Fragmented liquidity and hovering person calls for are pushing DeFi innovators to ship highly effective, intuitive, and safe options. As cross-chain performance and regulatory scrutiny intensify, the race to unify digital and conventional finance has by no means been extra pressing.
Sergej Kunz, Co-Founding father of 1inch, shares his perception with BeInCrypto on evolving DEX aggregation, person empowerment, and the corporate’s subsequent leaps—together with Solana and Bitcoin integration.
Evolving DEX Aggregation and the Multi-Chain Future
Liquidity proper now could be extremely fragmented. It’s not simply concentrated in DeFi or decentralized finance—it exists throughout varied networks like Ethereum and Layer 2s akin to Base, which is at the moment highly regarded.
Liquidity additionally resides on different chains, akin to Sui and Solana. In case you zoom out past DeFi and have a look at the broader crypto panorama, there’s substantial liquidity in Bitcoin.
Whereas a few of this liquidity is on centralized exchanges, a big portion is solely being held—with out producing any passive earnings. Nevertheless, incomes passively on Bitcoin is now very possible by means of DeFi.
Recognizing this, we formed our technique to develop outward, ranging from inside DeFi, shifting into the broader crypto house, and ultimately reaching into conventional finance.
Conventional finance encompasses a variety of economic merchandise that may be tokenized, and that is precisely the path we’re heading in.
We’re integrating one chain after one other. Immediately, we assist cross-chain swaps throughout 13 chains, and we’re including one more.
The 1inch Method
So we began out with simply easy swaps amongst these completely different liquidity sources. Customers needed to create their very own transactions and tackle all of the dangers.
You talked about MEV – Maximal Extractable Worth. That is when another person can see your transaction, manipulate the liquidity swimming pools, and extract worth from it.
We acknowledged that this grew to become very well-known and widespread, and many individuals began exploiting it to extract worth. In case you have a look at my presentation from 2022, you’ll see that every yr, an enormous amount of cash was misplaced by customers by means of this assault vector.
So we got here up with the concept that introducing a brand new structure may simplify the person expertise and the swap course of itself.
Why not create a swap move the place customers merely specific intent, like inserting an order, and the protocol that facilitates the order ensures the person will get one of the best execution? This led us to the thought of utilizing Dutch auctions, a extra technical description of this strategy.
Below the hood, it’s comparatively easy when it comes to the way it works. It’s extra complicated for skilled actors—like market makers, arbitrageurs, and merchants—who truly settle the person’s trades. However for the person, it’s only a easy intent.
I inform the system: I would like this—I would like Ethereum for USDC at one of the best execution—and the protocol ensures that. This has considerably modified issues. We’re now seeing different groups undertake the same strategy, like Uniswap with its introduction of UniswapX.
Additionally they talked about us within the white paper—our intent-based fusion, which we name Fusion Swaps. It improves the person expertise and enhances security.
We make investments closely in safety audits. I consider the 1inch Basis spent round $500,000 on safety for the most recent launch of cross-chain swaps, which is a major quantity.
About 10 safety corporations had been concerned in auditing the code. We do all this to make sure it’s extremely safe and works seamlessly for the person.
Bridging Crypto and Fiat: The 1inch Card and Actual-World Funds
Like many issues, it began as a private want. For instance, we launched cross-chain swaps due to my very own private want. That’s the sincere reality.
However I quickly realized it wasn’t simply my want—many others had been additionally searching for a seamless expertise. I had a plan to earn passive earnings by investing in tokenized actual property.
In Dubai, you possibly can already discover some corporations providing this. I’m utilizing an organization from the US with 20 years available in the market. They began tokenizing actual property about 5 years in the past.
I obtain passive earnings payouts each week in USDC, and I wish to spend them. For instance, I wish to purchase a espresso with it, however it’s not that straightforward. You typically must deposit the cash into Coinbase, then money it out in euros, US {dollars}, or dirhams.
So we thought—why not associate with somebody who already presents crypto playing cards as a white-label resolution?
That means, we will collaborate with banks and canopy areas just like the European Union and the UK. I consider the US will observe quickly, and we’re additionally searching for companions within the UAE and different areas.
At 1inch, we’re additionally actively researching AI. We’re at the moment growing a brand new aggregation product—one thing which may even launch beneath a sub-brand centered closely on AI.
Massive bulletins are on the horizon—what we’re seeing now could be only the start.
Regulatory Adoption, Safety Instruments, and Sustaining Decentralization
At 1inch, we prioritize person safety and security. That’s why we’ve performed in depth safety audits from the very starting.
We additionally work with associate safety corporations that assist us on this effort. Moreover, we’ve constructed a product that we provide to integrators and companions to assist forestall scams and fraud.
It lets us detect what pockets is related and whether or not there’s an asset switch to a selected deal with.
We will establish if a pockets is related to hackers or scammers, particularly if it has been flagged or tracked.
For instance, safety corporations like TRM Labs can decide whether or not a pockets belongs to a malicious actor—probably a hacker, a sanctioned particular person, and even somebody linked to North Korea.
We take this accountability very severely. We constructed our personal API and software program service round this, and it’s built-in into the 1inch Pockets—a non-custodial pockets—in addition to in our dApp and swap interface.
DAO Governance and Constructing Neighborhood Belief
DAOs are nonetheless considerably experimental. Nevertheless, a number of tasks—like Curve, MakerDAO, Compound, and even Chainlink—have sturdy communities.
After all, there are some challenges. Many individuals take part, however not all of them are specialists. That stated, the DAO mannequin is evolving.
We’re now seeing DAOs start to rent skilled corporations specializing in serving to handle belongings, course of grant requests, and deal with proposals—whether or not to vary protocol settings or to refine the DAO’s general technique. Issues are bettering.
Personally, I’d like to see extra individuals actively collaborating in DAOs so we will proceed constructing and innovating.
As for 1inch, the DAO gives grants to assist growth on the 1inch Community—for instance, funding tasks that contribute to the community’s development or supporting contributors who wish to work full-time on the ecosystem.
A few of them obtain annual grants to develop particular merchandise or sub-projects.
Solana Integration and the Path to Cross-Chain Liquidity
We’re excited to announce the combination of Solana—that is one piece of a a lot bigger puzzle and an vital step ahead for us.
By including one other chain, we’re persevering with to reinforce the person expertise, permitting customers to focus much less on which community they’re utilizing and extra on the belongings they wish to alternate. The objective is seamless interoperability throughout networks.
We plan to combine extra blockchains, together with Bitcoin, Sui, Aptos, and others at the moment trending or actively traded on centralized exchanges. Whether or not it’s Bitcoin-like cash or newer protocols like Sui and Aptos, we intention to assist as many belongings as doable.
Our imaginative and prescient is to unify liquidity throughout chains and ship a really seamless expertise for customers.
Growth Roadmap: Integrating Bitcoin and Extra Chains
Bitcoin is subsequent. There’s an enormous quantity of Bitcoin on the market—it represents the biggest pool of liquidity in all the crypto house. That’s why we’re planning to combine Bitcoin for seamless swaps.
Customers will be capable to purchase actual Bitcoin and obtain actual Bitcoin, with out having at hand over their cash to a 3rd get together and easily hope to get their BTC in return.
It is going to be a trustless, peer-to-peer program with no single level of failure. The good contract will do precisely what it’s designed to do.
After Bitcoin, we are going to deal with integrating different high-performing blockchains like Sui, Aptos, and extra.
Disclaimer
In compliance with the Belief Undertaking pointers, this opinion article presents the writer’s perspective and should not essentially mirror the views of BeInCrypto. BeInCrypto stays dedicated to clear reporting and upholding the best requirements of journalism. Readers are suggested to confirm info independently and seek the advice of with an expert earlier than making selections based mostly on this content material. Please word that our Phrases and Circumstances, Privateness Coverage, and Disclaimers have been up to date.