1INCH Token: Pioneering DeFi Governance and Utility

This blogpost explores how the 1INCH token drives community participation through decentralized governance and enhanced utility, enabling users to actively shape the future of the 1inch Network.

TL;DR:

• 1inch is the network | 1INCH is the governance and utility token
• 1INCH contract address: 0x111111111117dc0aa78b770fa6a738034120c302
• Maximum token supply is 1.5 billion and will be reached in December of 2024
• Directly participate in 1inch Network governance at gov.1inch.io

Decentralized Success

Launched in 2019, the 1inch Network has been at the forefront of decentralized finance, offering a suite of tools designed to optimize trading and improve user experience. By embracing Ethereum's core values, 1inch has always prioritized permissionless access, unbeatable security, and the integrity of immutability. These foundational aspects are pivotal in advancing a future where financial services are universally accessible, transparent, and free from control of centralized intermediaries. Throughout its journey, 1inch has not only envisioned but also actualized a series of remarkable achievements that highlight its substantial impact on the DeFi ecosystem:

• Significant Volume and Reach: 1inch has facilitated over $450 billion in cumulative transaction volume across a dozen networks, a testament to its robustness and the trust it has garnered within the community. 
• Extensive User Engagement: With over 80 million trades executed by more than 13 million unique addresses, 1inch has demonstrated exceptional scalability and user adoption.
• Multi-Blockchain Deployment: The deployment of 1inch across a dozen networks signifies 1inch’s commitment to users – ensuring they have access to the protocol irrespective of their preferred blockchain.
• Dominant Market Presence: 1inch's achievement of capturing and retaining over 60% of the DEX aggregator market share solidifies its position as a dominant player in the space. This impressive market share not only highlights 1inch's competitive edge but also its role as a key facilitator of liquidity and efficiency in the decentralized finance (DeFi) ecosystem.

These milestones collectively offer just a glimpse into the decentralized successes of 1inch. As the network forges ahead, its continued focus on innovation, user-centricity, and decentralization promises to further strengthen its position as a leading force in shaping the future of finance. 

The Dawn of Community Governance

On December 25th, 2020, 1inch introduced the 1INCH token, marking a significant leap towards true decentralized governance within the DeFi ecosystem. Born from a vision of empowering the community, the 1INCH token is designed to facilitate inclusive and efficient governance across the 1inch Network. Conceived with the aim of bolstering broader participation, the 1INCH token served to transform 1inch into a community-owned, and autonomously governed, suite of protocols.

Allocation Details

• Total Token Supply: 1.5 billion 1INCH tokens were minted at genesis, 94% of which were locked in vesting contracts. 
  • On April 6th, 2022 the 1inch Foundation burned the mint function of 1INCH with this transaction – there will never be more than 1.5 billion 1INCH tokens.
• Community Incentives (30%, 450 million 1INCH tokens)
  • Initiated with 150 million tokens in December 2020 and scheduled to increase by 37.5 million tokens bi-annually, maximizing community engagement and governance participation. 
• Network Growth Fund (14.5%, 217.5 million 1INCH tokens)
  • Starting with 46.9 million tokens in December 2020 and planned to incrementally grow, funding innovation and sustaining ecosystem development.
• Core Contributors and Team (22.5%, 337.5 million 1INCH tokens)
  • Contributions recognized from December 2021, with a strategy to distribute over 337.5 million tokens to core contributors, aligned with project milestones and longevity.
• Backers (33%, 500 million 1INCH tokens)
  • Broken down into small backers and major backers, highlighting the trust and early support from various stakeholders. 

1INCH Governance

With governance at its core, the 1INCH token empowers holders to actively participate in decision-making, influencing vital protocol parameters and guiding the network's trajectory.

Anyone may participate in the DAO’s discussions, however only users with 1inch governance tokens may vote on proposals. To ensure that all participants in the governance process commit their efforts to the success of the project, holders of 1INCH must first deposit it in the time-locked governance staking contract to receive Unicorn Power (UP). UP represents an individual’s influence within the 1inch DAO governance process and decays over time.

1INCH token holders have direct control over the following:

• 1inch Network Governance
• The outcome of proposals on the 1inch Snapshot space
• 1inch DAO Treasuries
• Fusion Mode Settlement Contract
• Fusion Mode Resolver Whitelist

Governance parameters (controlled by the DAO):

• Proposal submission threshold: 100,000 UP
• Proposal quorum: 10,000,000 UP
• 5-day voting period for standard proposals
• 2-day voting period for signaling proposals

It is advised for the community to seek legal counsel prior to implementing specific proposals, ensuring compliance and informed decision-making. This precaution underscores the network's commitment to responsible and lawful governance practices while not sacrificing decentralization.

Delegation

1inch embraces a nuanced approach to delegation, categorized into two prominent types: Snapshot delegation (governance) and delegation to Fusion Mode resolvers (utility). This allows users to channel their Unicorn Power (UP) diversely, catering to both utility and governance facets of the platform. Notably, the same UP can be concurrently delegated to Fusion Mode resolvers and delegates within the 1inch Snapshot space without conflict – they are independent of one another.

A pivotal feature of the Snapshot governance delegation system is the preservation of individual voting rights; ex. if both the Delegator and Delegatee vote on a specific proposal, the Delegator’s vote will override that of the Delegatee. This mechanism ensures Delegators have the autonomous flexibility to reclaim their voting influence at any time, emphasizing the personal agency within the governance framework.

1INCH offers additional utility in Fusion Mode, where UP delegation enables the decentralized selection of Resolvers. Resolvers with at least 5% of the total delegated UP are able to fill orders, which creates a merit-based competition to attract UP. To further this goal, each independent Resolver may offer and administer their own rewards programs to incentivize UP delegation.

Contracts

• 1INCH Token:  0x111111111117dc0aa78b770fa6a738034120c302
• v1INCH: 0x03d1b1a56708fa298198dd5e23651a29b76a16d2
• st1INCH: 0x9A0C8Ff858d273f57072D714bca7411D717501D7

Moving Forward

Our journey ahead is centered on deepening decentralization and amplifying community involvement. We invite every member of our community to actively engage in shaping the future of the 1inch Network by participating in discussions and directly engaging in DAO governance on the governance forum. Your insights, votes, and proposals are essential in steering the network towards new horizons of innovation and utility. Together, let's continue to expand the boundaries of what's possible in DeFi, ensuring the 1inch Network remains by the community, for the community.