The History of 1inch Network

The 1inch Network, known for its efficient decentralized exchange (DEX) aggregator, has its roots in the 2019 ETHGlobal hackathon. Sergej Kunz and Anton Bukov, the founders of 1inch, launched it in an effort to solve the inefficiencies prevalent in decentralized exchanges. Their hackathon project quickly evolved into a robust platform known today for offering competitive rates across multiple liquidity providers.

Initially, 1inch began as a simple DEX interface that allowed users to compare swapping rates. However, it soon grew into a full-fledged ecosystem offering users decentralized trading solutions that aggregate liquidity from various sources. The main goal was to obtain the best possible swapped rate for users by splitting orders among multiple exchanges.

1inch's major milestone came with the introduction of its governance token, 1INCH. This token marked the platform's transition to a decentralized autonomous organization (DAO), enabling token holders to participate in protocol governance. This DAO structure ensures that the platform adapts to the community's evolving needs, a trait shared by other decentralized networks including Kyber Network. [Explore how Kyber Network navigates its governance at BestDapps](https://bestdapps.com/blogs/news/kyber-network-a-defi-titan-faces-its-rivals).

The 1inch protocol saw rapid adoption due to its innovative pathfinder algorithm, which significantly improves the rate by connecting different protocols like Ethereum, Binance Smart Chain, and others. This approach ensures users are provided with optimal rates, crucial for assets trading. As 1inch expanded, it integrated additional services such as liquidity pools, expanding its support to include gas tokens and farming incentives.

This approach contrasted sharply with some of its contemporaries that focused primarily on establishing separate DEXs rather than aggregating existing liquidity sources. This distinction allowed 1inch to carve out a niche in the crowded DeFi space, offering a unique value proposition.

As with any groundbreaking technology, 1inch faced critiques. Issues were raised about its initial centralized governance structure, a common concern for emerging DAOs. However, its transition to a DAO and the widespread distribution of 1INCH tokens have helped to address many of these worries. You can see similar critiques [in the discussions around 0x Protocol](https://bestdapps.com/blogs/news/examining-the-criticisms-of-0x-and-zrx-token).

Looking back, 1inch's growth trajectory is remarkable, transitioning from a hackathon project to a pioneering DeFi platform. As the DeFi ecosystem matures, 1inch's role as an aggregator and innovator continues to evolve, contributing significantly to the infrastructure of decentralized finance.