Decentralized exchange aggregator 1inch Exchange has officially unveiled its long-anticipated native token, 1INCH, alongside a new liquidity mining program. While the launch marks a pivotal moment for the DeFi platform, the initial token distribution plan has sparked widespread criticism from the crypto community—particularly due to the mere 2% allocation designated for early liquidity providers.
1inch and Mooniswap: Powering DeFi Aggregation
1inch operates as a decentralized exchange (DEX) aggregator, pulling liquidity from major protocols like Uniswap, Kyber, Curve, Balancer, and Oasis. When users place trades, the protocol splits orders across platforms to secure optimal pricing with minimal gas fees—a key advantage in Ethereum’s high-cost environment.
According to data from Dune Analytics, 1inch has facilitated over $1.7 billion in total trading volume to date. The platform recently expanded its infrastructure with the launch of Mooniswap, its own automated market maker (AMM), which aims to reduce impermanent loss and improve capital efficiency for liquidity providers.
The 1INCH Token: Purpose and Distribution
The newly introduced 1INCH token is not required to use 1inch Exchange or Mooniswap. Instead, it serves as a governance and incentive mechanism within the ecosystem. However, the token's initial distribution has raised eyebrows across social channels and forums.
Here’s the official breakdown of the 1INCH token allocation:
- 30% – Network security and platform maintenance (4-year vesting)
- 22.5% – Core team and future employees (4-year vesting)
- 21% – Ecosystem development (4-year vesting)
- 19.5% – Investors and shareholders (2.5-year vesting)
- 5% – Advisors (4-year vesting)
- 2% – Early Mooniswap liquidity providers (1-year vesting)
Notably, only 16% of the total supply will be in initial circulation. While the vesting schedules aim to ensure long-term sustainability, the disproportionate allocation favoring investors over community participants has fueled controversy.
Why the Backlash?
The crypto community values decentralization and fair distribution. With 19.5% of tokens going to investors and just 2% allocated to liquidity providers, many users feel this contradicts the ethos of DeFi. Early supporters—who took on risk by providing liquidity during Mooniswap’s launch—are receiving minimal rewards compared to private investors.
Social media reactions ranged from disbelief to outrage:
“2%? Seriously? This isn’t decentralization—it’s a handout to insiders.”
“I didn’t misread that… only 2% for liquidity mining? That’s barely a participation trophy.”
While some acknowledge that 2% could still be meaningful depending on total supply, the lack of transparency around the maximum token supply remains a major concern.
How to Participate in 1inch Liquidity Mining
Users can earn 1INCH tokens by supplying liquidity to designated pools on Mooniswap. The program is retroactive, meaning rewards have been accruing since Mooniswap’s launch on August 11, even before the token was announced.
Eligible liquidity pools include:
- ETH-USDC, ETH-DAI, ETH-LINK, ETH-SRM
- ETH-USDT, ETH-WBTC, ETH-AMPL
- ETH-renBTC, ETH-sBTC, ETH-LEND
- ETH-SNX, ETH-sUSD, ETH-YFI
- ETH-CRV, ETH-GNO, ETH-MTA
- ETH-REN, ETH-MKR, ETH-KNC
- ETH-sETH, ETH-yCurve, ETH-AKRO
- ETH-wNXM
- USDT-USDC, USDC-wNXM
- DAI-USDC, DAI-USDT, DAI-sUSD
- DAI-yCurve
- ETH-BZRX
- AKRO-USDC
To participate:
- Visit mooniswap.exchange
- Connect your Web3 wallet (e.g., MetaMask)
- Add liquidity to any eligible pool
- Begin earning 1INCH rewards automatically
FAQs: Addressing Community Concerns
Q: Why is only 2% of 1INCH tokens allocated to liquidity mining?
A: According to 1inch, this initial allocation is designed with security in mind. The team plans to introduce additional distribution mechanisms in the future, including broader community incentives and governance participation.
Q: Is the 2% reward pool fixed or expandable?
A: The current 2% is part of a temporary plan aligned with current DeFi trends. The team has indicated that future token distributions may evolve based on community feedback and ecosystem needs.
Q: When will the total token supply be revealed?
A: As of now, 1inch has not disclosed the maximum supply of 1INCH tokens. This lack of clarity has contributed to skepticism among users and analysts.
Q: Can I still earn rewards if I provided liquidity before the token announcement?
A: Yes. The liquidity mining program is retroactive to August 11, so all eligible deposits made since then qualify for rewards.
Q: What is the vesting period for liquidity mining rewards?
A: Tokens earned through liquidity provision will be unlocked over a 1-year period, encouraging long-term participation.
Q: How does Mooniswap differ from other AMMs like Uniswap?
A: Mooniswap uses a delayed execution model that reduces arbitrage opportunities and minimizes impermanent loss for liquidity providers—making it more capital-efficient than traditional constant product models.
What’s Next for 1inch?
Despite the initial backlash, 1inch remains one of the most widely used DeFi aggregators. The introduction of the 1INCH token lays the foundation for decentralized governance, allowing token holders to vote on protocol upgrades, fee structures, and future incentive programs.
The team has emphasized that this is just the beginning. Future phases may include:
- Community-driven treasury management
- Expanded staking and yield opportunities
- Cross-chain expansion beyond Ethereum
- Integration with Layer 2 solutions to reduce transaction costs
As DeFi continues to mature, user trust hinges on transparency and equitable distribution. How 1inch responds to community feedback in the coming months will be critical to its long-term success.
Final Thoughts
The launch of the 1INCH token marks a significant milestone for the 1inch network. However, balancing investor interests with community incentives remains a delicate challenge. While the current allocation favors early backers and internal stakeholders, ongoing engagement and transparent roadmap updates could help rebuild trust.
For users, participating in Mooniswap’s liquidity mining offers a rare chance to earn tokens retroactively. But as with all DeFi activities, it’s essential to understand the risks—including smart contract vulnerabilities, impermanent loss, and market volatility.
As the DeFi space evolves, protocols like 1inch will need to prove that decentralization isn’t just a buzzword—but a core principle guiding every decision.
Core Keywords: 1inch token, liquidity mining, Mooniswap, DeFi aggregation, token distribution, decentralized exchange, AMM, yield farming