1inch is a decentralized exchange aggregator that allows users to swap cryptocurrencies across multiple decentralized exchanges (DEXs) with the best available prices. Like any other exchange, 1inch charges fees for trades made on its platform.
1inch supports multiple layers and protocols, including Ethereum, Binance Smart Chain, Polygon, and more. Each of these layers has its own unique fee structure for swaps.
The fees on 1inch depend on several factors, including the size of the trade, the liquidity of the asset, and the complexity of the transaction. Generally, the fee ranges from 0.05% to 1%, with an average of 0.3%.
On Ethereum, the 1inch exchange charges a 0.3% fee for every trade. This fee is split between the liquidity providers who supplied the tokens for the trade and the 1inch network itself. However, 1inch also offers users the option to enable the “Chi Gastoken” feature, which can reduce gas costs and ultimately lower fees. This feature utilizes a gas token that users can purchase at a lower gas price and then redeem later when gas prices are higher.
On Binance Smart Chain, the swap fees on 1inch are lower compared to Ethereum, at 0.2%. This fee is also split between the liquidity providers and the 1inch network.
On Polygon, the swap fees on 1inch are even lower, at 0.05%. Again, this fee is split between the liquidity providers and the 1inch network.
It’s important to note that while the fees on 1inch are generally competitive, they may vary depending on market conditions and the specific tokens being traded. Additionally, fees may also vary depending on the liquidity of the particular token pair being traded.
Users should also be aware of the gas fees associated with each layer. Ethereum, for example, is known for its high gas fees during periods of high network congestion. This can lead to increased costs for users, especially for smaller trades. Binance Smart Chain and Polygon, on the other hand, generally have lower gas fees, making them more cost-effective for smaller trades.
It’s worth noting that 1inch charges a network fee on top of the trading fee, which is paid to the Ethereum network to process the transaction. This fee varies based on the level of network congestion and can sometimes be high during times of heavy activity.
Additionally, 1inch uses the Ethereum-based ERC-20 token 1INCH as a utility token. Users who hold 1INCH can receive discounts on trading fees, as well as other benefits such as access to governance and decision-making in the 1inch network.
Overall, while the fees on 1inch may vary depending on the trade, they are generally competitive with other decentralized exchanges. As with any exchange, it’s important to consider the fees when making trades to ensure that the costs don’t outweigh the potential gains.
In summary, 1inch exchange fees vary depending on the layer and protocol being used. While the fees are generally competitive, users should also consider gas fees and the liquidity of the token pair being traded when assessing the overall cost of using the platform.