Centralized exchanges will be DeFi front ends in 5–10 years: 1inch co-founder

Centralized crypto exchanges could disappear within the next decade as decentralized finance (DeFi) aggregators take over, according to 1inch co-founder Sergej Kunz.

In an interview with Cointelegraph at Token2049 in Singapore, Kunz predicted that exchanges will slowly transition into frontends for decentralized exchanges (DEXs). “I think it will take like five to 10 years,” he said.

Kunz argued that while centralized exchanges are isolated markets, 1inch and its aggregator act as a global liquidity hub. His comments came as 1inch announced a deal with major US crypto exchange Coinbase, integrating its service to provide DEX trading to its users.

Kunz said that investments into onchain systems by centralized exchanges show their understanding that the technology they rely on “will not stay forever because you have decentralized exchanges and digitalized finance.”

“They don’t want to miss the train and stay behind, and they adopt our technology, because it’s something which, from our point of view, will empower the whole financial industry,“ he said.

Sergej Kunz at Token2049. Source: Cointelegraph

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1inch pivots to infrastructure provider

The report follows this week’s announcement by 1inch that it has changed its business model to become a DeFi infrastructure provider, focusing on providing access to other businesses. With the transition, 1inch aims to facilitate the adoption of non-custodial swaps by major centralized exchanges and wallets — specifically mentioning Binance, Coinbase, Ledger, MetaMask and Trust Wallet in the announcement.

Kunz said the protocol has unified its products into a single application programming interface (API) for developers. He noted that most of the platform’s business now comes through API integrations rather than its own front end, a trend that has held for about a year.

Related: DeFi platform dYdX plans Telegram trading in roadmap update as earnings slide

1inch keeps betting on expansion

In August, 1inch rolled out intent-based crosschain swaps to connect Solana and Ethereum virtual machine-based networks, providing maximum extractable value protection. In June, 1inch deployed an update for its price route discovery algorithm, claiming up to 6.5% better swap rates.

About a year ago, 1inch also introduced a feature that enables users to swap their digital assets crosschain while maintaining self-custody of the assets.

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