[Music] I'm going to stop talking and we're going to jump right in to our very first talk of the day. And for this one, I'd like to bring on Sergey from 1 in to tell you all about crosschain DeFi. Please give him a big round of applause. [Applause] So, hi everyone. My name is Ser Kun.
I'm co-founder of 1 in soft engineer software architect for 20 years. I'm going to speak about today about expansion expanding horizons of TI um what is the future in terms of crosschain and the fragmented liquidity what we see um nowadays. So we are still early. If you look on the uh crypto uh against the internet adoption, we are right now in the year I would say 2001. So uh if you count the uh total crypto users with the total global internet users uh I I still remember uh on these days where people said um I'm I'm already very old.
Maybe some of you are you didn't catch it, you didn't see it. Um people were saying like who needs internet? Yeah. And we used this uh um we uh we had to dial in into internet through phone line and had to wait a long time until you you you were you was connect connected and you had really slow internet connection and somehow you had to deal it with this. Uh it's similar with crypto right now from our point of view.
we we can do much more um in in in the next future and uh get more user. So uh web three is is bigger than web two. Web two was more about and is still is uh about sharing information um publishing something. It's less about ownership. Web three is about ownership.
So you own your assets uh you own your information. We is not just only digitalized finances. Um what is more about like financial services, trading, uh um lending, borrowing. Um web 3 is about decentralization and uh ownership itself. So what is DeFi?
Defy is a blockchain based system that automates financial transactions through smart contracts eliminating the need of intermediates. So sounds great. U in the real world is uh a little bit ex um kind of um um difficult. Yeah. Uh to implement everything what what we want to have in this finances.
Uh different uh companies implement different things. uh still try to adopt the traditional finance but uh such things like uh unis swap shows that it's possible to implement what we have already in traditional finance but in fully different manner what is much more efficient so for example the IMM actually maybe not everyone know that first liquidity pools were created by banker network so they were really the first guys who implemented it unis swap did it much more efficient by introducing um pairs to Ethereum with the units of V1 and used much more efficient um ma mathematical formula what was published by uh Gnus's founder like already like um 2017 I think in a blog post. So about defi um defi is uh accessible it's composible it's tr trustless and it's noncast custody self custody so accessible means you don't need um a bank account you don't need a permission from someone to access um the uh digitalized finances you need just internet and you need a device what run application like a wallet wallet, self-custody wallet. It's composible. You can build on top of existing products, own products.
What we did at with one in we were born in a hackathon in T global hackathon in New York City in 2019. My personal record of sleepless hours is 56 sleepless hours. So, uh it was a really great experience and it's still grinding me uh today. um what what I I I was able to um to to experience uh on this Ethereum global hackathons. We were hunting with Anton every Ethereum global hackathon around the globe.
So uh we were everywhere in Bangalore in in South Africa in Cape Town in uh New York uh Denver uh yeah um all right um defy accessibility you have global um global access 24/7 there's no credit check no one tell you that you are not allowed to open account the setup of the account is also instant and you you you don't need any balance uh or assets to to create one defa composibility um a lot of things can be built on top of the um the um uh existing products. So we um at one in we just came to the idea why we are not combining all liquidity sources into a single one. We use math and um it was simple thing. So we just offered to swap on one pair for example back to the days Ethereum die uh or die to Ethereum. I wish I would could I could buy more Ethereum to this day.
So it was uh I think it was like 100 bucks or something maybe 80 bucks. Yeah. That's was that's was really nice. So um yeah there are people building leverage protocols b on top of lending uh and borrowing uh money markets. Uh automatization is a new topic uh nowadays where people uh based on intentbased protocols offer easily to um to participate in farmings uh by leveraging even by leveraging deposition.
So staking is also um like liquid staking for example is something on top of normal staking. Defa is trustless. Um you don't need an intermediates. You just you just interact with the smart contract with the program on a digitalized computer where it's available around the globe by just having internet connection device non custody. So non-custodial you have no middlemans and you don't need any deposits.
You don't need to give your money away to someone who will potentially gamble with it. So you don't need it. We have technology what allows you to trade to do some other things without um trusting anyone. If you look at the market size we have our current um defy market size is um is quite small. So if you look we have around 120 billion US dollars total value locked means someone provide liquidity in in AMMs automate market makers like unis swap um balancer curve or uh lending protocols as well we have um around 15 billion US dollar every day u volume um in west dollars um sometimes a little bit more than 15.
Um I was surprised one and a half weeks ago we have seen 7.2 billion US dollars volume in 24 hours at 1 in. I still remember this first days of 1 in when um we we came from the hackathon and Anton gave me a call and said Sergey we had in like two weeks one $10,000 volume. We were really surprised to see that and we were we were happy uh for every $1,000 what was exchanged through our smart contracts. Nowadays we see uh volume growing but it's not that big as uh on the crypto market.
Um crypto market I call um crypto market the centralized exchanges. So there are a lot of centralized exchanges. If if you look on decentralized exchange and compare with the dexes. So dexes are more global. So they are global.
So our decentralized finances in in in general is a global thing. Uh and centralized exchanges are locally based somewhere uh isolated also from the liquidity and access to the liquidity. you have APIs of the of the of the of the centralized exchange but you need to do deposits, you need to do withdrawals, then um then you need to trade. So there a lot of interactions but uh in D5 you can just directly interact. So uh centralized exchanges we have um crypto market capitalization about like 3.
4 trillions. It's like little we cannot compare it with the TVL. It's like apples and oranges and bananas here as with the traditional market um with the global equity market capitalization with 123 trillion. Delhi centralized exchange trading volume is higher of course because they don't need to pay transaction fees. Um it's not because we cannot handle this TPS transaction per per second.
We have already all the layer twos also layer one with a bigger block block size can handle a lot. This is kind of a centralized thing where not everyone need to pay fees. Yeah. So they they generate the design is not um the same as what we have in this exchanges. That's why from my point of view we have much higher volumes.
It's like uh 10 times more. And uh if you compare with traditional financial market, it's a it's the biggest thing what we have right now. Uh we have only on NASDAQ around 318 billion US dollars volume. So and it's just one isolated uh exchange and uh we have huge room to grow. We can we can expand to to bigger markets by um by by building the what allows us to tap into the liquidity.
If you look in the D5 fragment fragmentation, we are not anymore only on Ethereum. Back in 2019, there was only Ethereum. Then Polygon came, Binance Smart Chain um and others. So liquid liquidity became more fragmented. We have now we have on Tron more more or less the good like huge amount of USDT.
Um on Salana we have all the memecoins Trumpcoin uh but uh since a couple of days ago I have seen Xtos released u tokenized stocks on Salana and it's already available on Jupiter somehow. So um we see that this binary smart chain all the layer twos. If you look into the crypto fragmentation D5 is really only small part of it. Um a good part but uh not as big as uh Bitcoin. The in Bitcoin a lot of liquidity sitting in Bitcoin and less people are using it.
So you cannot really do anything in Bitcoin. I I think some people building something on Bitcoin like um also on layer twos or something. Um from our point of view we can easily bridge defy on or connect bit defy to bitcoin as well and all the other like old things like even if ethereum classic is traded around 120 million a day. Uh it's I don't know who need ethereum classic and why they do that. It's also interesting that someone is doing that and there's actually volume users.
Is there anything better than centralized exchanges? I would say yes. So um we came to a solution in 2022 to protect our users from math from sandwich attacks. So when you do the transaction by yourself, you take risks that the transaction can fail. You take also additional risks then um that that someone see your transaction in me poolool and try to extract value from it.
So if you do a a dark swap on the on the on the DAX, you perform the the swap with maximum acceptable price impact. So if it if the return amount drops below the mean return, you will the transaction will fail. Yeah. But if it's still in this range, then the the trade would go through. You would get less.
It's what what the attackers are doing. They're extracting value. Along in 2024, these math bots extracted$1.1 billion US from users. So we we came to a solution how to prevent it by architecture design.
We introduce intentbased swap protocol. So um you just create an order it's offchain order. You just give a signature it goes to one network to the market makers and arbitrators and these professionals do the settlement for you to for the price finding algorithm we choose touch auction. I will show in the next slides how does it work. So what what we came to is we found out that if you take our intentbased protocol extended with atomic swaps with hashtime lock contracts what already are existing since 2013 someone came with a suggestion to implement it in Bitcoin.
So it's still there but no one really used it. And I understand why because they didn't had our intentbased protocol. We didn't even understood that it's possible until we worked long time with 10based protocol and thought okay actually we need just a small extension to allow and 10b atomic crosschain swaps by combining these two technologies. We call it just one. So to simplify it so everyone understands that's uh it's not uh intended by swap or fusion we call it like it's our internal name or fusion plans for crosschain swaps um I try to communicate that it's just a swap yeah so with with additional support of different different features so when you swap is seamless it's like on central exchange you click a button you just need to confirm you sign it with your non-custody wallet and it goes to the network and the magic happens under the hood with huge um security um and safety level for the user itself.
It's costless. You you don't need even uh to to send a transaction. You um just give a signature and of course you need a permit or approval. So permit is also gasless. Uh some tokens doesn't support uh permits.
That's why you need to to do approval but it's only once. It's secure. It's uh self custody. Everything what we're building at one in is following two principles. Non- custody.
So you don't give us your funds. So you interact directly with the program and you you get your funds back if something goes wrong. And uh because it's atomic atomic swap where if it stacks somewhere in the middle you get the uh the so transaction reverts and you get it back. So you don't need to trust any centralized uh uh entities actors. It's extensible.
You can write your own extensions uh own hooks and you can write your own implementation based on the spec on any available blockchain what supports programming language like EVM or um have maybe own virtual machine. Um we recently also deployed on uh Solana uh with a little bit different architecture but almost the same approach. Um so it's possible to just build it also for Bitcoin. Uh you need just to write the the the Bitcoin script what um handles the uh the hash lock contracts. It's competitive.
There's a Dutch auction um used for uh price finding. Uh I will explain in the next slides. uh it's efficient uh because of the Dutch auction and it's trustless. There are no third parties uh involved. Um no third party decide what price is best for you.
The market decides. So you get math protection by design by architecture design. So you don't need to trust uh that someone protect you and uh choose for you the best execution. And it's just the based on the market conditions. Um you you get the best execution.
Uh we support already 13 networks and we are expanding. We recently added uni chain and sonic. Solana came couple of months ago. It's gasless. Uh not everywhere on Salana is not gasless.
Uh you pay 0.06 cents to announce the order. Uh but it gives you better decentralization. I think we will also make an extension for EVM compatible chains to allow uh as well not gasless uh order announcements. So we we get more decentralization so you don't rely on our relay network.
So what what I like what I have seen yesterday on Vitalik speech um I like u the principles what he presented that if you are not anymore tomorrow anymore there um it should still work. Yeah. So liquidity comes from across the entire market. It's um so all the market makers can participate. They need to pass uh one in foundation um um KYC and KYB um KYB and uh ML compliance screen.
So we ensure that no sanctioned people can settle at one network. So we are kind of safe. The engine looks like like this. Looks like a little bit complicated but it's highly simple. It's just an environment where um people like people can participate um companies can participate settle and user and institutionals even can can use our attach to to settle.
Dutch auction works like that. Uh you see um this real world example someone got 29,000 was more. This is a brand new 911 turbo not turbo s but turbo uh what they got because by use because of using our tach um the future of trading is 247 trustless self custody trading uh and VCO already um nowadays uh Robin Hood announced on chain for tokenized stocks so we are walking in the right direction um you're welcome to join to our uh fem global and 1 in hackathon, unite defi come over and build um nice nice things with a price pool of 500,000 west. Thank you very much. It was a pleasure to be here.
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