1Inch Network has been a success story so far. The DEX aggregator is looking to expand and has raised 175 million US-Dollars in a Series B funding round. Usually, that means that a company is selling a stake, but in this case, it means that the project sold 1INCH tokens in a private sale to institutional investors. And institutional investors are exactly what the next product of the 1Inch team is meant for.
What is 1Inch Pro and how can a decentralized service become attractive for the biggest players in the market?
1Inch is an aggregator
To understand what 1Inch Pro is aiming to achieve it is important to understand what the existing platform already does. It is a so-called DEX aggregator that allows swapping tokens on the Ethereum blockchain. It compares prices on several decentralized platforms and offers the best price available to execute the swap.
Since it is a decentralized application, no single entity controls the order books or holds custody of the funds from its users. 1Inch is not the only aggregator offering such a service, but it is trying to expand the business into a sector that faces regulation.
Institutional investors like banks or investment companies are unable or at least strongly limited in using such platforms. But this is exactly what the 1Inch team is trying to achieve with its upcoming platform.
1Inch Pro needs a license
In order to serve institutional customers, 1Inch will need a license to do business with them. While the Ethereum blockchain provides permissionless access, a protocol can require a permit. This means that 1Inch Pro is going to become a platform that cannot be freely accessed.
Instead, investors have to go through KYC and AML procedures and have to be accredited in order to use the aggregator. Also, liquidity pools from 1Inch and 1Inch Pro will be segregated. It is expected that this will open up a completely new market to institutional investors and is going to strengthen the DeFi sector. The series B funding included investors like VanEck, Alameda Research, Nexo, Celsius, and Gemini Frontier Fund.
With the fresh capital in its pockets, 1Inch will have to strive to find a place that will provide regulatory clarity and of course is willing to issue a license. While there is no launch date available some it is expected that 1Inch Pro could possibly become reality in 2023.