Centralized Exchanges May Become Frontends for DeFi in 5–10 Years, Says 1inch Co-Founder
1inch co-founder Sergej Kunz suggests that centralized exchanges will evolve into mere interfaces for decentralized finance over the next decade.
1inch co-founder Sergej Kunz expressed that centralized crypto exchanges might gradually diminish into frontends for decentralized finance (DeFi) within the next five to ten years. In an interview at Token2049 in Singapore, Kunz remarked, “It will take like five to 10 years.”
He pointed out that while current centralized exchanges function as isolated markets, 1inch and its aggregator operate as a global liquidity source. His insights coincided with 1inch’s announcement of a partnership with prominent US crypto exchange Coinbase, through which it integrates services to enable DEX trading for Coinbase users.
Kunz elaborated that the investment in on-chain systems by centralized exchanges reflects their acknowledgment that their existing technology may not endure forever due to the rise of DeFi and decentralized exchanges. He stated, “They don’t want to miss the train and stay behind; they adopt our technology because it’s something that will empower the entire financial sector.”
Sergej Kunz at Token2049. Source: Cointelegraph
1inch Transitions to Becoming an Infrastructure Provider
This report follows 1inch’s recent shift in business strategy to become a DeFi infrastructure provider, aimed at facilitating access for other enterprises. This pivot intends to encourage the adoption of non-custodial swaps by major centralized exchanges and wallets, specifically naming Binance, Coinbase, Ledger, MetaMask, and Trust Wallet in the announcement.
Kunz remarked that the protocol has consolidated its services into a single application programming interface (API) for developers, highlighting that the majority of the platform’s business now derives from API integrations rather than its own front end, which has been the trend for approximately one year.
1inch’s Expansion Endeavors
In August, 1inch introduced intent-based cross-chain swaps to link Solana and Ethereum virtual machine networks, ensuring maximum extractable value protection. In June, they enhanced their price route discovery algorithm, claiming improved swap rates by up to 6.5%.
Roughly a year ago, 1inch also launched a feature that allows users to swap digital assets across chains while retaining self-custody of their investments.
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Recent developments within the DeFi space continue to reshape our understanding of decentralized finance’s role in the current cryptocurrency ecosystem.
