Centralized cryptocurrency exchanges may become relics of the past within the next decade, with decentralized finance (DeFi) aggregators poised to take their place, according to Sergej Kunz, co-founder of 1inch. Kunz envisions a future where exchanges gradually transform into frontends for decentralized exchanges (DEXs). He estimates this transition will occur over the next five to ten years.
Kunz argues that centralized exchanges function as isolated markets, while 1inch and similar aggregators operate as global liquidity hubs. His prediction comes on the heels of 1inch's recent partnership with Coinbase, a major U.S. crypto exchange, to integrate its service and offer DEX trading to Coinbase users. Kunz believes that centralized exchanges' investments in on-chain systems demonstrate their awareness that their existing technology may not be sustainable in the long run due to the rise of decentralized exchanges and digitalized finance. He suggests that these exchanges are proactively adopting new technologies to avoid being left behind and to empower the broader financial industry.
1inch has shifted its business model to become a DeFi infrastructure provider, focusing on providing access to other businesses. As part of this transition, 1inch aims to facilitate the adoption of non-custodial swaps by major centralized exchanges and wallets, including Binance, Coinbase, Ledger, MetaMask, and Trust Wallet. Kunz stated that the company has unified its products into a single application programming interface (API) for developers. He also noted that the majority of the platform's business now comes through API integrations rather than its own front end, a trend that has persisted for about a year.
Notably, the European Central Bank (ECB) has selected technology partners for the digital euro, with a potential launch in 2029. Furthermore, Bitcoin has recently surpassed $120,000 for the first time since August, indicating a potential new accumulation phase as long-term selling cools and short-term holders stabilize.
