Conversation 1inch CEO: Mooniswap brings security and innovation

Original title: "DeFi way | exclusive conversation with 1inch CEO: security and innovation brought by Mooniswap"

Source: Babbitt

The decentralized exchange (DEX) is arguably one of the oldest DeFi applications. Curve, Balancer and Uniswap are currently the top three in the DEX market, with more than $1.6 billion locked up as of press time.

(Image: Defipulse)

DEX achieves a permless decentralized transaction, and users have their own private key, giving them a sense of security. However, since DeFi is still in its infancy, the diversified SELECTION of DEX also causes problems of liquidity diversification and insufficient trading depth. In order to find the lowest price sliding point, many times users need to switch multiple DEX, which will more or less bring some inconvenience.

To solve these problems, the 1inch was born. 1inch's convergent trading platform 1inch. Exchange can find the optimal trading path for users and simplify intelligent contract operation.

According to CoinGeck, 1inch has traded nearly $30 million in the past 24 hours, putting it in fifth place.

In the middle of this month, 1Inch announced $2.8m in funding, about the same time it announced the launch of its own centralised trading platform, Mooniswap. According to 1Inch officials:

"This new AMM DEX refines the design of Uniswap by redistributing some of the arbitrageurs' gains to the liquidity pool and protecting traders from preemptive trading attacks. Mooniswap is expected to generate 50 to 200 percent more revenue for liquidity providers than Uniswap V2, according to simulations."

Sergej Kunz, 1Inch'S CEO and co-founder, spoke exclusively to DeFi about Mooniswap.

The following is the full interview:

1. What is the difference between 1inch issued tokens and the existing DeFi platform?

Sergej Kunz: Since its inception, 1Inch has focused on decentralized and permission-free network operations. We looked at several methods and designs, and came up with a design we're very proud of -- the 1inch online token.

The security provided by this token model is critical to the further success of the DeFi ecosystem. More specifically, 1INCH tokens make participating agreements safer and bring future innovations.

The 1INCH token is not an investment, but a tool that helps us build decentralized, permission-free networks.

Holders of 1INCH tokens should interact with the agreement in some way, commit to the future development of the agreement, and have a sense of responsibility and belonging to the 1INCH community.

The 1INCH is a utility token that serves several network requirements:

Ensure permission-free interactions with the protocol; To further develop the ecology and protect the safety of funds; Incentives to participate in the governance of specific network functions (still under consideration); Pledge funds for cyber security.

2. As mentioned on 1Inch's blog, Mooniswap LP can make profits from price slippage. Could you briefly explain the principle?

Sergej Kunz: Due to the existence of price sliding point, users will lose a large amount of money, which will be in the hands of arbitragers. When a user is exchanging a large number of tokens, the price slip can cause him to lose at least 2% of his capital (no limit). To solve this problem, 1Inch gives five minutes during which the arbitrageurs' exchange rates improve after each trade has slipped and they can profit from a reverse auction.

Mooniswap, 1Inch's automated market-maker, ameliorated the problem of volatile losses by providing LP income while reducing arbitrageurs' income.

In addition, Mooniswap handles a pretrade attack, in which a malicious node confirms its own transaction before it is broadcast but has not yet completed. The malicious nodes then make a profit by selling at a better price after the user trades.

3. Along with Mooniswap came VWAP, a price predicting machine. The Compound has also announced the release of the Open Price Feed. What does it mean to you guys to use your own predictive machine? Will there be a similar trend in the future, with large Numbers of DeFi platforms turning on their own prognostics?

Sergej Kunz: the 1Inch team launches the first VWAP (volume weighted average price) predictor in the chain. Mooniswap's unique architecture makes this type of predictive machine infrastructure possible. According to our analysis and that of other industry leaders, VWAP is the best predictor infrastructure in the DeFi ecosystem. VWAP is less susceptible to manipulation and more sensitive to rapid price changes. These features make VWAP a clear choice.

We need prophetic machines to achieve further innovation of 1inch. The existing predictive machine infrastructure in the market prior to VWAP was not good enough for our future products.

4. Please briefly introduce the algorithm principle of 1inch trading path. How does 1inch find the optimal trading path and what is the biggest difference from other DEX aggregators?

Sergej Kunz: our team is about to release a brand new algorithm that USES 1inch APl to respond in less than a second, find the best trading path, and integrate on the B side for free.

1Inch will continue to optimize the aggregator'S API and integrate revolutionary technologies such as DeFi and blockchain.

The key differences between 1INCH and other DEX aggregators are: The unique algorithm USES smart contract technology to break down a single transaction into multiple DEX -- making it easier for users to optimize and customize trades; Sufficient sources of liquidity; Gas and transaction costs determine the best trading path; Chi Gas tokens will reduce transaction costs by 1inch.

5. For small traders, is the value of one inch limited to being used as a "price comparison tool"? Is it possible in the future to provide more value and better serve small traders?

Sergej Kunz: We are working on a solution that reduces aggregation costs and reduces the cost of small transactions through direct liquidity sources.

6. Can you share the business model of 1inch? What's new with the plan to issue the protocol native notes?

Sergej KunzMooniswap is important because we make money based on volume. Other AMMs are not profitable based on volume. Any project that integrates Mooniswap can make money from user transactions. This is disruptive for DeFi.

With the introduction of 1Inch tokens, we plan to encourage people to provide liquidity on Mooniswap.

7. Yam's recent meltdown has not actually been code-audited, but there are still people out there putting billions of dollars on the basis, leading to the rebasing loophole. What do you think of The Yam project? Worried about the madness in DeFi today?

Sergej KunzWe attach great importance to auditing. Since SOME of DeFi's products continue to give crazy APR (annualized), we think users should let themselves know what they plan to use rather than invest money in technologies they don't understand.

But of course, there will always be those who are less concerned about security and stability.

8. DeFi's mania also causes some thinking, with Ethereum Gas hitting new highs and intelligent contract security concerns, DeFi could become a whale's game:

(1) To solve the problem of high price of Ethereum Gas, 1inch once proposed Chi Gas token. How has it been applied so far? How to solve this problem thoroughly?

Sergej Kunz: Chi Gas token is ERC-20 token, which is used in 1inch.exchange for the refund of part of the transaction cost.

This token is similar to the GasToken concept, but the 1Inch team has made some improvements. Chi's price is dependent on, but not linked to, the ethereum network's gas price. When gas prices are low, Chi prices are low, and vice versa.

"Chi", like "GasToken", are gas tokens on Ethereum. The difference between Chi and GasToken is efficiency and execution detail -- Chi is the more efficient version of GasToken and only deployed at 1inch. Chi tokens can be used to adjust high gas prices, to produce (or buy) them when gas prices are low, and to destroy (or sell) them when oil prices are high.

(2) With the fire of DeFi, the security of intelligent contracts will be the focus of future development, especially for aggregated trading platforms like 1Inch. Intelligent contracts will be more complex, and how to minimize the risks of intelligent contracts.

Sergej Kunz: There are several intelligent contract design primitives that may introduce additional risks. Risks that need to be avoided or properly addressed are:

1) Upgrade function;

2) Administrator key;

3) Delegate invocation -- this means that your smart contract can use logic from external contracts;

4) Reentrancy -- one smart contract invokes another smart contract and ensures that the smart contract is not invoked again.

(3) In the Curve initial flow mining just past, 20 giant whale addresses received nearly half of the CRV award. DeFi is the whale's game. How do I ensure that DeFi applications achieve maximum fairness? What plans does 1Inch have for this?

Sergej Kunz: The distribution of CRV tokens can be considered fair if the whales involved were not aware of the reward before the news became public. In December 2019, Anton Bukov, 1Inch's CTO, drew up a smart contract for fair reward distribution, which is used by many different projects, including Synthetix, YFI and YAM.

For example, if you put money in Uniswap in exchange for certain smart contract tokens, you can get a reward for putting those tokens in. The efficiency of GAS does not depend on the number of participants. If you intend to distribute the rewards to Uniswap's liquidity providers, you can achieve fair distribution through this smart contract.

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