Victoria d’Este
Printed: March 06, 2025 at 9:31 am Up to date: March 06, 2025 at 9:32 am
Edited and fact-checked:
March 06, 2025 at 9:31 am
In Transient
Pushed by the necessity for seamless multi-source buying and selling, Sergej Kunz remodeled 1inch from a hackathon thought right into a high DEX aggregator, redefining DeFi innovation.
Why wasn’t anybody executing trades throughout a number of liquidity sources in a single transaction? That query led Sergej Kunz to construct 1inch, probably the most environment friendly DEX aggregators in DeFi. What began as a hackathon mission rapidly grew to become a game-changer, pushing the boundaries of decentralized buying and selling.
On this interview, co-founder of 1inch shares how he went from decompiling good contracts on YouTube to main DeFi innovation. He talks about staying forward of rivals, tackling MEV assaults, and the way forward for intent-based swaps, providing a deep dive into the evolving Web3 panorama.
Are you able to share your journey to Web3?
I began my YouTube channel to speak about crypto mining, and through certainly one of my weekly reside streams, I started exploring good contracts on Ethereum. I observed that some Ponzi schemes have been selling sure good contracts as a method to make more cash. I needed to clarify to those that they shouldn’t belief or spend money on such schemes as a result of a sensible contract is only a program—you’ll be able to learn it.
Nonetheless, I discovered that many of those contracts weren’t readable as a result of their creators didn’t add the supply code. So, I began decompiling them. At that second, my future co-founder, Anton Bukov, joined my livestream. He requested if he might assist since he already had intensive expertise with good contracts. That was my actual entry into the Ethereum house.
After half a yr of YouTube streams specializing in good contract safety, Anton and I made a decision to take part in hackathons. That’s when my Web3 and blockchain journey actually started. We traveled the world, taking part in about 17 hackathons over 14 months, constructing totally different initiatives.
I gained a number of hackathons, together with these in Stuttgart, the place I’m from, in addition to competitions organized by Daimler and Porsche. We additionally gained main prizes from Ethereum World, the principle organizer of Ethereum-based hackathons. The funds from these occasions allowed us to maintain touring and competing, which was how I totally immersed myself in Web3.
What’s the most underestimated technical problem in constructing an efficient aggregator inside the DeFi ecosystem?
The most important problem is steady innovation. Our journey began with a easy proof of idea on the Ethereum World Hackathon in New York in 2019. We requested ourselves: why isn’t anybody executing trades throughout a number of liquidity sources in a single transaction?
This method reduces value impression, permitting customers to get extra worth than in the event that they traded by a single liquidity supply. On the time, we had Uniswap (the primary model), Kyber, and Bancor Community. We tried our thought, and it labored. Some individuals understood its potential; others didn’t.
With MEV (Most Extractable Worth) considerations affecting DeFi merchants, what improvements have been explored to mitigate its impression throughout the business?
In 2022, I personally skilled MEV assaults. I misplaced about 10 ETH, which was painful. That motivated me to take motion. I mentioned the difficulty with our crew, and after brainstorming, we developed a protocol to guard customers from MEV by design.
We known as it Fusion. It’s basically an intent-based swap protocol. The thought is straightforward: as a person, you solely specify what you wish to obtain with out worrying about execution particulars. You set circumstances that should be met, and an executor—sometimes a market maker or arbitrage dealer—carries out the commerce below these circumstances.
We’ve additionally prolonged our intent-based method to cross-chain swaps. Since September final yr, customers can trade property throughout totally different blockchains totally routinely, in a non-custodial and bridgeless method. This ensures that if one thing goes fallacious, customers retain full management of their property. The business is unquestionably transferring in the precise course, with intent-based architectures changing into the usual.
With growing competitors amongst DEX aggregators, how do business gamers differentiate themselves past simply providing higher pricing?
Many initiatives try to repeat what we do—whether or not it’s intent-based swaps, traditional swaps, or cross-chain swaps. That’s high-quality. Competitors is nice for customers.
I’ve heard pitches the place groups declare they’re constructing “a extra environment friendly 1inch,” however usually, I haven’t seen something genuinely higher. Nonetheless, it’s good that individuals are investing money and time into enhancing DeFi.
We thrive in competitors. Coming from hackathons, we love the problem of staying forward. Proper now, our crew in Dubai—about 30 individuals—is conducting an inside hackathon to develop Solana assist for 1inch. That’s a small alpha leak for you!
General, competitors forces us to innovate, and we’re glad to see the ecosystem evolve.
How do decentralized exchanges mitigate the dangers of malicious liquidity swimming pools?
Our protocols execute transactions atomically, which suggests liquidity pool house owners can’t drain funds mid-transaction. This protects customers interacting with our platform.
Concerning illicit funds, we’ve a devoted compliance crew monitoring pockets exercise. If a hacker deposits stolen funds right into a liquidity pool, we are able to block transactions with that liquidity. Our resolvers—market makers executing intent-based swaps—are additionally screened. In the event that they obtain tainted funds, they’re blocked from utilizing our community.
This self-regulation is essential in stopping dangerous actors, like North Korean hackers, from laundering cash by DeFi.
How does institutional adoption of DeFi impression the way forward for DEX aggregators?
Institutional adoption brings extra liquidity and quantity. We already see Swiss banks providing crypto buying and selling and custody providers. Some firms in Germany present B2B options for brokerage techniques to supply crypto buying and selling.
Proper now, establishments primarily use centralized exchanges, however DeFi adoption is growing. To facilitate this, we’d like higher compliance measures, making certain establishments solely work together with clear liquidity.
What macroeconomic issue might considerably impression DeFi adoption?
It’s arduous to foretell precisely. If somebody knew, we’d all be getting ready for it. Nonetheless, I imagine non-custodial wallets will ultimately turn out to be as widespread because the Web. Within the early days, nobody thought they wanted the Web, however now it’s all over the place. Equally, sooner or later, everybody may have full possession of their property by non-custodial wallets.
We already see tokenized actual property, the place customers should purchase small fractions of properties for as little as $50. This makes investing extra accessible. DeFi additionally permits for brand new monetary fashions, like utilizing tokenized shares as collateral for loans.
Adoption will take time, and training is vital. We want higher person experiences and safer architectures to make DeFi extra accessible.
What are the important thing traits in Web3 and DeFi proper now? How do they differ from final yr?
Meme cash have been a significant development, however they’re dangerous. Whereas they appeal to new customers, in addition they trigger disappointment when individuals lose cash.
We’re additionally seeing extra AI-integrated blockchain initiatives the place customers can earn crypto by tagging AI coaching knowledge. Moreover, fee infrastructure is evolving, with fashions like crypto-based subscriptions rising.
At 1inch, we’ve developed a Web3 SaaS answer—just like Google Cloud however for blockchain. Customers can create accounts and pay for API providers straight with crypto. The business is transferring quick, and we’re excited to be on the forefront of innovation.
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About The Creator
Victoria is a author on a wide range of expertise matters together with Web3.0, AI and cryptocurrencies. Her intensive expertise permits her to jot down insightful articles for the broader viewers.
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Victoria d’Este
Victoria is a author on a wide range of expertise matters together with Web3.0, AI and cryptocurrencies. Her intensive expertise permits her to jot down insightful articles for the broader viewers.
