1inch Co-Founder: Launching On Solana | Sergej Kunz
🎯 Summary
Podcast Episode Summary: 1inch Co-Founder: Launching On Solana | Sergej Kunz
This 45-minute episode features an in-depth discussion between host Jack Cumanek and Sergej Kunz, Co-founder of the DeFi protocol 1inch, focusing on their recent expansion from the Ethereum Virtual Machine (EVM) ecosystem to Solana. The core narrative revolves around the technical challenges and strategic advantages of bringing 1inch’s sophisticated DEX aggregation technology to Solana’s high-throughput environment, particularly in competition with established players like Jupiter.
1. Focus Area
The discussion centers on Decentralized Finance (DeFi), specifically DEX Aggregation and Liquidity Routing. Key areas include the technical differences between EVM and Solana architectures, MEV (Maximal Extractable Value) mitigation strategies, and the philosophical debate between open-source and closed-source protocols in the Solana ecosystem.
2. Key Technical Insights
- Intempest Swap Protocol (Solana Launch): 1inch launched a unique “aggregator of aggregators” on Solana called the Intempest Swap Protocol. This system uses a Dutch Auction mechanism to sell user orders to market makers/arbitrageurs, allowing for on-chain order announcements (costing under $1) which is noted as being more decentralized than their previous EVM off-chain signing approach.
- MEV Protection by Design: The new protocol is designed to be inherently protected from MEV extraction (like sandwich attacks) by design, unlike many native Solana DEXs that rely on external RPC endpoints (like Jito) and associated bribes.
- Liquid Protocol Re-emergence: Kunz detailed their older, MEV-protected Liquid Protocol (developed in 2020), which used Dutch auctions to immediately solve arbitrage opportunities, preventing liquidity providers (LPs) from being exploited by just-in-time liquidity attacks. They plan to deploy an adapted version on Solana.
3. Market/Investment Angle
- Competition with Jupiter: 1inch acknowledges Jupiter as the current leader in Solana aggregation but aims to compete by offering superior MEV protection and better price impact reduction for larger trades via their unique routing engine (which is patented).
- Value Capture for LPs: The MEV-protected protocols aim to redirect value currently captured by searchers and MEV services back to liquidity providers, creating a positive feedback loop (more LP earnings $\rightarrow$ more liquidity $\rightarrow$ better rates $\rightarrow$ more volume).
- Price Improvement for Large Swaps: For large transactions, 1inch claims their architecture significantly reduces price impact, citing historical EVM examples where users received substantial savings (e.g., 1 on 35,000 more WETH).
4. Notable Companies/People
- 1inch (Sergej Kunz): The primary subject, detailing their expansion and technical approach.
- Jupiter: Acknowledged as the dominant DEX aggregator on Solana, which 1inch is directly competing against.
- SolFi/Ellipsis Labs: Mentioned as an example of a proprietary, closed-source DEX on Solana that achieves high efficiency, contrasting with 1inch’s open-source ethos.
- ZenRock/ZenBTC: Featured as a sponsor segment discussing Bitcoin exposure and yield generation on Solana via a decentralized custody network.
5. Regulatory/Policy Discussion
Kunz expressed significant skepticism and caution regarding closed-source protocols on Solana (like SolFi). He views protocols where developers control the logic without open-source verification as highly centralized, raising regulatory red flags similar to traditional customer service entities, and increasing the risk of hacks (citing the Bybit incident). He strongly advocates for fully non-custodial and atomic execution.
6. Future Implications
The conversation suggests a future where sophisticated, MEV-resistant routing engines become the standard, even on high-speed chains like Solana. 1inch is positioning itself as the provider of the infrastructure layer that abstracts away complexity and security risks for the end-user, potentially even integrating with existing successful aggregators like Jupiter as “resolvers.” The trend toward proprietary, non-open-source DEXes on Solana is highlighted as a significant area of tension with established DeFi principles.
7. Target Audience
This episode is most valuable for DeFi professionals, blockchain architects, liquidity providers, and crypto investors focused on layer-one performance comparisons (EVM vs. Solana) and the evolving landscape of DEX aggregation and MEV solutions.
🏢 Companies Mentioned
đź’¬ Key Insights
"So, we need cross-chain to offer a seamless experience similar to centralized exchanges. So, in a centralized exchange, you don't care about the network, right? So, you just interact like you buy Bitcoin, you sell Bitcoin, you buy ETH, you buy Tron token, you don"
"It's both. So, we focus to sell B2B, like to to sell our APIs to be integrated. For the case if someone appears who is much better than us and maybe the application, the user interface, and the wallet itself, we are still good. We are still integrated in the applications. It makes all the sense. It's a collaboration approach, and our collaboration is the key for success from our point of view..."
"What we do at Oneinch is what you do, we do business integration. So, we work with all the wallets. So, you said like everyone offers swaps, but under the hood, most of the products Oneinch is integrated made a MetaMask wallet and by an SVP 3 wallet, okay, XVP 3 wallet, CoinGecko SVP 3 wallet..."
"So, for example, when someone swaps in one direction, so normally on the on the DEX, we have an arbitrage opportunity in the reverse direction. So, what we did with the money for Oneinch Liquid Protocol is when you when someone swaps in one direction, the arbitrage opportunity, the protocol starts to solve the arbitrage opportunity in Dutch auction."
"We can extract this value from Gito and put into liquidity provider hands, you know? So, liquidity providers can actually get this money by just providing liquidity in a protocol what is protected from MEV by design."
"It's highly terrible when you sit in Uniswap and someone does just-in-time liquidity providing and gets all the fees from the trade, and you don't get almost anything."