Sergej Kunz - Unifying DeFi Liquidity - TOKEN2049 Dubai 2025

Today I'm going to speak about unifying defy liquidity. Web three is bigger than web two. Web two is more about sharing content, posting pictures, videos, sharing with friends, writing comments. Um, web three is about ownership that you own your assets. The goal of web three is also to achieve higher decentralization also in social social networks as well.

We we see multiple projects out there trying to build decentralized file storage decentralized CDN decentralized social social media social networks. So if you look back to the early days of internet and the adoption of internets and compare right now with the crypto adoption, we are right now in year 2001 and we have higher amount of bigger amount of users using crypto already. So what is this digitalized finances? Digitalized finance is a blockchain based system that automates financial transactions through smart contracts eliminating the need of intermediates. What it means is we have a digitalized computer with applications what um what everyone can use around the globe without asking for permission.

It's non- custody if it's not custody built. So you don't have to trust the third party and the intermediates to to uh perform financial transaction swap or even to borrow something. It's compossible. One was built on hackathon back in 2019 New York City over two sleepless nights. My personal sleepless record is 56 hours and we have built something on top of existing money legos we call it.

So we use unis swap we use banker we use kyber network. On top of this liquidity pools amms we have built something what we call aggregator. We unite the liquidity in one single chain. Back in 2019 we had only ethereum the smart contracts. So we united the liquidity and offered one single transaction to to get the best execution on the market on in this single chain.

This is this is the beauty of DeFi that it's composible. You can build always something on top of it and you don't need the API key for to interact with the smart contracts. Right now if you want to build application would like to interact with 10 banks or brokers. You need you need to sign a huge amount of documents. You need access.

You need API key. You need to interact with different endpoints. here seamless inside of the blockchain system you can interact with smart contracts. So it's globally accessible 24/7. So this nothing like what we see in the traditional finance over weekend.

You cannot sell your stock. Yeah. Because you need to buy your wife something. So you cannot even land and borrow something um if you if you need it. Yeah.

So there's no credit check. You you don't need also um money to open the account. You need just internet and you need a device. Then you can run a wallet non custody wallet for example for example one wallet. Uh so you can interact already with a 3M D5 composibility is is a key point of D5.

Why D5 became that famous? um because you can build build always something on top of it. So I already explained one was built on top of unis swap and other liquidity protocols. There are money markets for example where people build leverage tools to leverage position on money markets. Yeah liquid staking.

So they there's a normal staking someone built something what allows us to to trade uh stake tokens and you can also automate by using different protocols. You can do something what like automate some workflows. It's trustless. So you have no intermediates. You have no interprete.

You interact directly with your program and program will not be greedy will not run away with your funds. So you you don't have to trust it and most of the things what we see in D5 are non-custody means you don't need to deposit your funds. You don't need to trust someone. You interact with the smart contract in the interaction on the blockchain. It gives you what you expect in in in a form of swap.

You get directly in the transaction u this assets what you what you expected in the in the right amount. The future of of tra of uh trading is um 24/7 trustless self-custody trading also for securities also for tokenized real world assets this is the way uh what uh we we will go I'm pretty sure since something what is efficient will always be adopted so if you think about early days of internet like people said like who needs internet what is internet why we should use internet no one needs internet Uh and then it started to adopt more people start to use it. Onboarding became much easier and banks institutional started to adopt the internet and and computers and cloud computers. Yeah, of course they could stay with uh like taking orders on stock exchange on on the telephone. But internet is more efficient.

Same with crypto. Crypto is more efficient. If you look in our markets, what we have right now, um, we have different markets. We have 100 billion US dollar on value to total total value locked means someone provided liquidity, provided assets, tokenized assets like also stable coins or Ethereum or Bitcoin somewhere in the D5 protocols and we see 8 billion US dollar of volume. If you compare it to the crypto market, crypto market is centralized exchanges with around 500 million users with three trillion US crypto market capitalization and 140 billion US volume every day.

If you're looking into traditional market, it's much much bigger piece. 30 trillion of global equity market capitalization and 300 billion volume just on NASDAQ. So we have a room to grow. We at 1 in we are still with D5. Yeah we are still at the D5.

We started on D5. We we uh built the first kind of uh money Lego to to to adopt uh digitalized finances. But we are growing, we expanding. If you look into defy fragmentation, uh defy is distributed nowadays. Not just only on Ethereum, it's also on Salana, on Binance Smart Chain, on layer choose like arbitrum base.

It's also on polygon ton near it's on sui onto of course we have tron for most mostly used for USDT payments transfers but still there we have also some protocols if you look on a crypto fragment so the the bigger bigger markets so defi is really only small part of it it's a good part but it's still small part the biggest piece is bitcoin the most liquidity is right now in Bitcoin and we see all the institutionals buying buying Bitcoin. So take care that you get at least one Bitcoin because very very soon no one can afford to to buy one Bitcoin very very soon. We have XRP, we have Dodge, we have even Litecoin out there with some liquidity someone trades. So if you speak about 1 in and all the chains integrations. So we started 2019 with Ethereum.

Then the 2020 with BB been binance smart chain polygon arbitron came with optimism M21 layer 2 avalanchosis phantom zik sync 2023 base 2024 and bas is doing really great nowadays and linear 2025 and we are happy to announce salanon 1 in is the first protocol on salana Hana or offer intentbased swap. So you as a user, you don't take risks. You don't execute the transaction by yourself. You just declare what you want to achieve, what you want to get, what you want to sell. And our pro protocol ensures that your order is is sold on the best market conditions to arbitrators and market makers.

It comes with the math protection by design. So we we came to the idea already 2022 early 2022 and released the first version in December 2022 on Ethereum and Ethereum compatible chains. Actually I solved my personal problem. I got front run and sandwiched by some malicious actors on Ethereum. I lost couple of my Ethereum and I thought like I could use this Ethereum for my daughter and or buy my wife something and I thought it could be done better.

So we came together with my team and came to a solution what provides math protection by design. It's intentbased. You just declare what you want. It's not even a transaction on the EVM compatible chains. You just share a signature with the market makers on Salana.

You do in decentralized manner announcement of your order for a cost of less than $1 cents. It's gasless settlement. You don't pay for the transaction by yourself. The transaction costs are included in the rates and the liquidity comes across the entire market. So we have market maker arbitrage traders who pass uh KYB process on the one foundation to ensure that we have no malicious settlement actors who who would maybe work with dirty money.

So we have a compliance team who monitored as well this as well and remove market makers if someone get some dirty liquidity. So announcement on Salana of the order costs less than $1. It helps also in terms of movement into decentralization. So the user announce the intent on onchain. So everyone can see it and uh who who can participate in our ecosystem and can start the settlement.

The beauty of Solana is the fast block time and this helps us a lot here with this touch auction approach. So normal normal autobook approach on centralized exchanges, you have market makers who try to keep the spread tight, right? And some some companies pay these market makers to to provide liquidity on centralized exchanges. There are like 500 centralized exchanges around the globe and like to have liquidity everywhere, you need to to to have a lot of money, right? And this liquidity is deposited in the exchange and isolated in our in our system is um like it's a it's a marketplace.

Liquidity can be sourced from everywhere and our orders are sold to market makers um by a Dutch auction. It's a like market marketplace. So what we do our protocol start to sell the user order on the current spot price what you see on coin market cap. This is this line. Yeah.

And when you do the transaction by yourself and use an aggregator of what use multiple liquidity sources and generate one transaction for you and you execute it on the blockchain, you get this price. The difference between spot price and market price we call price impact. The liquidity is limited on each of the chains. So based on amount it can drop like this. This is the this is the price curve.

Some of our competitors are using Dutch auction with the linear interpolation of the of the price curve. We are using the current market rates. We have a pathfinder algorithm but know exactly what price you get for what amount. So the theory actually this picture I got by after a long discussion with a friend who pitched really crazy ideas something different. I got this picture in my mind.

I had also to think about long time. Then we I understood what it means. So we try to sell it over time. Just imagine 10 10 minutes and over 10 minutes we expect that market makers has have the opportunity to uh hatch on other sources like other networks, other like centralized exchanges as well. So here in this case, someone exchanged 12 million USDT to Ethereum and got $135,000 more.

This is one 911 for free. Yeah, just imagine because we offered to settle partially. So you see here one market maker settled at the beginning, the other directly after them. So this price curve is straight almost straight because there was not enough liquidity and here the liquidity dropped and we were able here to settle through market makers on a better rate than the user would get by doing it by themsel. So seamless crosschain experience Salana to other event compatible chains what we support will come very soon.

We are working on that. We are waiting for the security audits. Why Salana 800 billion US dollar trading volume in the last six months, 60 billion transactions, 7 billion TL and 360 active addresses. Try it out. Go to app.

wish.io and give us feedback. Thank you very much. It was pleasure to be here.