An announcement was made by 1inch regarding the launch of their utility and governance token. A number of details were revealed by the project about what is to come and how the tokens will be used. Apart from that, the project also provided some insight into the distribution model that will be used and the community would be provided a number of incentives. 1inch is a decentralized finance (DeFi) project and the announcement of the launch of its utility and governance token is undoubtedly a turning point in its development and history. The announcement was made on December 25th and it was confirmed that the token will be used for both, the platform’s AMM protocol and the DEX aggregator service.
A governance model is used by the protocol, which is referred to as the ‘Aggregation Protocol’ and it enables stakers to vote on how the distribution of the Spread Surplus coins will take place. As far as the creation of the coins is concerned, it happens when the final rate of transaction that goes through the aggregator is higher than what was confirmed by the user. The proceeds will then be divided between the referrer and the governance reward and it is up to the DAO to determine how much each party would receive.
According to what details were provided, the governance reward will originally be zero. Another important thing that you need to know is that the 1inc Liquidity Protocol will be used for converting the spread surplus coins and this will help in turning them into 1INCH tokens. The protocol will also provide stakes and liquidity providers the ability to vote on different parameters of the protocol, such as price impact fee, swap fee, governance rewards, referral rewards, and decay time, alike. Some of the parameters will be unique for every individual liquidity pool.
However, there will also be those that will apply to every liquidity pool. Moreover, it should also be noted that they are also introducing liquidity mining programs for a total of six new pools and they are expected to arrive shortly. Every single one of the new tokens will be paired against 1INCH tokens and the list of these tokens include DAI, USDT, YFI, WBTC, USDC, USDT, and ETH. In addition, almost 30% of the total supply of the token, which is around 1.5 billion, has already been allocated to the incentives that will be given to the community.
As far as the funds are concerned, these will be granted in the next four years. Once this is done, there is also an additional 14.5%, which has been set aside for the growth and development fund of the protocol. This is also expected to be unlocked sometime in the next four years. This is another development in the rapidly expanding decentralized finance (DeFi) space. This year has resulted in immense growth in this industry and it is expected to increase even further, with blockchain and crypto moving towards mainstream adoption in the long run.