Everything you need to know about staking 1INCH and Providing Liquidity on 1inch.exchange.
38% of all governance rewards are distributed back to those staking 1INCH tokens.
If you are a 1INCH holder, you can stake your tokens on the 1inch protocol and collect governance rewards. Staking by itself is sufficient to be rewarded. Staking also opens up an opportunity to become a part of the 1inch instant governance. By participating in the governance through voting on major protocol parameters, you contribute to the 1inch protocols (Aggregation and Liquidity Protocols, currently) and your own earnings.
With the 1INCH Staking Rewards Calculator you can make assumptions for the 1INCH Trading Volume and Percentage of 1INCH being staked, in order to estimate earnings.
What is 1INCH Staking?
1INCH is an ERC-20 token issued to liquidity providers on the 1inch decentralized exchange. It is earned by providing liquidity to pools on 1inch.exchange and be staked to govern the protocol.
Staking 1INCH is relatively easy and requires an ethereum wallet like Metamask containing 1INCH and ETH to pay for gas. For our example we are using Metamask.
Other wallet options are below:
Prerequisites
To start make sure you have a Metamask Wallet with some 1INCH to Stake and some ETH to pay for gas fees.
How to Stake 1INCH
Step 1
Start by going to 1inch.exchange.
On the upper right hand corner you can click to “Connect Wallet“.
Since we are using the Metamask wallet for our example, select “Metamask“.
Once connected, click the “DAO” tab on the top heading.
Step 2
Once inside the DAO tab you will see a staking interface on the right side of the screen.
Here you will need to click “Unlock Token” – this action will prompt your wallet to grant approval for interaction with the staking contract.
Step 3
For the next step you will have specify approval type.
One Time Only: if you want to grant approval for your specified token amount (Unlock 25 1INCH – One time only)
– or –
Infinite Unlock (Recommended) : grant the wallet infinite approval to interact with the staking contract (Infinite Unlock – Best if you want to make multiple staking interactions in the future) – this will save on gas in the future.
Step 4
Once specified, your Metamask Wallet will prompt you to “Confirm” the smart contract interaction approval request.
Click “Confirm” once satisfied – you may want to edit the gas details.
Wait for the transaction to confirm on the blockchain. A common error for failed transactions is underpaid gas fee. You can view the status of your transaction on etherscan.io.
Step 5
Now that your wallet is approved to interact with the staking contract, enter the amount of tokens you would like to Stake.
You can select from 25%, 50%, 75%, and 100% of your wallet balance.
Click “Stake Token” when ready.
Step 6
Your Metamask Wallet will prompt you to verify the transaction.
Here you can click edit to adjust gas fees if you want to make any adjustments (be careful using below recommended gas fees or you risk the transaction getting stuck).
Once ready click “Confirm” and wait for the transaction to confirm on the blockchain.
Step 7
Congratulations you have now staked 1INCH token!
Here you will be able to see your staked balance and the option to “Unstake“.
You will start collecting rewards from here on out – you can also “Vote” for different aspects of the protocol based on yo9ur voting weight.
How to Provide Liquidity to 1inch.exchange
Step 1
Now that you are on 1inch.exchange and already have your Wallet connected – we will continue to demonstrate how to add Liquidity to the Liquidity Pools
From the top tabs navigate to “DAO“
Next click on “Pools” from the left hand menu.
From the list of pools select which one you want to deposit liquidity into. It is important to note you will have to deposit an equal amounts of each side of the asset in terms of USD value.
For our example we will be depositing liquidity into the 1INCH/ DAI pool – identify to pool you want to interact with and click “+” from the right hand side.
Step 2
Now that you have clicked into the pool you will need to “unlock” your wallet granting approval to interact with the smart contract for each asset in the pair.
Click the “Unlock Icon“.
Step 3
For the next step you will have specify approval type.
One Time Only: if you want to grant approval for your specified token amount.
– or –
Infinite Unlock (Recommended) : grant the wallet infinite approval to interact with the liquidity pool contract (Infinite Unlock – Best if you want to make multiple staking interactions in the future) – this will save on gas in the future.
Step 4
Once you click your unlock option type, for our example “Infinite Unlock” your Metamask Wallet will prompt you to confirm the transaction.
Click “Confirm” and wait for the transaction to be confirmed on the blockchain.
Again this process will need to be done twice, once for each asset in the pair.
Step 5
Now that you approved your wallet to interact with both sides of the asset pair you can specify how much assets you want to deposit as liquidity into the liquidity pool.
If you are looking to simplify things click “MAX” which will automatically set the amounts of each asset to deposit.
Once satisfied click “Provide Liquidity“.
Step 6
Next your Metamask Wallet will prompt you to confirm the transaction.
Here you can edit the gas fee – it is recommended to use the gas fee that Metamask recommends to avoid a transaction getting stuck or failing due to lack of gas. This is definitely an area you want to double check – you may want to weight the decision to actually confirm the transaction if the gas cost is to high. High gas fees are a major problem currently with Ethereum.
Once satisfied click “Confirm” and wait for your transaction to become confirmed on the blockchain.
Step 7
Congratulations you have completed depositing liquidity to a liquidity pool on 1inch.exchange!
Now time to sit back, relax and collect an APY from the pool trading fees.
Please be aware of the concept of “Impermanent Loss” which is a risk when providing liquidity to any LP on any exchange.
Conclusion
Staking the 1INCH token on 1inch.exchange was extremely easy and the APY providing by doing this is quite nice compared to similar projects in the market. Providing liquidity was easy as well, with 1inch.exchange you can even create your own custom LPs with custom assets.
The only draw back from this experience was the extremely high gas fees – this is not a 1inch.exchange issue but rather an Ethereum network problem. Keep an eye for 1inch.exchange to release their platform on other chains with potentially lower gas fees in the future. A lot to be excited for with 1inch.exchange!