The ultimate battlefield: 1inch cofounder Sergej Kunz is coming for centralized exchanges

Welcome to Slate Sunday, CryptoSlate’s weekly characteristic showcasing in-depth interviews, knowledgeable evaluation, and thought-provoking op-eds that transcend the headlines to discover the concepts and voices shaping the way forward for crypto.

Ask 1inch co-founder Sergej Kunz about the place DeFi is headed, and also you’ll get extra than simply your normal reply about monetary inclusion or a hedge towards fiat collapse.

Kunz isn’t one to mince his phrases, and he dives into the way forward for the sector like a hunter monitoring his prey; centered, relentless, and fully undaunted. For Kunz, DeFi’s future is seamless and, finally, peer-to-peer, delivering a UX so easy it makes centralized exchanges out of date.

As the main DEX aggregator and DeFi ecosystem, full with a modern new rebrand, 1inch just lately built-in with Solana and launched native, decentralized swaps spanning over 12 EVM networks. Smiling broadly, Kunz lays it out:

“We acknowledged that we have to develop; the entire DeFi house is not simply on Ethereum anymore.”

It’s an indication of the instances. From its early days in 2019, 1inch was strictly an Ethereum story, driving the primary wave of DeFi innovation. Kunz remembers:

“We began on Ethereum. It was solely Ethereum. And we added extra EVM-compatible chains like Binance Smart Chain, Polygon, all of the layers.”

Now, 14 chains later (with Solana becoming a member of the pack in April of this 12 months), one factor is clear: DeFi’s borders get blurrier by the week, and his imaginative and prescient of seamless interoperability between ecosystems is now not a distant dream.

“We began to mix the DeFi house, all of the chains collectively, and now rising to non-EVM appropriate chains. We will even add Bitcoin and all different blockchains that we will combine for the cross-chain swaps, so we will unite all of the liquidity in a single single place.”

If it sounds formidable, that’s most likely as a result of it is. Kunz isn’t the kind of individual to settle for second greatest. And why follow fragmented liquidity when one platform can unite all of it?

1inch: trustless swaps and seamless execution

Kunz’s relentless cross-chain focus comes paired with a laser eye on each safety and value. He’s emphatic about consumer autonomy and respecting the core pillars of decentralized finance (like eradicating the intermediary).

“Our worth proposition is non-custodial swaps, which suggests nobody must belief anybody. And the second worth proposition is the perfect execution on essentially the most liquidity that is accessible on the market.”

But uniting liquidity means extra than simply technical gymnastics. There’s a longer-term objective, and it’s about rendering centralized exchanges to a footnote in crypto historical past. He affirms:

“Theoretically, nobody wants centralized exchanges through the use of 1inch.”

Kunz insists that the magic of 1inch lies in consumer expertise, unifying the UX throughout a number of ecosystems and chains.

But how shut is DeFi to that legendary single-click, chain-agnostic move that web2 customers need?

“We are virtually there,” he says. “Right now, while you do a cross-chain swap, you simply join your pockets, you click on, and also you verify. You don’t do any transaction by your self.”

Intent-based protocols, or ‘fixing your personal downside’

Behind the scenes, it’s taken innovation. The 1inch protocol was invented in 2022 as a method of creating DeFi fairer and combating “sandwich assaults,” the actual model of front-running that haunts liquidity suppliers and merchants alike. He explains:

“We name it an intent-based protocol for swaps.”

That phrase, ‘intent-based protocol’, has been cropping up all over the place these days. Uniswap X has written about it, and, in truth, Kunz factors out that Uniswap X is based mostly on 1inch’s thought; it is even cited of their whitepaper.

“We can create a protocol that sells consumer orders to market makers, arbitrage merchants, and let the market makers compete between one another.”

Kunz compares 1inch’s strategy to conventional exchanges just like the Nasdaq, in that individuals create orders and market makers fill them. What’s totally different right here is giving the order on to an open, aggressive ecosystem {of professional} merchants who come first, settle first, and likewise partially fill. The numbers show the purpose:

“We have use instances the place somebody exchanged 12 million USDT to Ethereum and received $135,000 extra. If they did it by themselves utilizing a DEX immediately, they might get much less.”

He recounts his personal expertise with sandwich assaults, saying:

“I used to be sandwiched… front-run by a malicious change. And I acknowledged, okay, we have to repair this.”

The intent-based protocol was, due to this fact, born from necessity, he says with a smile:

“I solved my very own downside. No one can sandwich you or manipulate the liquidity.”

From DeFi to the broader crypto house

The dialog turns to stablecoins and the user experience gaps between chains. I level out that, regardless of the enhancements, DeFi is nonetheless fiendishly tough for normies to navigate, switching between networks and establishing wallets. He shrugs and says the ultimate objective is for customers to by no means want to fret about networks or bridges.

“It needs to be that customers mustn’t care in regards to the chain… they need to simply care what they’ve in USDC.”

As the roadmap stretches ahead, development is the one certainty for Kunz.

“We unite DeFi liquidity… after which we go to the crypto house. We combine Bitcoin. You can purchase any sh*t coin, memecoin, no matter coin. You can purchase actual Bitcoin, you get it in your pockets, and you can even promote Bitcoin. Same for Litecoin, identical for Ripple.”

1inch’s imaginative and prescient is clear: to develop from the “small DeFi house” to the broader web3 world, and ultimately contact conventional finance as effectively. He elaborates:

“Plenty of firms proper now, all of the banks, do tokenization of real-world belongings, however there’s no secondary buying and selling place the place you may commerce them in a single place. You must go to each issuer, possibly to a financial institution, to a single financial institution, for instance, to purchase tokenized wine. You can not simply provide it like that. You want correct regulation for that… Our plan is to supply our protocols and our software program service APIs for establishments to change such belongings in a extremely protected, non-custodial method.”

The showdown with centralized exchanges

And what’s on the fast horizon for 1inch? Kunz explains that the one-to-three-year plan is to “push ahead,” combine extra chains, go extra cross-chain, and supply a extra seamless expertise. Finally, he says with a glint in his eye:

“To battle, check, and compete with centralized exchanges.”

Did I point out that Kunz was formidable?

While most at the helm of CEXs envision a world the place DeFi and CeFi coexist, the juggernauts of decentralized finance don’t simply overlook being front-run.

And, with centralized change spot quantity dropping practically 28% in Q2 2025, CEXs needs to be sleeping with one eye open. DeFi is coming for their lunch.

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