1inch is a new cryptocurrency exchange launched in April 2018. The exchange has attracted attention for its low trading fees and high liquidity. Uniswap, on the other hand, has been around since 2016 and offers lower fees but slower trade execution times. Which one should you use?
Uniswap is a decentralized exchange that offers low fees and liquidity. 1inch is an on-chain decentralized exchange with no fees and also allows for instant trading.
1inch is a liquidity protocol as well as a DEX aggregator (AMM). Mooniswap has been renamed 1inch Liquidity Protocol after the introduction of the 1INCH coin.
Now, the site serves as both a DEX aggregator and an exchange, with a new AMM model that prioritizes LP profit.
Uniswap, on the other hand, is a simple-to-use decentralized exchange that is widely used. It is the finest decentralized exchange in the industry in terms of TVL and volume.
Because they are both AMM protocols, you may use Uniswap and 1inch to trade ERC20 tokens and earn money by providing liquidity to pools.
Which one, though, should you choose? 1inch or Uniswap? As a trader or liquidity provider, you may discover which exchange is best for you in this article.
Should you trade on 1inch or Uniswap while trading?
Don’t utilize 1inch if you’re intending to make a fast, tiny transaction with just one liquidity source. In such scenario, Uniswap may help you save money on transaction costs.
For example, the transaction cost for swapping 1 ETH to AAVE and setting a custom gas value of 226 on both 1inch and Uniswap is as follows:
Don’t worry about the gas costs; they’re so expensive that you shouldn’t even trade on decentralized exchanges. You may utilize centralized exchanges like Binance, which has the lowest fee cost in the industry (0.06 percent ).
As a result, if you trade on 1inch rather than Uniswap, you are more likely to incur greater transaction costs.
If you intend to use 1inch often and make a lot of transactions, you may activate and utilize Chi Gastoken, which will save you up to 42% on transaction fees.
The least quantity of AAVE I’ll get for this deal is greater on 1inch, as you can see in the picture above.
Because 1inch compares prices from over 40 liquidity sources to get the greatest deal. Balancer is used instead of Uniswap or any other liquidity source for this order.
However, since numerous liquidity sources are not required for this transaction, it does not divide the order among them. So, what’s the big deal about 1 inch?
Simply use 1inch to locate the best-priced decentralized exchange and trade there. You may save money on transaction fees this way.
Even while other exchanges, such as Balancer, may offer lower rates than Uniswap, you should check gas fees as well.
If the price difference between Uniswap and other decentralized exchanges is not significant, you should trade on Uniswap instead since it is more likely to have cheaper transaction costs.
However, if more than one liquidity source is utilized and there is a significant pricing differential between 1inch and other exchanges such as Uniswap, 1inch is doing its job.
In that scenario, instead than utilizing Uniswap or another decentralized exchange, you may perform the swap on 1inch.
Also, don’t believe everything you see on the screen; you may lose money and 1inch could profit from your transaction via positive slippage.
The rates on 1inch are sometimes overstated. Most traders would be better off sticking to Uniswap, particularly if they have no clue what they’re doing.
The most important takeaways
- Use Uniswap instead of DEX aggregators like 1inch for minor transactions.
- 1inch will help you discover the decentralized exchange that will give you the greatest deal on your purchase.
- When more than one liquidity source is utilized and there is a significant pricing differential between 1inch and Uniswap, trade on 1inch.
Should you add liquidity to 1inch or Uniswap to provide liquidity?
You may earn fees by providing liquidity to both 1inch and Uniswap. However, there are many factors to consider when choosing which exchange to provide liquidity to.
On both Uniswap and 1inch, you should first verify the liquidity and volume of the pool to which you wish to contribute liquidity.
If one pool’s volume/liquidity ratio is comparable to another, providing liquidity to that pool will allow you to earn more fees for your liquidity.
Uniswap imposes a 0.3 percent trading fee on all transactions, which it splits evenly among liquidity providers. It’s a lot more complicated on 1inch.
As seen in the example below, each liquidity pool is regulated independently and charges various fees on 1inch exchange.
1inch also charges a price impact fee and has a decay time feature that boosts liquidity providers’ revenues.
As a liquidity provider, you may earn more money on 1inch than Uniswap due to the price impact charge and the decay time, but it also depends on the pool.
However, comparing various pools and determining whether Uniswap or 1inch is preferable for liquidity providers is not simple.
Trading volume, fee rate, temporary loss, and other variables are all involved, the majority of which are changeable.
Liquidity mining programs are another significant factor, maybe the most essential. Users may acquire protocol tokens, UNI and 1INCH, by staking their LP tokens at specific times on both Uniswap and 1inch.
You should participate in any ongoing liquidity mining programs on 1inch or Uniswap since you may earn protocol tokens in addition to trading fees.
The most important takeaways
- On both Uniswap and 1inch, look at the volume/liquidity ratio of the pool you wish to add liquidity to.
- Check to see whether a liquidity mining program is currently running, allowing users to earn 1INCH or UNI.
- Other variables to consider are exchange fees, temporary losses, and so on.
Which is better, the UNI or the 1INCH?
By TVL and volume, Uniswap is presently the most popular decentralized exchange. The overall liquidity of the 1inch exchange is now over a billion dollars.
Uniswap’s cryptocurrency, UNI, is presently ranked in the top 20 on Binance, Coinbase Pro, and Kraken, among other prominent exchanges.
1INCH is exclusively traded on Binance and OKEx, and it has a significantly smaller market cap than the UNI token.
Both 1INCH and UNI may be excellent options if decentralized exchanges and the broader DeFi sector grow in popularity.
Binance is the best place to trade UNI and 1INCH since it has the lowest charge rate (0.06 percent) and a 20 percent Plus 25% fee discount.
If you don’t already have a Binance account, follow this link or read our instructions to get a 20% fee reduction on your first Binance account.
You may refer to the reviews / tutorials below to learn how to utilize Uniswap and 1inch:
Check read the reviews below for other decentralized exchanges:
The 1inch gas fees is a question that has been asked by many people. There are two types of tokens, 1inch and Uniswap. Both have their pros and cons.
Frequently Asked Questions
Should I use 1inch or Uniswap?
Uniswap is a better option for Beat Saber.
Does Uniswap take a fee?
Uniswap is a free exchange service.
How do I avoid fees at Uniswap?
Uniswap does not charge any fees for deposits or withdrawals.
Related Tags
- uniswap vs sushiswap vs 1 inch
- 1inch exchange
- 1 inch competitors
- uniswap fees
- uniswap v2