Founder interview with Sergej Kunz.
Dear Sergej Kunz, thanks for taking the time to join me in this interview to educate our community on 1inch.exchange!
Can you give us a brief introduction to you? What is your story, dating back as far as you wish?
Thanks for inviting me, Stefan!
I was born in Siberia and moved as a child with my whole family to Germany, where I have been living for about 20 years now. I started to study programming while I was 14 and keep on doing it every day. My professional experience is around 15 years of software engineering, architecture and security. In 2007, I started my first own business in the field of telecommunication aggregation and software development, and for the last couple of years I’ve been working for Porsche AG.
Why did you get involved in the cryptocurrency industry, and where do you think the industry will be in 5–10 years?
Back in 2011, one of my colleagues told me about mining and I tried it myself. Was mining LTC and also BTC for a while, but soon lost interest in this technology. In December 2016, I found out that it’s possible to mine ETH with GPU’s, built my first mining rig and was very amused with the results. In the next few months after that, I had already 15 kWh of consumed electricity by my own mining rigs. In 2018, I started to work with Anton Bukov on livestreaming security audits via YouTube to teach people how to read Ethereum smart contracts. At first I didn’t have huge smart contract development experience, but I had a YouTube channel CryptoManiac that we renamed later to CryptoManiacs. Also, of course, I had massive experience in software engineering, but Anton was mostly doing the audit himself, while being an expert at writing smart contracts.
I believe that in the next 5–10 years the DeFi industry will grow a lot. We will eliminate intermediaries such as banks and replace them with DeFi. You can see it already growing, but the boundaries of peer-2-peer technologies are much wider. And, for sure, ‘the new black’ is everyone’s concern about privacy and data security — no one should touch you without your permission.
That’s amazing, Now can you give us an introduction to 1inch.exchange and its history?
1inch is a decentralized exchange / DeFi aggregator that sources liquidity from various exchanges and is capable of splitting a single trade transaction across multiple DEXes. Launched in 2019 by two co-founders — Sergej Kunz, CEO, and Anton Bukov, CTO, — in less than eight months 1inch has surpassed $200M of the overall volume and keeps on growing.
So how did you get started with 1inch.exchange, and why? Early on, did you see an opportunity to fill a void in the market?
In December 2018, together with Anton we started to participate in ETHGlobal and other blockchain hackathons around the globe. First run was very successful for us! We won three sponsor prizes just by coding a dApp for SetProtocol, Kyber and MakerDAO in a few hours. By now we have attended more than 15 hackathons and implemented different ideas which we had. One of the ideas was 1inch.
We were practicing before the New York hackathon in 2019 with an arbitrage bot when we managed to discover the gastoken approach and several other techniques which are now part of 1inch.exchange. We found out that it is quite easy to improve the exchange rate by just swapping little by little on several exchanges. During the hackathon I talked with Hayden Adams from Uniswap, Liam Horne from ETHGlobal, Vitalik Buterin, and some other people from the Ethereum community. I explained them the idea, so some of those guys said ‘man, that sounds not durable to improve the rate a lot by just splitting and using an algo’. Some like Vitalik said ‘good idea, try to implement it!’
Throughout the whole hackathon period we didn’t sleep at all, but in the end we had a fully working MVP which could improve the price, for example, ETH to SAI at higher amounts by more than 20%! Additionally, we used the arbitrage approach: find where to sell tokens distributed among various DEXes for the best price, not more and not less.
What have been the biggest challenges for you and 1inch.exchange since you started the project?
To be honest, the biggest challenge was to find time to sleep! Together with Anton we’ve been really hard working throughout the whole year from the start of the project. And we managed to integrate almost every possible liquidity source to improve 1inch’s usability of swapping with the best prices on the DEX market.
Understood. Now what has been your greatest achievement thus far, and what has been the biggest failure or setback personally or in the history of the company?
I’d say that the greatest achievement was to enable a lot of people from the Ethereum community to use our service. At the beginning of our story at the ETHGlobal hackathons we were no one and had no name. And now we are very happy to see such a great community using our dApp on a daily basis.
As for now more than 7.3k wallets have interacted with 1inch smart contract throughout a year. According to Google Analytics, we have 1.5k+ DAU and 21k+ MAU on our website, while 120–150 users are on average active per unit of time.
Top-5 markets (by region):
- Asia — 33%
- Europe — 24%
- North America — 20%
- CIS — 10%
- Africa — 9%
Top-5 markets (by country):
- United States — 16%
- India — 6%
- Indonesia — 5%
- Russia — 5%
- United Kingdom — 4%
1inch has already integrated support for top DEXes like Uniswap, Kyber Network, Airswap, Oasis, and Bancor. As of April, 2020, 1inch is the clear leader accounting for up to 80% of the total volume from DEX aggregators, while a large number of the most liquid tokens are connected to 1inch via the liquidity pools of largest DEXes.
What makes 1inch.exchange unique and how do you plan to compete with the largest exchanges in the industry?
We aim to unite traders and liquidity providers, facilitating transactions that are profitable for both sides. The core functionality of 1inch is to aggregate data from various decentralized exchanges and to combine the best prices from all bids with the necessary liquidity. Moreover, 1inch.exchange is capable of splitting a single trade transaction across multiple DEXes and finding different routes, a dynamic powered by smart contract tech that’s aimed at helping users optimize and customize their trades, making our platform an extremely convenient point of single entry for everyone interested in DeFi. In addition, we offer a fully on-chain open source version of 1inch protocol that dozens of developers are already using in their projects to have easy access to all of the DeFi liquidity.
What is the next step for 1inch.exchange in the next 1–2 years?
Due to our estimates by the end of 2020, 1inch.exchange should have up to 80% share of the whole DEX market, as for the users it will be much easier to swap tokens via our platform then to check bids on all the different protocols and pools manually. And in 2021, 1inch is going to be ready to compete with centralized exchanges for users who swap assets a few times a day.
Moreover, soon 1inch team plans to release a new algorithm that will allow traders to get better access to liquidity distributed between different protocols and thereby provide much better prices to our users.
Where can people support your business? Other than that, thank you for your time — any final words?
Anyone interested in crypto trading can just try using 1inch.exchange and independently verify the convenience of our dApp. If they will enjoy their experience, they can share it with their friends and partners. That would really help to turn people from using CEXes to various DeFi services and bring us into a truly decentralized future.
Interview with Sergej Kunz, co-founder, and CEO of 1inch.exchange. was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.