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1inch Network Debuts Earning Pool for Liquidity Providers

The 1inch Network launched a new investment tool called 1inch Earn, hoping to boost liquidity providers. The protocol claimed in a press release shared with CryptoPotato that the new feature will provide a more efficient use of capital compared to SMP pools. How does 1inch Earn Liquidity Pool work? A set of liquidity pools optimized for stablecoins, 1inch Earn’s business model is similar to Uniswap V3 series orders. “Income comes from fees on swap transactions in the pool,” the 1inch Network news release said. Individual users, algorithmic trading bots and arbitrage traders will execute the swaps. 1inch Earn offers “deep liquidity anytime” due to its integration into the 1inch Pathfinder algorithm. The DeFi protocol said revenues from the new investment tool would be “in the 5-10% APY range” at launch. Later on, profitability will depend on how the market behaves. The concept of 1inch Earn has been in practice in the 1inch Network Treasury since September 2021. Previously it was called Trading Strategies. The popular aggregator of decentralized protocols believes that 1inch Earn will improve decentralization and management over the network. In addition, it will prove to be an attractive earning tool for users, the project said in its PR. “The launch of 1inch Earn will be an important step towards improving the sustainability of the entire network and stepping up decentralization and community-led governance, while also acting as a lucrative earning tool for users,” it reads. the PR of 1inch Network . How is it different? 1inch Earn uses capital in the SMP pools more efficiently, the team said. “In a standard pool, all liquidity is equally distributed along with the entire price range between zero and infinity. As a result, most liquidity is never used,” explains the PR. To remedy this anomaly, 1inch Earn allows liquidity providers to use smaller price ranges. “For example, it could be between 0.99 and 1.01. In that case, traders get deeper mid-price liquidity for swaps, and liquidity providers earn more fees,” it reads. This scenario seems more appropriate for stablecoin pairs where “liquidity outside their typical price range is almost never used.” In addition, 1inch Earn uses small movements in stablecoin prices to help liquidity providers execute additional swaps and generate additional income. “Once a transaction is confirmed, a user immediately starts earning revenue in the form of both tokens deposited into the pool. Regularly updated statistics are visible on the 1inch Earn dashboard,” explains the PR of 1inch Network. 1inch network on a growth trajectory Continuing its goal of “conquering the DeFi space,” the DEX aggregator announced on January 20, the implementation of its cross-chain aggregation and limit order protocols on Gnosis Chain and Avalanche. In early December 2021, 1inch completed a $175 million financing round that it would spend to improve products and services aimed at institutional investors. SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and get $100 Free and 10% Off Fees on Binance Futures First Month (Terms and Conditions). PrimeXBT Special Offer: Use this link to register and enter POTATO50 code to get 25% off trading fees.
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