1inch Price | Utility & Value Explained 1INCH

This staking action (creating a UP position) is the single point of activation for all subsequent value streams: governance participation, service access (as a Resolver), and delegation of UP for yield. All three value-capturing mechanisms are logically and economically linked, forming a closed structure of value flow and distribution for UP holders.

This sub-VCM represents tangible and intangible value derived from controlling the decision-making regarding resources, parameters, or updates on the protocol level. The requirement for obtaining governance power is locking 1inch token in the vote-escrow contract.

The governance power and related value can be obtained only after locking 1inch (UP position creation, which corresponds to the Risk Exposure) and casting a vote (the Conditional Action).

The governance of the 1inch protocol controls a number of protocol parameters (governance reward, referral reward, decay period), the Treasury with an associated dedicated income stream, and a countable number of improvement proposals, current and future.

This sub-VCM represents the value generated by running a Resolver. Resolvers perform work for 1inch protocol executing Fusion orders and earning fees as a result of this work.

Resolver deployment is conditioned on the UP position size, which must be at least 5% of the UP supply. If this requirement is met, access to the running resolver is enabled. After that, the user must install software on a dedicated server (the conditional action), which, in case of correct operation, generates fees from the execution of fusion orders.

Vote-Escrowed Access value-capturing details:

The user address owns at least 5% of UP (owned and delegated) (Risk Exposure)
Access to Resolver running is granted (Access)
The Resolver software is installed, maintained, and operates correctly, executing the Fusion orders (Conditional Action)
The value on top of the total UP position is captured as a result of the Resolver operation (Future Cashflow)

Note that UP cannot be slashed from the resolver. However, if resolvers violate protocol rules such as the priority fee cap, they will be temporarily banned from filling orders as punishment.

This sub-VCM represents the value (Future Cashflow) generated by the UP position owner (Risk Exposure) from delegating (Conditional Action) its UP power to another address.

When UP is delegated, the UP and associated governance rights are temporarily transferred to another address. The primary use case for delegation is to delegate to the resolver to receive a portion of the resolver's fees and additional rewards if provided.

Resolvers attract delegated UP from other users to meet UP position size rules (5% of total UP) and access various tiers of incentive programs (such as the Delegation Incentive Program, which distributed 1INCH to resolvers in proportion to their network share).