How the 1inch Network allows users to save on gas
The next post in our series on the advantages of the 1inch Network is focused on how users can save on gas.
The 1inch Aggregation Protocol was specifically developed to help retail users exchange tokens at the best rates, including saving on gas fees.
Currently, the Ethereum network remains the most popular option for DeFi transactions. But, due to its substantial fees, swapping a small to medium-size amount of tokens can be quite expensive. This becomes even worse when high slippage rates on low liquidity pools are considered for high-volume traders.
Due to the 1inch Aggregation Protocol and the aggregation service Pathfinder, deals are split across multiple DEX pools, ensuring users will be able to find the best swap rates.
In addition, 1inch users can save on gas thanks to the Chi gas token and recent improvements in the 3rd version of the 1inch Aggregation Protocol.
The Chi gas token is an ERC20-standard token that is meant to be used in the 1inch dApp to pay transaction costs. The idea is similar to the gas token concept but it has some improvements.
Chi is pegged to the Ethereum network’s gas price. When the gas price is low, the Chi price is also low, and the opposite. Just like a gas token, Chi is tokenized gas on the Ethereum network. The only difference is that Chi is used on 1inch and Curve, while gas token is used across the entire Ethereum network.
Chi is minted when the gas price is low and burnt when it is high, enabling 1inch users to save up to 40% on gas fees. To learn more about Chi, see this post.
More gas saving opportunities arrived with the activation of the 1inch Aggregation Protocol v3 earlier this year.
Thanks to code optimization, reduced gas fees apply to swaps made using Uniswap V2 and its forks, such as SushiSwap, Lua Swap, etc. For example, an ETH -> USDC -> DAI swap using the 1inch Aggregation Protocol is 10% cheaper than the same swap using UniSwap and 3.5% cheaper than that using 0x.
We’ll be back soon with more on the 1inch Network’s advantages for users!