Decentralized exchanges (DEXs) continue to evolve, offering innovative solutions to common challenges like impermanent loss and pricing accuracy. Among them, 1inch stands out with its automated market maker (AMM) platform, Mooniswap, which incorporates unique features aimed at improving user experience and protecting liquidity providers.
This guide provides a detailed, step-by-step overview of participating in the 1INCH token pre-mining initiative. Please note that the token had not been officially launched at the time of writing, and all information is based on the initial proposal. Always refer to the latest official announcements for the most accurate details.
Understanding Mooniswap and the 1INCH Token
What Is Mooniswap?
Mooniswap is an AMM-based decentralized exchange developed by the 1inch team. It introduces two major innovations:
- Virtual Balances: A concept initially proposed by Vitalik Buterin designed to reduce impermanent loss for liquidity providers.
- Oracle-Based Pricing: Implements a time-weighted average price (TWAP) mechanism through oracles to improve pricing accuracy.
These features position Mooniswap as a competitive alternative to platforms like Uniswap, with a similar user interface and enhanced economic mechanics.
1INCH Token Distribution
The 1INCH token is set to be distributed through liquidity mining on Mooniswap. Key aspects of the token distribution include:
- The total supply has not been fixed; only percentage allocations are provided.
- Tokens will be released on a per-second basis, similar to the CRV pre-mining model.
- The initial circulating supply is set at 16%, covering security, marketing, and community initiatives—excluding mining rewards.
- This is a preliminary proposal; a final tokenomics model will be announced upon the official launch.
Overview of the Pre-Mining Program
The pre-mining phase allows users to earn 1INCH tokens by providing liquidity to specific pools. Important features of the program include:
- Only selected pools are eligible for pre-mining; more may be added later.
- Some pools support dual-farming, meaning users can earn both 1INCH and other tokens.
- Similar to Curve’s model, 1INCH uses a "voucher" system during pre-mining. These vouchers contain a fixed number of tokens and must be redeemed within 18 months.
- Vouchers are transferable once unlocked.
- Additional 1INCH-specific pools may be introduced in the future.
Should You Participate in 1INCH Pre-Mining?
Before joining the pre-mining program, consider the following:
Potential Benefits
- Early participants may benefit from favorable token release conditions compared to the formal four-year emission schedule.
- Dual-farming opportunities could increase overall yield.
Risks and Considerations
- Liquidity on Mooniswap is still developing, so fee earnings may be limited compared to established platforms.
- Stablecoin pools may offer lower annual percentage yield (APY), while volatile pairs come with higher impermanent loss risk.
- The broader market context—bull or bear—could affect token value at the time of release.
Recommendations
- Prioritize pools that support dual-farming.
- Only provide liquidity using tokens you intend to hold long-term.
- Favor lower-risk pairs like BTC/ETH or USDT/ETH if you are risk-averse.
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Frequently Asked Questions
Q1: Is the 2% pre-mining allocation too small?
A: Not necessarily. Compared to CRV’s 5% pre-mining allocation and shorter emission period, 1INCH’s model can be more attractive for early participants.
Q2: Is the lock-up period too long?
A: The 18-month redemption window is reasonable compared to other DeFi projects. However, the final token release schedule won’t be confirmed until weeks after the official launch, introducing some uncertainty.
Q3: How do I decide whether to participate?
A: Weigh the opportunity cost. Many high-APY farming options are available, so consider pairing 1INCH pre-mining with dual-yield opportunities. Also, stick to tokens you believe in long-term.
Q4: Which pools are the best to join?
A: Pairs like ETH/AMPL support dual-mining but come with higher risk. For lower impermanent loss, consider established pairs like ETH/BTC or stablecoin pools.
Q5: Can I trade the vouchers before redemption?
A: Yes, vouchers are transferable once unlocked, providing flexibility before the official token release.
Q6: When will 1INCH officially launch?
A: The exact date hadn’t been announced at the time of writing. Follow official 1inch channels for the most current updates.
Step-by-Step Pre-Mining Tutorial
Here’s how to participate in the 1INCH pre-mining process using an ETH/USDT pool as an example:
- Connect Your Wallet: Visit the Mooniswap interface and connect a compatible Web3 wallet like MetaMask.
- Select a Pool: Navigate to the "Pool" section and choose ETH/USDT or another supported pair.
- Add Liquidity: Enter the amount of each token you wish to supply. Confirm the transaction in your wallet.
- Stake LP Tokens: If required, stake the liquidity provider tokens in the designated farming section.
- Monitor Rewards: Track your voucher accumulation through the platform’s interface.
Each step requires transaction confirmation via your wallet. Gas fees will apply, so ensure you have sufficient ETH to cover these costs.
Participating in early-stage liquidity mining can offer attractive rewards, but it’s essential to understand both the opportunities and the risks involved. As with any DeFi activity, conduct thorough research, use only risk-capital, and stay updated with official project communications.