$1INCH #

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

## Overview of the 1INCH Project and Market Status

1inch Network is a **decentralized trading aggregation protocol** that uses algorithms to find optimal price paths across multiple decentralized exchanges (DEXs), providing users with a low slippage trading experience. The project was launched in 2020 and quickly became an important part of the DeFi infrastructure, 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 about **$0.37**, with a market cap of $520 million, and its ranking has fallen out of the top 50 cryptocurrencies. The circulating supply is about 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 swaps in 2024, completing 53 million transactions and growing its user base to 10 million, this increase in usage has not translated into price support for the token. Instead, the price of 1INCH continues to decline, reflecting the disconnect between **token utility and network usage**.

From a technical 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 dip to $0.2622.

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

| **Indicators** | **Values** | **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 95% from High |

| Historical Low | $0.22 | Limited Downside Risk |

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

| Fear and Greed Index | 70 (Greed) | Market Sentiment Divergence from Token |

The business model of 1inch Network essentially collects spreads through **trade routing optimization**. Although the official claim is "no explicit fees collected", in reality, when the transaction price is better than what the user has set, 1inch retains that part of the spread as revenue instead of returning it to the user. This "**less refund more not return**" model has sparked community controversy and has prompted some users to turn to more transparent trading aggregators like DeBank Swap.

## Major Reasons for Sustained Price Decline Analysis

The long-term weakness of the 1INCH token price is not caused by a single factor but is the result of multiple negative factors stacking up. Understanding these reasons for the decline is crucial for judging 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 became embroiled in the "**Mouse Ware Airdrop**" scandal, where the community discovered that the team address received an airdrop of 363,000 1INCH tokens. Although the official explanation was that this was an oversight during testing governance functions where that address was not excluded from the airdrop list, this incident severely damaged community trust. Even more discontenting for investors was that the team also deducted fees from transaction costs to maintain "expensive server infrastructure" (about 100 high-performance servers), while the project had already received 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 news directly caused the price of 1INCH to plummet by 25% on the day the news broke, initiating a long-term downtrend.

**Defects in Token Economic Model** are the deep-seated reasons restricting the price of 1INCH. The primary function of the 1INCH token is **governance voting**, lacking a strong value capture mechanism. Unlike DEX tokens like Uniswap, 1INCH does not directly share protocol revenue, and holders cannot receive a share of transaction fees. This design disconnects token value from actual protocol usage; even though 1inch Network handled $155 billion in transaction volume, it cannot directly translate into token demand. Furthermore, the token release schedule also brings ongoing **selling pressure**, with the current circulation reaching 83.6% of the maximum supply (1.25 billion / 1.5 billion), and while future inflation pressure is relatively limited, the continuous unlock over the past few years has undoubtedly suppressed price performance.

**Intensifying Market Competition and Weakened Differentiation** pose severe challenges for 1inch. The field of decentralized trading aggregators 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 "**less refund more not return**" model, returning the optimal price difference to users rather than retaining the spread like 1inch. This more user-friendly business model is encroaching on 1inch's market share. Additionally, mainstream DEXs like Uniswap are also continuously improving their routing algorithms, reducing reliance on aggregators.

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

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

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

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

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

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

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

**Market Environment and Industry Trend Changes** have also affected 1INCH's performance. The bear market from 2022 to 2023 has led to a significant shrinkage of the overall DeFi TVL (Total Locked Value), and the decrease in trading volume directly impacts the aggregator’s revenue. More importantly, as blockchain infrastructure develops, the demand for **cross-chain trading** is growing, while 1inch, despite supporting multiple chains, does not provide an experience as good as competitors focused on cross-chain solutions. Furthermore, regulatory uncertainties are looming over the entire DeFi industry, especially the SEC's crackdown on cryptocurrency staking services has caused market panic, resulting in a single-day drop of 11.6% for 1INCH.

**Technical Shortcomings** are also one of the limiting factors. The smart contracts of 1inch are more complex than those of basic DEXs like Uniswap, leading to **higher gas fees**. This shortcoming is particularly evident during periods of congestion on the Ethereum network, prompting some users to bypass the aggregator and directly use the underlying DEX. Although 1inch later launched a gas refund program to incentivize resolver network participants, this increased protocol costs and further compressed profit margins.

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

## Technical and Fundamental Analysis

To comprehensively evaluate the investment value of 1INCH, it is necessary to delve into its technical architecture, fundamental indicators, and on-chain data performance. These factors collectively determine the project's long-term survival capability and the value support of the token.

**Technical Architecture and Innovation**: The core competitive advantage of 1inch Network lies in its **pathfinding algorithm**. The protocol automatically splits large trades into multiple sub-orders via smart contracts and routes them to different DEXs for execution, thereby minimizing slippage. For instance, a transaction exchanging ETH for DAI might be split with 30% executed through Uniswap V3 and 70% through SushiSwap. For trading pairs with extremely low liquidity, 1inch can also perform multi-step bridging, such as splitting a DAI to ETH transaction into DAI to USDC to ETH to find the optimal execution path. This algorithm does save users on trading costs, especially when handling large orders, where the advantage is apparent. However, as competitors improve their algorithms, 1inch's technical advantage is being eroded, and its complex contract structure continues to lead to higher gas fees.

**On-Chain Indicators and Network Usage** show a contradictory trend. On one hand, 1inch Network achieved a **$155 billion** trading volume in 2024, completing 53 million swaps and growing its user base to 10 million, indicating strong actual usage demand for the protocol. On the other hand, this increase in usage has not translated into rising token prices, reflecting a design flaw in the **value capture mechanism** of the 1INCH token. Unlike Uniswap's UNI token, 1INCH holders do not directly benefit from protocol revenue, and tokens are primarily used for governance voting, with most ordinary users having limited interest in participating in governance. This paradox of "increased usage but stagnant token value" is a key risk that investors need to be cautious about.

**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 supporting network operations for gas fees. The total budget for this program is 10 million 1INCH tokens, aimed at improving network liquidity. Additionally, market makers like Arrington Capital reportedly received 5 million 1INCH (accounting for 2.14% of the circulating supply) to enhance market depth. These measures have stabilized the market to some extent but have not reversed the overall downward trend. Recently, the supply of 1INCH on exchanges has sharply decreased, indicating that funds are accumulating, but there has been no substantial rebound in price.

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

| **Indicators** | **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) | Mixed Opinions Among Large Holders |

| Gas Refund | Implemented | Reduce User Costs |

**Token Utility and Governance Participation** is a weak link 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 rewards** program (annual yield of about 10-35%); and serving as a payment method for some services. However, these use cases have limited appeal to ordinary users, especially when compared to other DeFi tokens. For example, the UNI token has enabled holders to share protocol revenue through fee switch proposals, while 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 obtained sufficient funding through two rounds of financing ($2.8 million and $12 million), and the team has stated that part of the transaction fee revenue is used to maintain "expensive server infrastructure" (approximately 100 high-performance servers). The project's financial situation appears stable, but the lack of transparent financial reporting makes it difficult for outsiders to accurately assess its sustainability. Notably, the 1inch Foundation is a non-profit organization, while 1inch DAO is responsible for managing the token's smart contracts; this structure theoretically should ensure that funds are used for ecological development, but the actual execution effects are questionable.

From the perspective of **roadmap and future development**, the 1inch team is committed to expanding cross-chain support and improving the staking protocol (which has been upgraded from V1 to V2). However, compared to competitors like LayerZero, which have made innovations in cross-chain interoperability, 1inch's roadmap lacks 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 low, which is also an important factor suppressing its valuation.

## Investment Value Assessment and Future Outlook

After a comprehensive analysis of the price trend, reasons for decline, and fundamentals of 1INCH, we need to evaluate its current investment value and outlook for future development. This evaluation needs to balance short-term market sentiment with long-term value propositions, providing decision-making references for investors.

**Current Valuation Level** indicates that 1INCH may have entered a value zone. At a price of $0.37, the market cap of 1INCH is about $520 million, which corresponds to an annual trading volume of $155 billion, resulting in a price-to-sales ratio (PS) of about 0.003, placing this valuation in a **low range** within the DeFi sector. Compared to peers like Uniswap, the valuation discount of 1INCH reflects market concerns regarding its token economic model. Historically, the current price is close to the historical low of $0.22, down over 95% from the historical high of $7.87, with most bubbles having been squeezed out. In terms of technical indicators, although the short-term trend remains bearish, the RSI (45.16) does not show oversold conditions, and the 200-day moving average ($0.332594) may provide support, indicating that the downside may be limited.

**Institutional and Large Holder Movements** show divergent signals. On one hand, "whale addresses" holding 10 million to 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 suggests that funds are accumulating off-market. This divergence typically occurs at market bottom areas, reflecting different investors' judgments about the project's prospects. Notably, the 1inch team implemented a **HODLer airdrop plan** during the dual listing on Binance and OKX in March 2025; this exchange support may bring more liquidity and attention to the token.

**Potential Positive Catalysts**: Investors may pay attention to the following factors that could drive the price of 1INCH up:

1. **Reform of Token Economic Model**: If the 1inch DAO, through proposals, allocates part of the protocol revenue to token holders (similar to Uniswap's fee switch), it will greatly enhance the value support for the token;

2. **Enhanced Cross-Chain Functionality**: As user demand for cross-chain trading grows, if 1inch can achieve a technical breakthrough in this area, it may regain market share;

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

4. **Overall Market Recovery**: If the Bitcoin halving effect emerges in 2025, triggering an altcoin season, 1INCH, as a mid-cap token, may gain attention from investors.

*Table: Multi-Dimensional Evaluation of 1INCH Investment Value*

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

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

| Valuation Level | Close to Historical Low, Low Price-to-Sales 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, Weakened Differentiation | 2 |

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

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

| Regulatory Risk | The industry as a whole faces uncertainty | 3 |

**Risk Factors** should not be overlooked, and investors need to be cautious of the following situations that may exacerbate the decline:

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

2. **Regulatory Crackdown**: If regulatory agencies like the SEC implement strict oversight on DeFi aggregators, it may affect 1inch's operating model;

3. **Team Execution Risk**: Historically, the 1inch team lost some community trust due to the "Mouse Ware Airdrop" incident, and there are doubts about whether they can effectively execute the roadmap in the future;

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

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

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

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

1. **Long-Term Investors**: Consider building positions gradually in the $0.30-$0.35 range, setting strict stop losses (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 market share for 1inch, rather than short-term trading;

2. **Short-Term Traders**: May wait for a break above the $0.396 resistance to follow up, targeting $0.4465, or go short after breaking down 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 launches more substantive token utilities.

**Industry Position and Future Positioning** will determine the long-term value of 1INCH. As one of the **first DEX aggregators**, 1inch enjoys first-mover advantage and brand recognition. In an ideal scenario, if they can better monetize the existing user base (10 million users) and enhance the token’s value capture capability, 1INCH is expected to regain market favor. However, if the team cannot effectively respond to competitive pressure and continue to innovate, the project may gradually become marginalized. Particularly in