1inch, the team behind the 1inch.exchange decentralized exchange aggregator that optimizes trades by splitting them across multiple DEXes, is riding high after completing its inaugural funding round.
Announced on Tuesday, August 11th, the $2.8 million seed fundraise brought in investments from more than a few cryptoeconomy heavyweights. The round was notably led by Binance’s accelerator arm Binance Labs and also included investments from Dragonfly Capital, FTX, and Galaxy Digital.
The participation of Binance Labs is particularly interesting, insofar as the wider brand’s Binance Smart Chain (BSC) effort is a aspiring competitor to Ethereum and the Ethereum-centric DeFi ecosystem, of which 1inch has become a quick star. But it’s precisely this rapid and useful rise to stardom that has Binance betting its chips accordingly. On the news, Binance CEO Changpeng Zhao said:
“DEX aggregation is a critical building block that co-enabled the most recent DeFi boom. It allows executing large order sizes at low slippage rates. 1inch has become the de facto interface for trade execution in DeFi … It is of great pleasure to support the 1inch team in their relentless quest to drive user adoption in DeFi.”
Rise of the DEXes
The fact that 1inch just locked down its first funding comes as no surprise, considering the aggregator’s explosive performance amid the ongoing 2020 DEX boom.
Indeed, 1inch.exchange just turned one year old and passed the $500 million milestone mark back in June. Yet fast forward a little over a month later to now, and the aggregator has already jumped to ~$1.5 billion in all-time volume as new trades have flowed in fast around the blooming of yield farming campaigns in DeFi.
And the good news for 1inch and its rising DEX colleagues is that these exchanges are only just beginning to have breakout success and come into their own. For example, a new monthly DEX volume record was set last month as these exchanges collectively powered over $4.3 billion worth of transactions in July 2020.
That’s why big investors like Binance Labs and Galaxy Digital are paying attention. To that end, the 1inch raise notably comes right on the heels of Uniswap’s creators announcing the completion of an $11 million Series A fundraise.
1inch Unveils Mooniswap
With the DEX sector still being so young, there’s still plenty of room for innovation and evolution. That’s why the 1inch team turned heads this week when they introduced Mooniswap, a new automated market maker (AMM) DEX that focuses on bringing value to liquidity providers by redistributing earnings to liquidity pools.
How? As the 1inch team has explained:
“The new AMM is capable of keeping most of the slippage revenue in the pool by maintaining virtual balances for different swap directions … The AMM improves exchange rates for arbitrage traders slowly, over approximately a 5-minute time period. As a result, they will be able to collect only a portion of slippage, while the rest will remain in the pool shared among liquidity providers. This we believe is a game changer.”
The end result, then? A DEX that’s poised to be capable of bringing liquidity providers up to 200% more income than the Uniswap V2 system.
If that potential does end up panning out, it absolutely will be a game changer. LP revenues are one of the most promising cryptonative earning opportunities to rise to the forefront of the cryptoeconomy this year, and Mooniswap could become a major LP hub accordingly if it turns out the exchange has the best revenues to offer.
In the meantime, 1inch’s growing infrastructure, like Mooniswap and the Chi Gastoken, are already some of DeFi’s most interesting wrinkles right now. As such, it’ll be exciting to see how far the 1inch team can take these projects in the years ahead.