like Uniswap), your trade could only go through one single liquidity pool. Therefore, as your trade size increases, a larger negative price impact would be incurred, causing unnecessary losses.
With 1inch; however, your single trade can be split up and routed through multiple liquidity sources! This minimizes the negative price impact, and saves significant amounts of capital. (see the highlighted price impact %'s in the image above)
In this image, you can see each individual liquidity source that 1inch routes a UNI-1INCH trade through. Also worth noting, are connector tokens. These are highly liquid tokens that the 1inch router will use as part of the swap creating additional savings for the user.
In addition to efficient routing and transaction splitting, 1inch also works to optimize gas fees. 1inch Network contributors are continually updating the protocol to enhance gas optimization, resulting in cheaper gas fees than most of the leading DEXes.
In this image, you can see that a simple 10 ETH -> DAI swap through 1inch is 33% cheaper than Uniswap... in gas fees alone!
Due to the protocol's efficiency, gas fees for smaller transactions are often cheaper than Uniswap, even if 1inch routes the transaction through Uniswap itself.
Gas refund program
Last but not least is the 1inch Network gas refund program. With this campaign, any user who stakes 1INCH tokens will receive a refund for a portion of their gas fees. The more tokens staked, the higher the refunded percentage will be.
Here are the amounts and percentages (for reference):
100 1INCH = 25% refund
1000 1INCH = 50% refund
10000 1INCH = 75% refund
100000 1INCH = 100% refund
***Limit of $10,000 USD in total refunds per person
With all of these unique qualities combined, anyone who uses 1inch will save substantial amounts of capital in comparison to using individual dexes like Uniswap or Pancakeswap.