How to Bring 1bn Users To Decentralized Finance? | European Blockchain Convention

foreign [Music] yeah please go ahead okay so hi everyone my name is Sergey I'm co-founder of one inch Network uh before I start my keynote I would like to play a game with you guys so I have some one-inch chips here which you can get also in a booth if you install our wallet these are one inch tokens uh real life airdrop of our one inch tokens which can be used for staking and participating in a lot of protocols which we have can someone explain what D5 is anyone anyone knows what is defy is finance very nice two two chips for this Mr um what is a Dax decentralized exchange really nice and one more what's what is C5 centralized finances yeah uh this Mr very nice uh so I see you are very educated that's nice to see um um I would like to start uh can someone start my presentation no it's not working maybe full screen would be great we have less time um so I will start so I I plan to uh what I understood um in the last uh like one of years we were traveling around the globe participating on a conferences I recognized that not everyone knows what exactly CIFA is D5 is destroyce exchanges how that works which approaches are existing on industrialized finances uh I try to explain uh also which risks we see in decentralized finance which risk we have in centralized finances so let's uh let's go ahead sorry this okay all right so uh centralized finances we have uh really nice advantages in centralized Finance this uh we we use in this case um portal platform which is uh uh built by centralized entity which can be shut down what we have seen FTX if some greedy people gamble with the client money so in the case of FTX 8 billions of US dollars were lost just yeah over like a couple of years maybe one of years and that's it's a huge problem centralized finances um of course on the other side we have nice ux UI great execution no transaction course just on your trading trading fees potentially that's and maybe also good quality of support and this is really nice but on other side uh not not you key not it's not not your money right so what what Gessler said previously in Twitter in the video it's very nice to hear that um and kind of um we see also some hacks sometimes it's happening that centralized exchanges are drained by hackers and these funds are somehow misuse for uh for countries which are on sanctioned lists we have from our point of view a better approach it's very terrible I'm sorry can someone control the presentation please and go down to the slides okay now so what we have in in centralized Finance centralized exchanges we have around 570 centralized exchange right now for cryptocurrencies um we have a good daily trading volume of 80 billion okay uh let's go we have really huge volume on centralized crypto exchanges okay next slide okay and the other side the better solution from my point of view and point of view of my team which is right now very very big uh like 150 contributors around the globe uh we are building the future of Finance from uh from my point of view and uh we are using the D5 technology decentralized finances which uh use a decentralized computer such as ethereum which is accessible from anywhere and uh everything what is written which programs existing on this computer are kind of written in stone can only be changed and in the best case of course we have other other scenarios where people implement this D5 applications on based on Smart contracts and fully centralized Manner and control everything um but kind of uh good approaches to have fully permissionless and trustless implementation so which we have advantages of using defy that you own new crypto you don't trust anyone you keep your crypto on a hardware wallet on on maybe on the application on your smartphone um you you have really great transparency if you use a program like smart contract you can read the code of course if you don't understand maybe you can read the audience security audience which are mostly done for for the famous protocols out there we have some risks um based on the architecture of for example ethereum it's possible to first run people to sandwich them and to extract value from every trade what's happening right now and decentralized finances we have higher Network fees what we have seen previously 700 uh um gray on gas costs uh like day day ago it was really crazy um and we have of course smart contract tracks but still we have the opportunity to read these smart contracts instead compared to the centralized implementations we are nothing is transparent you don't you don't know what's what what is implemented there in the case of FTX they had own exception implemented that on the the daughter or yeah own company wouldn't be liquidated if something goes wrong in a small contract worlds you can verify everything this is this is really nice so today we have 50 billions of total value locked that means people provide liquidity to Smart contracts and these smart contracts offered to exchange one currency against another um we have daily Dex volume around three three billions of US Dollars and um the total trading volume in 2022 was about 1 trillion of US dollars but take a look here this is the market size gifa is very very small we have huge room to grow uh the uh the crypto Market the centralized crypto markets around 1 trillion and the traditional finances are around 500 trillion of US dollars so we have really huge opportunity to grow and to make this traditional Finance Financial system more efficient so what are decentralized exchanges um we have different approaches in G5 we have auto book based liquidity we have uh mm based So based on automated market makers which is a smart contract which use math bonding curve in terms of Unison for example they use specific bunny curve formula to ensure that liquid don't lost money if it trades in One Direction in the other direction so um we have limit auras against uh Market orders as well so you can create a limit order fully industrialized manner you can use Xerox you can use one inch limit order protocol as well um so that you just sell one asset against another you don't have to trust anyone except just the smart contract which is audited and you everyone can read it and verify that that you will get what you accept before trusting anyone um so we have a market ORS it's just the user Make a transaction and exchange on Unison for example or use an Aggregate and exchange on 10 liquid sources in in one single transaction um maybe yeah okay so auto book based Autobook based access um uh it's similar to centralized exchanges between fully digitalized manner the technology works with wallet signatures so it ensures that the user who owned the private key of the of the wallet really signed the order and offer uh to exchange one asset which they own in the wallet against another there are some protocols I already told zero X osis was also an on-chained but they switched to something else um and one inch limit or protocol for sure we have liquidity based access so it's to to it can the liquidity is to one or two pairs of tokens maybe three pairs depends on the protocol balances support a lot of uh tokens so you can just provide you 10 tokens into a liquidity protocol and just earn on on the trades on it um so we have curve for stable tokens it's kind of uh really good amount a next slide please um it's a good amount of protocols there um so if she became to come to the aggregation approach uh view from one inch we came to an idea how to execute in the best efficient manner by just aggregating the whole liquidity here um just um we wrote an algorithm which uh used multiple markets at the same time just imagine you have 10 millions of West loss you would like to buy a Tesla stock and you cannot go just to frankfurt's uh stock market and exchange to to exchange the 10 millions of West dose you will get maybe worse rate because they have not enough liquidity yeah so but it makes sense to split in small amounts and to exchange everywhere a little bit but not only on one market but also for for example if you have West doll like 10 millions of West dollars you exchange part in Euro Swiss franc a Singapore dollar and you go to different uh exchanges around the globe and exchange to Tesla stock this is what we do actually but on on blockchain in one single transaction fully atomically fully secured the user will get what they see and expect one on the next slide please so the art of aggregation uh this is actually mean cost Max law algorithm which we approach here uh find the best way through multiple liquidity Source on markets to um to to achieve the best execution ever so we have we have risk and Define um so the sandwich attacks this is huge problem right now if you go to UNI swap if you go to balancer to curve and if you do a transaction um which use higher amounts like for example like up from from 10 000 US Dollars uh you get front run someone come and extract value from your transaction because it's visible in a man pool which is the architecture of uh of of ethereum right now and other similar blockchains like minus matching as well um the attackers exchanged before you and exchange after you in the same block and extract value uh from your next slide please so um people lost one half billions of US Dollars and this is this is really crazy uh these are around 10 percentages of this all swaps uh I made in 2022 next slide please um I would like to talk about Dex user experience um next slide normally it looks like if you if you're not using aggregators uh you're you're looking for Dax you you need to spend time you need to find the the right decks which supports this token which you would like to sell or buy and then you need to compare all the rates and it takes time and money and yeah and you will potentially lost uh on execution as well so you connect your wallet you you you decide to exchange in this example someone got to 1 000 usdca airdrop and need to to sell it they need ethereum to to make the transaction because it transaction needs to be paid in ethereum or other similar blocks like vinyl smart chain and um of course they need to do kind of interaction with the smart contracts it's very annoying it's a terrible user experience and uh you get sandwich as well yeah because of the math Bots next slide please and we can tune new new kind of approach um we introduce one inch Fusion which we introduced it in December which solved a lot of problems it solved the meth math attack please next slide it's reduced the risk of bad execution it utilized the whole liquid in the market and um and it's introduced also new features multi-trading multi-thread trading and on a decentralized exchanges you don't have to wait for for the transaction of the first swap if you want to do the second swap so it's fully secretly executed since it's based on the limit order protocol and a specific Dutch auction one more slide I need one more minute so and this is how our Dutch auction is built it's a fully implemented in decentralized manner um there are some solutions out there right now but they use centralized entity to execute sending transactions um so and then try to achieve what what we achieved here uh in last December when we release it uh you this curve you see here this is the curve of the liquidity in the decentralized finance since our Pathfinder can recognize which liquidity is accessible for which rates we can create such a nice curve and make a limit order with the Dutch option um we are we sell on the first um three minutes uh based on the liquidity which is existing on the market by going from the best rate which you can get when you swap small amount to the rate when you swap the full amount for example if you're exchanging 1000 ethereum you get the price slippage maybe of 30 bips 0.3 percentages and two executed on the market makes no sense because you you you lost 30 bips right it makes sense to split it as well in small pieces and sell a little bit over time it's like future TC deal what's normally happening when someone sell huge amount of money or among a lot of centralized exchanges they sell it over time and we are doing this on blockchain fully permissionless trustless uh yeah High efficient thank you very much it's a pleasure to stay here yeah thanks thank you