13 November 2020
Anton Bukov | k06a.eth joined group by link from Group
C
06:38
Crypto AMA Bot
k06aa, let's jungle boogie.
SN
06:39
Spencer Noon
Welcome @k06aa, excited to host you at 1pm EST!

Everyone, make sure to tune in 🍿
AB
06:39
Anton Bukov | k06a.eth
In reply to this message
Hi πŸ‘‹
SN
09:19
Spencer Noon
T minus 40 minutes!
SN
09:52
Spencer Noon
10 minute warning! 🚨
10:00
Alright folks, let's do this.
10:01
@k06aa ready? Welcome to Crypto AMA! Could you start off by giving us a brief bio on your background as well as how you got started in crypto? And then a short overview of 1inch and a brief update on your progress to date? We’ll then be off to the races with questions.
AB
10:04
Anton Bukov | k06a.eth
In reply to this message
Hi, I am definitely ready! I am 1inch co-founder and CTO, came to blockchain development 3-4 year ago, worked for Near on Rainbow Bridge and for some other projects. Short overview of 1inch is: aggregator which combined Ethereum DEXes into single huge DEX with enourmous liquidity.
10:05
Recenty 1inch crossed $5b in total volume, with 30k users who did 300k swaps πŸ™‚
DV
10:06
Daniel Vogel
Amazing to have you @k06aa !

Love the work you’re doing!

Question: what’s the hardest part about marketing a DeFi product?
SN
10:06
Spencer Noon
Thanks @k06aa! Let's dive into questions folks, starting with @vogelito.
10:09
@k06aa afterwards, can you talk about the origin story and long-term vision for 1inch? I'm curious why you're building 1inch and where it's headed.
AB
10:09
Anton Bukov | k06a.eth
In reply to this message
We found out that shipping frequently and announcing instantly somehow worked for us at early stages 😊
10:12
In reply to this message
We build very first version of 1inch on the ETHNewYork hackathon within 48 hours. If was just splitting volume among Uniswap, Bancor, Kyber. RN we have much more advanced algo, which involves analysis of hundreds different DEXes, since very liquidity pool is a separate DEX. So 1inch is ultimate DEX and DeFi aggregator and some additional protocols like Mooniswap AMM – highly profittable liquidity protocol, who prevents arb traders from earning most of the profits 😁
SN
10:14
Spencer Noon
Gotcha. So let's dig into that a little more. Can you ELI5 how that analysis of hundreds of DEXs works?
AB
10:17
Anton Bukov | k06a.eth
In reply to this message
The more you swap on each DEX the worse is the exchange rate. So we are trying to distribute user fund among different DEXes in a smart way. We analyze each piece of the liquidity also taking gas fees into account and build multi-path route to have a minimal slippage.
10:17
Example of multi-path route, from one of my slides πŸ‘Œ
W
10:19
William Phan
how do limit orders on 1inch compare to others like matcha or 0x mesh? Does 1inch act as the otherside of all limit orders placed through?
AB
10:20
Anton Bukov | k06a.eth
One more illustration πŸ€—
10:21
In reply to this message
RN 1inch uses 0x Mesh for creating limit orders, but we have plans on innovations in this area.
SN
10:22
Spencer Noon
Right now there are a number of competing DEX aggregators - it feels like they all say they have the best prices πŸ˜„
10:23
Can you address the "price wars" that we're seeing? Does everyone have the same price? If not, why?
W
10:23
William Phan
i noticed that too 😊
SN
10:23
Spencer Noon
All of this code is open source too - is everyone just going to copy each other over time?
AB
10:25
Anton Bukov | k06a.eth
In reply to this message
We invented the DEX aggregation and gonna continue innovate to have the same unreachable results. Now we see some competitors have tech we already had almost 1 year ago. And one of the most promising competitors of 1inch is Totle TBH
SN
10:27
Spencer Noon
Can you give us some examples?
10:27
"competitors have tech we already had almost 1 year ago"
10:28
My general thoughts from reading this market is that participants are not aware of everything that goes into 1inch tech, or any aggregators for that matter.
AB
10:28
Anton Bukov | k06a.eth
In reply to this message
It is really hard to compare aggregators transactions, since Ethereum nodes can only estimate GAS_LIMIT of the transaction, but not a GAS_USED. Which actually can be different for dozens of percents. Especially after the Istanbul Ethereum hardfork. But 1inch is carefully taking gas fees into account. Sometimes it is better to spend $10 more on the fees to get $15 more result for example
10:29
In reply to this message
Most of the code related to building routes is not opensource. Smart contracts are opensource for sure.
SN
10:29
Spencer Noon
Interesting...
AB
10:30
Anton Bukov | k06a.eth
In reply to this message
Some of competitors have simple splits across DEXes, it is not even close to multi-path routes.
SN
10:30
Spencer Noon
Hmm can you explain this more^
10:30
What's the difference between simple splits and multi-path?
AB
10:32
Anton Bukov | k06a.eth
In reply to this message
ELI5: Imagine you have token A with high liquidity to ETH and token B with high liquidity to DAI, swapping A to B with splitting will never give you great result same as route: A -> ETH -> DAI -> B, plus with splitting on each step πŸ™‚
10:34
In reply to this message
We are trying to educate people about our techologies, see for example this blogpost: https://1inch-exchange.medium.com/introducing-1inch-v2-defis-fastest-and-most-advanced-aggregation-protocol-c42573dc3f85
SN
10:34
Spencer Noon
Got it. Helpful, thanks!
10:35
Can you talk about your off-chain liquidity? How does that work?
AB
10:37
Anton Bukov | k06a.eth
In reply to this message
ELI5: on-chain liquidity could be discovered from smart contract, off-chain liquidity could be discovered only with external software. Both liquidity could be then accessed via smart contract, the difference is only in discovering. Since our algo works off-chain it aggregate among both on-chain and off-chain liquidity.
SN
10:39
Spencer Noon
Who is providing off-chain liquidity today? And if off-chain liquidity is discovered with a better price than on-chain liquidity, what happens?
ND
10:41
Nick DeBontin
What is 1inch's business model?
AB
10:41
Anton Bukov | k06a.eth
In reply to this message
I believe AirSwap and 0x are providing off-chain liquidity, but for aggregator it makes no sense is liquidity on-chain or off-chain. Off-chain protocol allows market makers to wokr more efficiently than on on-chain, because on-chain require pay gas for each interaction.
JM
10:42
Jonathan Marcus
In reply to this message
And I guess following up on Nick's question, someone on Twitter highlighted that 1inch was profiting from slippage or expected slippage. Is this true or fake news?
10:43
I'm not trying to be confrontational or provocative.
AB
10:43
Anton Bukov | k06a.eth
In reply to this message
1inch is getting paid by some DEXes. Simply: some DEXes get fees and share part of them for the volume provider. For example Mooniswap shares part of the LP earning with referral/volume-provide.
JM
10:43
Jonathan Marcus
In reply to this message
But you operate Mooniswap, right?
AB
10:44
Anton Bukov | k06a.eth
In reply to this message
It is permittionless protocol, Ethereum miners is operating it πŸ˜‚
I
10:44
Ismail
Hey Anton - thanks for tackling questions today. Can you pls share your thoughts on how EIP-1559 might impact 1inch's value prop?
JM
10:44
Jonathan Marcus
In reply to this message
Sure, but did the ETH miners make the decision to pay 1inch a part of the Mooniswap fees?
JH
10:45
Jared Hedglin
Also, why did you build Mooniswap? Can you talk about your long term plans for it? Will you build other AMMs too?
AB
10:47
Anton Bukov | k06a.eth
In reply to this message
I hope this would help, because gas fees are rn higher than it could be because of wallets gas estimation implementation.

ELI5: EIP-1559 proposes implicit gas prices for transactions instead of explicit. Simply: you will select you wanna cheap of fast transaction and the fair gas price will be determined by deterministic algo on the miner.
SN
10:48
Spencer Noon
How do mempool shenanigans (e.g. front running) affect 1inch today? How do you see them affecting 1inch in the future?
AB
10:48
Anton Bukov | k06a.eth
In reply to this message
Users who swap on mooniswap pay gas fee to miners and they have some exchange rate including fees for LPs, and then LPs profits are optionally charged for referrral/volume-provider fees.
SN
10:48
Spencer Noon
What % of 1inch orders are frontrun?
AB
10:50
Anton Bukov | k06a.eth
In reply to this message
We found out that arb traders earns on uniswap much more than LPs and we decided to fix this. Arb opportunity opens gradually and arb traders earn a bit, but most of the profits from trading slippages are accumulated by LPs.
10:51
In reply to this message
We fight with FR by setting low max-price-impact/max-possible-slippage allowed. There is a trade off, the less is allowed - the higher risk of failed transaction. The more is allowed - the higher risk to be front-runned.
10:51
In reply to this message
It is not that easy to compute, but we are doing our best on on-chain stats. For those who not saw, we have built an opensource dashboard with metrics: duneanalytics.com/1inch
Alex W joined group by link from Group
C
10:52
Crypto AMA Bot
Oo ya, AlexW17. We up in this!
AB
10:53
Anton Bukov | k06a.eth
Wanna hear about our tx failure rate improvement? 😁
SN
10:53
Spencer Noon
def
10:55
We dramatically decreased fail tx ratio by enabling partial fills option by default. So you swap could be partially executed when some routes failed instead of fully reverted tx.
SN
10:56
Spencer Noon
πŸ”₯
10:56
What is 1inch's token strategy?
JH
10:58
Jared Hedglin
What’s your most requested feature right now? Also, would you ever be able to add additional order types?
AB
10:59
Anton Bukov | k06a.eth
In reply to this message
1inch is working in this direction, but it involves releases of not yet ready and even not yet announced products of 1inch πŸ˜‰
10:59
In reply to this message
We are gonna release API v2 asap (1-2 days) and Limit Orders very soon.
11:00
We are also thinking about decentralized stop-loss and take-profit orders, which are not exist yet πŸ™‚
SN
11:03
Spencer Noon
That's cool
11:04
For those who might not be aware, can you explain how Mooniswap works and how it's performing today on 1inch?
11:08
20 minute warning folks! Get those questions in.
AB
11:08
Anton Bukov | k06a.eth
In reply to this message
Sure, it was really cool idea. Simply: on uniswap when someone swap it changes prices on pool and immediatelly improve price in opposite direction. If you swapped $1k and lost $20 on the slippage, fastest arb trader will bet this $20 profit. We decided not to improve priced in opposite direction immediatelly, but to impre prices gradually. High competition between arb traders do not allow them to wait until high profit and they earn a bit by rebalancing pool and keeping most of the slippage inside the pool for the LPs.
11:09
In reply to this message
One more real route example from 1inch v2 UI 😊
11:11
In reply to this message
The comparison of some Uniswap and Mooniswap pools
11:12
And the chart from Mooniswap whitepaper describing how invariant grows during arb trades.
Noah Jessop joined group by link from Group
C
11:12
Crypto AMA Bot
Number go up!
SN
11:14
Spencer Noon
Gotcha, this is cool. Who do you see as your biggest competitor(s)?
11:15
Seperately -- what are 1inch's network effects?
AB
11:18
Anton Bukov | k06a.eth
In reply to this message
We do not like to call it a competition because we are all growing and trying to capture CEX users to decentralize space. It seems Totle is one of the most experienced aggregators with integrations and traction. It seems they were the first who started aggregation in early 2018, but we somehow were not aware of them when we started.
11:24
In reply to this message
The more people use aggregators – the more fair volumes distribution will market have. This would allow AMMs and other liquidity protocols to compete on a next level. We see the more value and power people get from 1inch the more they spread about 1inch. We estimated Mooniswap LP roi is much higher than other AMMs but when competitors get 10x more volume (not fair relatively to their liquidity and prices) – their roi is doing great for no tech/math reason.
SN
11:24
Spencer Noon
Gotcha. Last question (unless anyone has others)
11:25
Why does Uniswap get so much volume?
AB
11:27
Anton Bukov | k06a.eth
In reply to this message
Rn we see Uniswap have 30k users/wallets daily (5k new users/wallets every day). This is far far bigger any other DEX have. But market is always aiming to efficiency, their users will aware of other DEXes and aggregators sometime.
11:27
11:27
11:29
^^ Some insights on "DEX users/wallets" and "New Uniswap users/wallets"
SN
11:29
Spencer Noon
In reply to this message
What do these labels mean?
AB
11:30
Anton Bukov | k06a.eth
In reply to this message
oneshot - made only 1 DEX swap
virgin - use only Uniswap
exported - came to Uniswap but tried other DEXes
imported - came from other DEXes
SN
11:30
Spencer Noon
thanks
11:31
Alright Anton, that's all the time we have for today. Thanks a lot for coming on and providing so many great answers πŸ”₯
JK
11:31
Jon Kol
In reply to this message
This is great thank you Anton
AB
11:31
Anton Bukov | k06a.eth
In reply to this message
Thank you for hosting me!
SN
11:31
Spencer Noon
2x parting questions:

1. Best way to stay up to date on all things 1inch?
2. Best way to get in touch?
AB
11:33
Anton Bukov | k06a.eth
In reply to this message
SN
11:33
Spencer Noon
Sweet. Thanks again!
11:33
Until next time folks ✌️
AB
11:33
Anton Bukov | k06a.eth
In reply to this message