Fragmented Liquidity and Soaring User Demands Are Pushing DEX Innovators to Deliver Powerful, Intuitive, and Secure Solutions.

As cross-chain functionality and regulatory scrutiny intensify, the race to unify digital and traditional finance has never been more urgent.

Fragmentation of liquidity and the surging demands of users are pressing DeFi innovators to come up with powerful, intuitive, and secure solutions. As cross-chain functionality and regulatory scrutiny intensify, the race to unify digital and traditional finance has never been more urgent.

Sergej Kunz, Co-Founder of 1inch, shares his insights with BeInCrypto on the evolving DEX aggregator, user empowerment, and the company’s next leaps—including Solana and Bitcoin integration.

Evolving DEX Aggregation and the Multi-Chain Future

“Liquidity is highly fragmented. It’s not just concentrated in DeFi or decentralized finance—it exists across various networks like Ethereum and Layer 2s such as Base, which is currently very popular.

Liquidity also resides on other chains, such as Sui and Solana. If you zoom out beyond DeFi and look at the broader crypto landscape, there’s substantial liquidity in Bitcoin.

While some of this liquidity is on centralized exchanges, a large portion is simply being held—without generating any passive income. However, earning passively on Bitcoin is now very feasible through DeFi.

Recognizing this, we shaped our strategy to expand outward, starting from within DeFi, moving into the broader crypto space, and eventually reaching into traditional finance.

Traditional finance encompasses a wide range of financial products that can be tokenized, and this is exactly the direction we’re heading in.

We’re integrating one chain after another. Today, we support cross-chain swaps across 13 chains, and we’re adding yet another.

The 1inch Approach

So we started out with just simple swaps among these different liquidity sources. Users had to create their own transactions and take on all the risks.

You mentioned MEV – Maximal Extractable Value. This is when someone else can see your transaction, manipulate the liquidity pools, and extract value from it.

We recognized that this became very well-known and widespread, and many people started exploiting it to extract value. If you look at my presentation from 2022, you’ll see that each year, a huge amount of money was lost by users through this attack vector.

So we came up with the idea that introducing a new architecture could simplify the user experience and the swap process itself.

Why not create a swap flow where users simply express intent, like placing an order, and the protocol that facilitates the order ensures the user gets the best execution? This led us to the idea of using Dutch auctions, a more technical description of this approach.

Under the hood, it’s relatively simple in terms of how it works. It’s more complex for professional actors—like market makers, arbitrageurs, and traders—who actually settle the user’s trades. But for the user, it’s just a simple intent.

I tell the system: I want this—I want Ethereum for USDC at the best execution—and the protocol ensures that. This has significantly changed things. We’re now seeing other teams adopt a similar approach, like Uniswap with its introduction of UniswapX.

They also mentioned us in the white paper—our intent-based fusion, which we call Fusion Swaps. It improves the user experience and enhances safety.

We invest heavily in security audits. I believe the 1inch Foundation spent around $500,000 on security for the latest release of cross-chain swaps, which is a significant amount.

About 10 security firms were involved in auditing the code. We do all this to ensure it’s highly secure and works seamlessly for the user.”

Bridging Crypto and Fiat: The 1inch Card and Real-World Payments

“Like many things, it started as a personal need. For example, we introduced cross-chain swaps because of my own personal need. That’s the honest truth.

But I soon realized it wasn’t just my need—many others were also looking for a seamless experience. I had a plan to earn passive income by investing in tokenized real estate.

In Dubai, you can already find some companies offering this. I’m using a company from the US with 20 years in the market. They started tokenizing real estate about five years ago.

I receive passive income payouts every week in USDC, and I want to spend them. For example, I want to buy a coffee with it, but it’s not that easy. You often need to deposit the money into Coinbase, then cash it out in euros, US dollars, or dirhams.

So we thought—why not partner with someone who already offers crypto cards as a white-label solution?

That way, we can collaborate with banks and cover regions like the European Union and the UK. I believe the US will follow soon, and we’re also looking for partners in the UAE and other areas.

At 1inch, we’re also actively researching AI. We’re currently developing a new aggregation product—something that might