Advanced cryptocurrency trading: How to get the BEST deals with THIS tool
Description
Did you know that when trading cryptocurrencies, you might actually end up paying a HIGHER price than what you see on CoinGecko or CoinMarketCap? Here I show you how I use 1inch Exchange to make sure...
AI Analysis
If you're into cryptocurrency trading, you might be surprised to learn that the prices you see on sites like CoinGecko aren't always what you actually pay. You could end up paying more, which can add up quickly. This video dives into how to consistently get the best deals by using an advanced tool called 1inch Exchange, a decentralized finance (DeFi) aggregator, and explains when and how to use it effectively to save significant money on trades.
Here’s a breakdown of the key strategies and insights shared:
* The Hidden Costs of Crypto Trading: It's common to pay more than the listed price on major crypto data sites. This means for every trade, you might be losing money without even realizing it. The goal is to avoid this "slippage" and secure the best possible rate.
* Introducing 1inch Exchange as the Solution: This platform acts as a DeFi exchange aggregator, meaning it combines multiple decentralized exchanges (like Uniswap, SushiSwap, and SakeSwap) to find the absolute best trading rate for your transaction. It essentially does the comparison shopping for you, saving you the hassle and ensuring you get more crypto for your money.
* Significant Savings in Practice: Using 1inch can lead to substantial savings. An example showed a saving of $260 on a $20,000 trade, compared to using a single exchange like Uniswap directly. The presenter regularly saves $50-$100 per trade, which accumulates to a lot over time. This tool is used almost daily to hit target prices for coins.
* How 1inch Exchange Works:
* User-Friendly Interface: The platform is straightforward. You select the token you want to spend and the token you want to buy.
* Extensive Token Support: You can find almost any token on their list, or simply paste the contract address from CoinGecko for custom tokens.
* Simple Swap Process: Once you've selected your tokens and entered the amount, you click "swap token," confirm the details (including the minimum received amount and price impact), sign with your wallet, and the transaction is complete.
* Behind-the-Scenes Aggregation: 1inch automatically routes your order through the most liquid and best-priced exchanges. It even shows you how much you're saving compared to other individual exchanges.
* Advanced Strategy: Splitting Large Orders:
* Addressing Liquidity Issues: For larger trades (e.g., $10,000+ or 10 Ethereum worth), liquidity on a single exchange can be a major problem. As you try to buy a large quantity, the price might significantly increase due to low supply at that specific price point.
* Automated Order Splitting: This is where 1inch truly shines. It can automatically split your large order across multiple exchanges (e.g., part on Uniswap, part on SushiSwap) to tap into deeper liquidity pools. This ensures you get a much better overall rate, even for massive transactions, by combining the best prices from various sources.
* Important Considerations and Trade-offs:
* Increased Fees for Aggregation: While 1inch saves you money on the exchange rate, aggregating across multiple exchanges can sometimes lead to slightly higher estimated transaction fees (gas fees).
* Comparing Fees vs. Savings: It's crucial to always check the fee before processing a transaction. If the estimated fee is unusually high, or if the amount saved on the rate doesn't justify the increased fee, it might be better to use a plain, single exchange like Uniswap or SushiSwap directly.
* Estimates Can Be Off: The estimated savings displayed on 1inch are not always perfectly accurate and can fluctuate. It’s a good practice to manually compare the current 1inch quote with a direct quote from Uniswap or another single exchange for the exact same amount to confirm the real savings.
Situational Use: 1inch isn't always the only* solution. Its effectiveness can depend on current market conditions and liquidity across different pools. Being smart means understanding when to use 1inch and when a direct exchange might be more cost-effective. Despite some tedious comparison, the consistent savings of $50-$100 per trade make it worthwhile.
* Leveraging Uniswap V2 and V3: 1inch is particularly powerful because it can tap into liquidity from both Uniswap V2 and V3 pools simultaneously, offering even better rates by combining these sources.
* What's Next in the Advanced Trading Series: Future videos will cover other critical advanced trading topics, such as setting limit orders and, very importantly, how to prevent failed transactions. Failed transactions can cost you $20-$30 in gas fees each time, so learning to avoid them is a significant money-saver.
Transcript
Hey guys, and welcome to my new series on advanced trading. These are tips and tricks I've accumulated over the past year in decentralized finance, and they will significantly make your trades better by either saving up money or by making sure a transaction is going to go through. Now, in the first episode that we're talking about today, we're going to talk about getting the best deal. This is one time whenever you trade, a lot of times you're going to not get the best rate that you see reporte...