$1INCH #

As the native token of the decentralized trading aggregator 1inch Network, 1INCH has recently experienced a prolonged period of low prices, attracting widespread market attention. As of April 2025, the price of 1INCH struggles around $0.37, down over 95% from its historical peak of $7.87, and its market cap has shrunk to about $520 million. This analysis report will comprehensively analyze the multiple reasons for the continuous decline in 1INCH's price, assess its fundamentals and technical condition, and provide investors with objective value judgments and investment strategy recommendations based on the current market environment and project development prospects. We will explore various dimensions including market sentiment, competitive landscape, token economic model, on-chain data, etc., to help investors understand whether 1INCH holds investment value and under what conditions a turnaround may occur.

## Overview and Market Status of the 1INCH Project

1inch Network is a **decentralized trading aggregation protocol** that uses algorithms to find the optimal price path across multiple decentralized exchanges (DEXs), providing users with a low-slippage trading experience. The project was launched in 2020 and quickly became one of the important infrastructures in the DeFi field, with its core value proposition being to reduce users' trading costs by aggregating liquidity. The 1INCH token, as the governance token of the network, allows holders to participate in voting on protocol parameters, such as fee distribution and liquidity pool rewards.

From market data, the current price of 1INCH is approximately **$0.37**, with a market cap of $520 million, ranking outside the top 50 cryptocurrencies. The circulating supply is around 1.25 billion tokens, with a maximum supply of 1.5 billion tokens. This price level is close to the historical low of $0.22, down over 95% from the historical high of $7.87 set during the 2021 bull market, performing far worse than most mainstream DeFi tokens during the same period.

**On-Chain Trading Volume**: Despite 1inch Network processing $155 billion in swap volume and completing 53 million trades in 2024, with user growth to 10 million, this growth in usage has not translated into support for the token price. Instead, the price of 1INCH continues to decline, reflecting the **disconnection between token utility and network usage**.

From a technical analysis perspective, 1INCH is currently in a clear **downward channel**. On the daily chart, the token price has fallen below all key moving averages (including the 50-day and 200-day moving averages), and the 14-day Relative Strength Index (RSI) hovers around 45, indicating that market sentiment remains bearish. The key resistance level is at $0.396, while the support level is at $0.3375; if it breaks down, it may further test $0.2622.

*Table: Overview of Key Market Data for 1INCH*

| **Indicator** | **Value** | **Market Implications** |

|----------|----------|--------------|

| Current Price | $0.37 | Near Historical Low |

| Market Cap | $520,085,203 | Mid-Cap Token |

| Circulating Supply | 1,254,111,772 1INCH | Inflation Pressure Exists |

| Historical High | $7.87 | Down over 95% from Peak |

| Historical Low | $0.22 | Limited Downside Risk |

| 24-Hour Trading Volume | $23,177,051 | Adequate Liquidity |

| Fear and Greed Index | 70 (Greed) | Overall Market Sentiment Diverges from Tokens |

The business model of 1inch Network essentially collects spreads through **transaction routing optimization**. Although the official claims that 'no explicit fees are charged,' in practice, when the transaction price is better than the user’s set price, 1inch retains this spread as revenue rather than returning it to users. This **Partial Refund Policy** has sparked community controversies and prompted some users to turn to more transparent trading aggregators like DeBank Swap.

## Analysis of Major Reasons for Continuous Price Decline

The long-term weakness of the 1INCH token price is not due to a single factor but the result of multiple negative factors combined. Deep understanding of these downward drivers is vital for assessing future trends.

**Team Trust Crisis and Governance Controversy** constituted the first significant blow to the price of 1INCH. As early as December 2020, the 1inch team was embroiled in a '**mouse warehouse airdrop**' scandal when the community discovered that the team address received an airdrop of 363,000 1INCH tokens. Although the official explanation was that it was 'an oversight in excluding that address from the airdrop list while testing governance features,' this incident severely damaged community trust. Even more frustrating for investors, the team also deducted fees from transaction revenues for server maintenance, despite the project having secured ample funding through two rounds of financing ($2.8 million and $12 million), leading the community to question the transparency of fund usage. These negative governance-related messages directly resulted in a 25% price drop of 1INCH on the day the news broke, initiating a long-term downtrend.

**Deficiencies in Token Economic Model** are the deep-rooted reasons restricting 1INCH's price. The primary function of the 1INCH token is **governance voting**, lacking a strong value capture mechanism. Unlike DEX tokens such as Uniswap, 1INCH does not directly share protocol revenue, and holders cannot earn transaction fee sharing. This design disconnects the token's value from actual protocol usage; even if 1inch Network processes $155 billion in trading volume, it cannot translate directly into token demand. Furthermore, the token release schedule brings ongoing **selling pressure**, with the current circulation reaching 83.6% of the maximum supply (1.25 billion out of 1.5 billion), and future inflation pressure is relatively limited, but the continuous unlocking over the past few years has undoubtedly suppressed price performance.

**Intensifying Market Competition and Weakening Differentiation** pose severe challenges for 1inch. The decentralized trading aggregator space has seen the emergence of several competitors such as ParaSwap, Matcha, and OpenOcean, offering similar services, with some platforms charging lower fees. Notably, some emerging aggregators like DeBank Swap adopt a fully transparent '**Partial Refund Policy**,' returning the optimal price differential to users rather than retaining it like 1inch. This more user-friendly business model is eroding 1inch's market share. Additionally, mainstream DEXs like Uniswap are continuously improving their routing algorithms, reducing reliance on aggregators.

*Table: Comparison of Business Models of 1INCH and Competitors*

| **Platform** | **Fee Model** | **Price Optimization** | **Token Utility** | **Transparency** |

|----------|---------------|--------------|--------------|------------|

| 1inch | Retains Positive Spread | Multi-DEX Routing | Governance Focused | Medium |

| DeBank Swap | Partial Refund | Full Chain Price Comparison | No Token | High |

| ParaSwap | Fixed Rate | Path Optimization | Governance + Fee Discount | Medium-High |

| Uniswap | Fixed 0.3% | Own Liquidity | Fee Sharing | High |

**Market Environment and Industry Trend Changes** also affect 1INCH's performance. The bear market from 2022 to 2023 led to a significant shrinkage in the overall DeFi TVL (Total Value Locked), and the decline in trading volume directly impacted aggregator revenue. More importantly, with the development of blockchain infrastructure, the demand for **cross-chain trading** has increased, but although 1inch supports multiple chains, its experience does not match that of competitors focused on cross-chain solutions. Additionally, regulatory uncertainty looms over the entire DeFi industry, especially as SEC actions against cryptocurrency staking services have sparked market panic, leading to a 11.6% drop in 1INCH in a single day.

**Technical Deficiencies** are also a limiting factor. 1inch's smart contracts are more complex than those of basic DEXs like Uniswap, leading to **higher Gas fees**. This disadvantage is particularly evident when the Ethereum network is congested, prompting some users to bypass the aggregator and use the underlying DEX directly. Although 1inch later launched a gas refund program to incentivize resolver network participants, this increased protocol costs, further compressing profit margins.

On-chain data also indicates that recent **large holding addresses (whales)** have been continuously selling 1INCH. Addresses holding between 10 million and 100 million 1INCH have been selling over the past two days, impacting the market with a '**bearish effect**'. While other whale categories have been accumulating, the selling pressure is clearly dominant, reflecting the divergence in large holders' outlook on the project.

## Technical and Fundamental Analysis

To comprehensively assess the investment value of 1INCH, it is essential to closely examine its technical architecture, fundamental indicators, and on-chain data performance. These factors collectively determine the project's long-term viability and the value support for the token.

**Technical Architecture and Innovation**: The core competitiveness of 1inch Network lies in its **Pathfinding Algorithm**. The protocol uses smart contracts to automatically split large trades into multiple sub-orders and route them to different DEXs for execution, thereby minimizing slippage. For instance, a trade exchanging ETH for DAI might be split into 30% executed via Uniswap V3 and 70% via SushiSwap. For trading pairs with extremely low liquidity, 1inch can also perform multi-step bridging, such as splitting a DAI→ETH trade into DAI→USDC→ETH to find the optimal execution path. This algorithm indeed saves users trading costs, especially advantageous when handling large orders. However, as competitors improve their algorithms, 1inch's technical advantage is being eroded, and the complex contract architecture leads to consistently high Gas fees.

**On-Chain Indicators and Network Usage** present a contradictory situation. On one hand, 1inch Network achieved **$155 billion** in trading volume in 2024, completed 53 million swaps, and grew its user base to 10 million, indicating strong actual usage demand for the protocol. On the other hand, this growth in usage has not translated into token price increases, reflecting the design flaws in the **value capture mechanism** of the 1INCH token. Unlike Uniswap's UNI token, 1INCH holders do not directly benefit from protocol revenue; instead, the token is primarily used for governance voting, and most average users have limited interest in participating in governance. This paradox of 'growth in usage but no increase in token value' is a key risk that investors need to be cautious of.

**Liquidity Supply and Market Maker Activity**: Data shows that 1inch's **resolver incentive program** has allocated over 1.5 million 1INCH tokens to reward market makers who support network operations by paying gas fees. The total budget for this program is 10 million 1INCH, aimed at improving network liquidity. Additionally, market makers like Arrington Capital are suspected of receiving 5 million 1INCH (accounting for 2.14% of circulation) to enhance market depth. These measures have indeed stabilized the market to some extent but have not reversed the overall downward trend. The recent significant drop in 1INCH supply on exchanges indicates potential accumulation of funds, but the price has yet to show a substantial rebound.

*Table: Key On-Chain Indicators Analysis for 1inch Network*

| **Indicator** | **Data Performance** | **Market Implications** |

|----------|--------------|--------------|

| Annual Trading Volume | $155 billion | Strong Protocol Usage Demand |

| User Count | 10 million | Broad Market Acceptance |

| Resolver Incentives | 1.5 million 1INCH Allocated | Liquidity Supply Support |

| Exchange Inventory | Sharply Decreased | Signs of Potential Accumulation |

| Whale Movements | Divergence (Some Selling) | Large Holders have Mixed Opinions |

| Gas Refund | Implemented | Reduce User Costs |

**Token Utility and Governance Participation** are weak links in the value proposition of 1INCH. Currently, the main functions of the 1INCH token include: governance voting to determine protocol parameters (such as fee structure, liquidity mining rewards); participating in the **staking reward** program (with an annual yield of approximately 10-35%); and serving as a payment method for certain services. However, these use cases have limited appeal to average users, especially when compared to other DeFi tokens. For example, the UNI token has allowed holders to share protocol revenue through fee switch proposals, whereas 1INCH lacks a similar value accumulation mechanism. Governance participation rates have also remained low, with most proposal voting rates below 5% of circulation, reflecting a lack of community engagement.

**Financial Health and Capital Reserves**: 1inch Network has secured ample funding through two rounds of financing ($2.8 million and $12 million), and the team has stated that part of the transaction fee income is used to maintain 'expensive server infrastructure' (approximately 100 high-performance servers). The project’s financial condition appears robust, but the lack of transparent financial reports makes it difficult for outsiders to accurately assess its sustainability. Notably, the 1inch Foundation is a non-profit organization, while the 1inch DAO manages the token smart contracts, theoretically ensuring that funds are used for ecological development, but the actual execution effectiveness remains questionable.

From **Roadmap and Future Development**, the 1inch team is committed to expanding cross-chain support and improving the staking protocol (which has upgraded from V1 to V2). However, compared to competitors like LayerZero, which has made innovations in cross-chain interoperability, 1inch's roadmap appears to lack breakthrough highlights. Whether the project can launch more attractive token use cases (such as revenue sharing) will be a key variable for future price trends. Currently, the market's evaluation of 1inch's **innovation speed** is not high, which is also an important factor suppressing its valuation.

## Investment Value Assessment and Future Outlook

After a comprehensive analysis of 1INCH's price trends, reasons for decline, and fundamentals, we need to assess its current investment value and outlook for future development. This assessment should balance short-term market sentiment with long-term value propositions, providing decision-making references for investors.

**Current Valuation Level** suggests that 1INCH may have entered a value range. At a price of $0.37, the market cap of 1INCH is approximately $520 million, with an annual trading volume of $155 billion, resulting in a price-to-sales (PS) ratio of about 0.003, which is in the **low range** within the DeFi space. Compared to peers like Uniswap, 1INCH's valuation discount reflects market concerns about its token economic model. From a historical perspective, the current price is close to the historical low of $0.22, down over 95% from the historical high of $7.87, indicating that most of the bubble has been squeezed out. Technically, although the short-term trend remains bearish, the RSI (45.16) does not indicate overselling, and the 200-day moving average ($0.332594) may provide support, suggesting limited downside potential.

**Institutional and Whale Movements** show divergent signals. On one hand, 'whale addresses' holding between 10 million and 100 million 1INCH have been continuously reducing their holdings, creating selling pressure on the market; on the other hand, the sharp decrease in exchange inventory indicates that funds are accumulating off-exchange. This divergence often appears in market bottom regions, reflecting differing judgments on the project's prospects among various investors. Notably, the 1inch team implemented a **HODLer Airdrop Plan** during the dual listing on Binance and OKX in March 2025, which may bring more liquidity and attention to the token.

**Potential Positive Catalysts**: Investors can pay attention to the following factors that may drive 1INCH's price recovery:

1. **Reform of Token Economic Model**: If the 1inch DAO proposes to distribute some protocol revenue to token holders (similar to Uniswap's fee switch), it will greatly enhance the token's value support.

2. **Enhancing Cross-Chain Functionality**: As user demand for cross-chain trading grows, if 1inch can achieve technological breakthroughs in this area, it may regain market share.

3. **Increase in Staking Rewards**: Currently, 1INCH staking yields about 10-35% annually; if further increased, it may attract more long-term holders.

4. **Overall Market Recovery**: If the Bitcoin halving effect manifests in 2025, leading to an altcoin season, 1INCH, as a mid-cap token, may attract funding attention.

*Table: Multi-Dimensional Assessment of 1INCH's Investment Value*

| **Evaluation Dimension** | **Current Status** | **Potential Rating** (1-5) |

|--------------|--------------|-------------------|

| Valuation Level | Close to Historical Low, Low PS Ratio | 4 |

| Token Utility | Mainly Limited to Governance, Limited Utility | 2 |

| Technical Advantages | Excellent Path Algorithm but High Gas Fees | 3 |

| Competitive Position | Facing Strong Competitors, Differentiation Weakens | 2 |

| Community Support | Active but Low Governance Participation | 3 |

| Liquidity | Good Exchange Support, Active Market Making | 4 |

| Regulatory Risk | The industry faces overall uncertainty | 3 |

**Risk Factors** should not be overlooked; investors need to be wary of the following situations that may exacerbate declines:

1. **Competition Intensifies**: If more capital enters the DEX aggregation field, or existing competitors launch more attractive features, 1inch's market share may continue to shrink.

2. **Regulatory Crackdown**: If regulatory bodies like the SEC impose strict regulations on DeFi aggregators, it may affect 1inch's operational model.

3. **Team Execution Risk**: Historically, the 1inch team lost some community trust due to the 'mouse warehouse airdrop' incident, raising doubts about whether it can effectively execute its roadmap in the future.

4. **Continuous Selling Pressure on Tokens**: Although most tokens are in circulation, the remaining unlocks may still bring selling pressure.

5. **Smart Contract Risks**: Complex routing algorithms increase the probability of contract vulnerabilities.

**Institutional Price Predictions** show a long-term optimistic but short-term cautious stance. Several analytical institutions predict that 1INCH may test the $0.46-$0.78 range in 2025, with a potential challenge of the psychological $1 mark in 2026, and may reach $5.16 by 2030. These predictions are based on the cyclical effects following the Bitcoin halving and hypothetical growth in the DeFi industry, but short-term (January 2025) predictions are estimated at only $0.33-$0.46, reflecting a cautious attitude towards immediate upside potential. Technical analysis indicates that 1INCH must break above the $0.396 resistance to confirm a short-term bottom; otherwise, it may test the $0.2622 support.

**Investment Strategy Recommendations**: Based on the current analysis, we believe that:

1. **Long-Term Investors**: Consider accumulating in batches in the $0.30-$0.35 range, setting strict stop-loss (e.g., below $0.25), targeting the $0.6-$0.8 range by 2025. Investment rationale should be based on the assumption of long-term growth in the DeFi industry and stable 1inch market share, rather than short-term trading.

2. **Short-Term Traders**: Can wait for a breakout above the $0.396 resistance to follow up, targeting $0.4465, or short if it breaks below the $0.3375 support, targeting $0.2622.

3. **Risk-Averse Investors**: It is recommended to wait until the token economic model improves or the overall market trend clearly turns bullish, focusing on whether the team introduces more substantial token utility.

**Industry Position and Future Positioning** will determine the long-term value of 1INCH. As one of the **first DEX aggregators**, 1inch enjoys first-mover advantages and brand recognition. In an ideal scenario, if it can better monetize its existing user base (10 million users) and enhance the token's value capture ability, 1INCH may regain market favor. However, if the team fails to effectively address competitive pressures and continue to innovate, the project may gradually become marginalized, especially in