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1inch - Issue #64
In this newsletter, we are profiling 1inch [1INCH]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
1inch raised $2.8 million in August 2020, $12 million in December 2020 and the last funding round from institutional investors of $175 million in December 2021. 1inch has no lack of institutional investors invested in them. “The next $1 trillion of assets entering DeFi will come from institutions rather than retail users, and 1inch would like to facilitate entry for them,” says Sergej Kunz, co-founder of 1inch.
The 1inch network was founded in 2019 by two Russian smart contract developers, Serjez Kunz and Anton Bukov. Its ERC20 token, 1INCH, was launched the following year. 1inch is a decentralized finance (DeFi) project with the main focus of DEX aggregation. In other words, it searches through big lists of decentralized exchanges looking for the most profitable platforms for liquidity providers.
The 1INCH token serves as a governance vehicle for the 1inch DAO. Holders can stake their tokens in order to vote for system parameters such as swap fees, liquidity pool decay times, as well as others. It is also used as a utility token when swapping through multiple exchanges to achieve high-efficiency routing. There is a maximum supply total of 1.5 billion tokens, with it being wholly unlocked and circulating by the end of 2024. You can read more about their unlocking schedule on their blog.
1INCH is also available on other blockchain networks such as Binance Smart Chain, Solana, and Avalanche, all accessible via various bridges. The smart contracts in the DAO have been audited by at least nine trusted organizations to ensure safety. This has allowed quite a few vulnerabilities to be found and addressed before they could be exploited.
The aggregation protocol performs runtime verification of transaction executions and uses something called the Pathfinder routing algorithm to find the best liquidity and trading deals. It finds the most efficient paths for swapping between different blockchains in the shortest time possible. The network also features a liquidity protocol that acts as an automated market maker (AMM) that facilitates decentralized token swaps without needing an order book.
The 1inch wallet smartphone app contains built-in access to their DEX aggregator. It supports various coins and ERC20 tokens. The system is non-custodial, and all trades take place within one transaction from the user’s wallet on any of the supported blockchains and layer-2 networks.
There are currently a lot of other networks vying for similar functionality in the DeFi space, but 1inch does have the advantage of operation across multiple blockchains while being highly secure. Can it inch its way to the top of the stack to come out as the DeFi leader?
On this first chart, 1INCH is paired to BTC on the daily scale going back to the end of 2020. As you can see, 1INCH has been on a bear trend against BTC for most of its trading life. Though the top trend line is not great since it has broken through it many times, the bottom is solid and continues to have lower lows. In October 2021, you can see one of those breakouts that had a gain of 183% from bottom to top over a two-week period. The current low is 4226 Satoshi which was hit a couple of times over the last few days. From the bottom to the top of the trendline is a gain of 68%, and currently, it is skimming the bottom.
Expecting 1INCH/ BTC to go say hello to macro resistance. Doing something similar to what the 1INCH/USDT pair did. Target 5000 sats or there abouts.
— by TradingView user george_searchingforanumber
On this following chart, 1INCH is paired against USD. It is currently on a fairly steep downward slope. Currently, it is in the bottom half of the trendline. It is currently trading at about $1.88 as of this writing. The bottom of the trendline is at $1.25, the middle that it has been using as resistance since December 2021 is at $2.00, and the top is at $2.76. If BTC continues to head up, keep an eye on 1INCH changing its trending pattern upwards with the rest of crypto assets.
The Other Trend Lines
Ark Investments released their annual report called Big Ideas 2022. It covers several areas that might be of interest to our readers, such as Public Blockchain, Bitcoin, Ethereum and Defi. It is a free download and spans 132 pages.
This first image shows the potential of Bitcoin to reach $1.36 million by 2030 with a market cap of $28.5 trillion. The Bitcoin use cases would be 50% of remittances, 10% emerging market currency, 25% economic settlement, 1% nation-state treasury, 5% seizure-resistance asset, 2.55% institutional investment, 5% corporate treasury, and 50% digital gold.
Ethereum is the leading smart contract blockchain that has Defi, stablecoins and NFTs on it. Ark Investments are predicting that Ethereum has the potential to capture a portion of the Global M2, increasing the value of ETH by 56x by 2030.
If ARK is right about the increase of BTC and ETH going into 2030, you should definitely have them as part of your investment portfolio.
Here’s how Ethereum has progressed since January 2018, from the ICO boom to NFTs in 2021.
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 296% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $36,250 and $43,000 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 83% since the start. The USD fund value is up 367% since the beginning. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -30% against BTC. ETH is up 161% against BTC since the start. ADA has a gain of 347% against BTC and 1032% to USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT has gained 117% against BTC since the start; LINK is down -23%, WAVES is up 29%, XMR is down -2%. Overall, against BTC, the fund is up 30% and 1% against USD.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
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Madbyte does have its own token called MADX on the Ethereum network and Madbyte on the Waves network. The two tokens are interchangeable on Madcapx.com.
Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.