GRTiQ Podcast: 94 Sergej Kunz

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Sergej Kunz (00:14):

But one guy said, “This is next big thing, this was the organizer of ETHGlobal. He said this is next big thing, and I said, “Okay.”

Nick (00:59):

Welcome to the GRTiQ Podcast. Today I’m speaking with Sergej Kunz, co-founder of 1inch Network, a leading DeFi solution and exchange aggregator that scans decentralized exchanges to find the lowest cryptocurrency prices for traders. As you’re about to hear, Sergej is a remarkable person. Like many other guests of the podcast, Sergej’s story is another example of someone who overcame many obstacles to become what they are today. Sergej is equal parts brilliant and incredibly hardworking.

(01:29):

During this interview, Sergej talks about his background, how he became interested in crypto, the origins of 1inch Network and how it works, how 1inch uses The Graph, and his perspective on the future of DeFi and web3. As always, we started the conversation by talking about Sergej’s educational background.

Sergej Kunz (01:50):

Yeah, I have no degrees, maybe a very important thing. I was born in Russia and moved at age 12 to Germany, and grew up here. And I started, it’s not a degree, it’s like you learn a profession. It’s like I learned how to develop software. I was a software developer, “softwareentwickler” in German.

(02:17):

That was kind of enough for me to just work for different startups. Of course some of these other companies, consulting companies, they were looking for someone with degrees. But I proved myself very fast that actually I’m better than others, because I’m spending time after the work. Normally I spend time, my free time to develop myself, teach myself, learn new things. This is kind of my background.

(02:49):

I miss high mathematic understanding. Because I recognize that I can write algorithms and I can use already existing algorithms, but I need to understand them, and I need to understand a lot of things. That’s why, guys, if you are still studying, don’t break. Learn enough at least to write proper algorithms to change the world.

Nick (03:17):

As you mentioned there, you got started early on outside of a formal education programming, and you did this when you were quite young. What was the draw for you? What was it about programming and learning this type of thing that excited you as a young person?

Sergej Kunz (03:33):

The first time when I was thinking about computer, it was in Russia. In deep Siberia I found a book where I was reading about the computer, how it works. And we had nothing there. We had no PCs there. We had no pizza there. No pizza. We didn’t see pizza at all. Such small things were not existing there, because it was like the deepest, deepest Siberia.

(04:06):

And I read about the computer, about also how videos would work theoretically for really old books, and how a CD would work theoretically. Because practically they didn’t implement it yet. And when we moved to Germany and I got my first computer, what I first did, I reassembled it and put it again together to understand how it works. After that I started to think about, “Okay, I can do more than playing games,” and anyway, playing games was terrible on the PC because it was a cheap one. My cousins, my friends were playing games like Diablo, but I couldn’t because my PC was slow.

(04:54):

I thought, “What I can do else with that?” And the teacher in my school, they told us in a computer session that building websites is very complicated, and he didn’t think that any one of us in any time of our life can do it. I have seen it as kind of a competition. I spent a little bit of time in the library because I had no internet for a very long time. So, I had to copy information through discs, and I studied at home how to program with JavaScript, with PHP, with html. And half a year later I came to the teacher and told them, “Look, I know how to write websites. Here’s my website.” So, it was kind of the start of my story.

Nick (05:51):

That story about you getting your first computer, disassembling it, and then resembling it to learn how it works, it’s almost like an early indication of how you approach things in your life. Is that true? Are you that type of person that to understand things, you go to that level of detail to disassembling and reassembling?

Sergej Kunz (06:09):

Yes, yes. Also when I was really small, I reassembled all my tools to understand how that works. My parents were really angry about that because I broke everything, but it was interesting to understand how this works.

(06:28):

It’s also not only right now about software. I also try to understand everything. If it’s something happening, I would like to try and understand: What is behind that? If someone is kind of angry to me, I try to understand why, what I did wrong or why this person is acting like that. So yeah, this is kind of the approach of how I do.

Nick (06:55):

So, after you created this website and probably stunned your teacher, one of the first things you did formally as a programmer was create a text messaging aggregation system, which again is a huge, incredible task. What can you share about that early product and what you did there?

Sergej Kunz (07:11):

I started 2007 with some freelancer jobs. I built some websites in Perl. I was still learning my profession, and one day I came to my boss and said, “I have an idea, and if you support me, I can organize more earning for you and some additional earning for me.” Because I am a poor student. I earned like 400 euros a month, and had to travel 100 kilometers every day, and to the school 150 kilometers every day. So, it was terrible.

(07:46):

And I had at the end of the month nothing. So, I couldn’t buy new clothes, and that’s why I had the idea. My boss had an online shop, like a web shop. He sold mobile phones with contracts in Germany, and bundles. They sold two cheap mobile phones, two contracts, and the PlayStation 1, or PlayStation 2 or whatever they had.

(08:12):

I told him, “I would like to rebrand it. I call it Russian Mobile.” Terrible name now, but it was funny. And we had in Germany, before Facebook, a lot of people using small social networks. Also, these German Russians who came from Russia, who are basically Germans like me … I have my German roots, who came to Russia 1800-something. So, they wanted to stay under each other. No one just married German people directly. They normally married Russian Germans if they were Russian Germans.

(08:56):

And I just promoted this online shop, which I rebranded all the processes, buying, contracting. It happened through my boss, and I just did some promotion. These were kind of my first steps, and one day I recognized I can build something for … I guess one customer which I had wanted to have SMS signing, like bulk-signing SMS. And I built small software for it, and I thought, “Why not offer it to everyone?” So, I built actually an aggregator for telecommunications services for signing bulk SMS and also stream SMS.

(09:38):

Around the globe, I have a lot of providers similar to what we have right now. We have a lot of integrations right now in 1inch. I had also a lot of integrations around the globe, and a small algorithm to decide to use the best routes. So, these was were kind of the first steps.

Nick (09:55):

What did you learn about business or entrepreneurship by virtue of that? It seems to me that this was maybe one of your first experiences of having a vision and creating something. Did you get the bug to be an entrepreneur that kind of carries with you today?

Sergej Kunz (10:09):

It was helpful. I learned how to sell something. So, I sold to much bigger companies. I was a one-man show, and I sold a service to bigger companies, and bought somewhere, and sold somewhere, and worked in between a little bit. So, it was funny. It was really helpful. So, I understood how to sell something.

Nick (12:03):

Before I ask you about Maicom, I want to ask you about failure. A lot of people wouldn’t be doing a lot of things you’ve shared so far in your personal story, right? About getting their hands on a computer, taking it apart, putting it back together, having a teacher say building a website’s difficult and then going home and learning how to do it. And then what you did here as a programmer with this messaging, are you not afraid of failure? Are you attracted to taking risks? How do you think through that?

Sergej Kunz (12:30):

So I didn’t took risks. I would say I was staying two, three years in a company and after I reached a specific level, salary level for example and also learning level or there was nothing to learn from me anymore, I switched to another company. Of course I had some risks in terms of I’m switching to another company and they eventually would remove me, fire me after three months. This was the case here in Stuttgart. When I moved from Forest to Stuttgart to a bigger city, the boss asked me actually why I am that crazy and just get a flat in the city and moved to the city and work because it was really risky. One of those guys who was working with me, he went to the boss and thought he would go if I wouldn’t go. Because he was feeling that I’m attacking him by shipping like a beast, because it was very important for me to deliver fast with high quality to prove that I’m in the right place.

(13:48):

For me it was kind of huge jump to move to the big city from the black forest. And some guys were not happy because I delivered a base, five man team worked over time. They worked normally like eight hours. I worked like 10 hours at least. I wasn’t paid for this, it was included. So there was a case, I worked two days a piece. I didn’t sleep at all, just two days without leaving the office. I got the food, my colleagues organized beer, food and whatever, what we needed. And I had like one of my colleagues, joined also this opportunity. Because we had to deliver something for LG, and it was already late and we just finalized everything in hackathon manner, delivered it. And some people are upset because other people are better than they and more committed.

Nick (14:53):

The next thing you did was in 2015, you started working on Maicom. What was that and what did you work on there?

Sergej Kunz (15:00):

So yeah I had to switch from a commerce connector. It was actually product aggregator. So again, my aggregation experience, I had to switch because I was mopped by my boss, not boss of the company, by my team boss. It was difficult time. I lost my kind of eagerness or how they call it. I was not hungry anymore. I was damaged, kind of. I was mopped all the time and I didn’t earn actually a lot. But I proved multiple times that I can deliver. But if you get mopped by boss, it’s really problematical. It’s also one of the experience for me how to work with other people, that mopping is not the solution at all.

(15:57):

So I switched to agency, I learned a lot also in an agency before Maicom. It was cap talk communication, something like that. They had a technical CCQO, technical guy who teach me a lot with Docker. Docker and based on this knowledge, and some additional work at home on Java, I got the job on Maicom. After five interviews, they were still not sure about me because I had no degrees. But I’ve proved very fast in one and a half years I became one of the best guys in the company.

Nick (16:39):

One of the things you did there was you worked on some huge projects, right? You worked with Porsche for example. What did you do for Porsche? That seems like a fun company to do some work for.

Sergej Kunz (16:47):

Yeah, before Porsche I had some jobs, some consulting projects in US. One of them was Porsche, Siemens and then we came to the Porsche. They were looking for a DevOps engineer, and I had actually good amount of experience, but not the best I would say. And as soon I started at Porsche, they started to change insights. They have this traditional world of Porsche and they have the new world which was created actually in the time when I joined. It was really cool to see the change inside of such a big company, how you can optimize a lot of things with agile approaches. I learned a lot there, and I improved my DevOps skills very fast. Did a lot of work at home as well, again, and also pushed forward a lot of topics inside. And then I switched to being external to internal, Porsche kind of…

(17:53):

Yeah. I got the job there internally so I was [inaudible 00:17:58]. I’m still feeling, we call us [inaudible 00:18:01] and I like hematology of Porsche. If you don’t find something, what you’re looking for, just built by yourself. It’s actually how the first Porsche was built by, Ferdinand Porsche. He was looking for a car and he didn’t find it, and he just built by himself. And so new innovation was created, and new standards were created. And the same happened actually with 1inch as well. So I follow this mentality as well. If I don’t find something Anton as well. If you don’t find something you build yourself.

Nick (18:32):

So when then do you become aware of crypto? As I listen to your story, you seem like somebody who’s very capable. You’re finding success at every job you work at, becoming a high performer. At some point you become aware of crypto and that piece of information changes the future of your life. When was that?

Sergej Kunz (18:49):

The first time? My first touch points were 2011. My colleague on the product aggregator, commercial connected, actually this guy who start to mopping me, at the beginning we were almost best friends I would say. We shipped together like beasts, and one day he changed when he became my boss. And he showed me about light coin mining and my boss, the company, owner, they explained also they bought some Bitcoin and sold them too early. I played a little bit around with that and I forgot about this, because I didn’t see something huge on that. When I have seen on YouTube a guy who built a mining rig for Ethereum, and I recognized that actually Ethereum is a virtual machine. Decentralized computer around the globe it changed. So I got the feeling this is the next big thing. This is the future, and I started to… First I did some mining and then one day I started my YouTube channel “Crypto Maniac”. Why mining? Because you see, my commitment is normally at least 100 percentages, at least. If I do something then it’s normally like 200 percentages.

(20:22):

I started to talk about crypto, doing some beer drinking sessions on Fridays. It was funny. And I have seen Ponzi scheme promoting on YouTube, and I tried to explain people to not invest in Ponzi schemes. I started to explain, they say it’s safe and it’s on smart contracts, but it’s not safe because smart contracts are programs. So you can read these programs and there was no code. I tried to decompile it and then join the call. He asks to, because he was watching me, and he said he has the experience and we tried to decompile together, and to try to understand what’s happening inside. And based on this stream, the Ponzi scheme published a smart contract code to prove that they’re fine and they’re not Ponzi or whatever. And we did audit of it. And after that, we had just spent half of year of our life to audit all other projects which came, and to explain people to not invest.

(21:23):

In some Ponzi schemes there should be for example, there shouldn’t be an owner and shouldn’t have a Ponzi scheme where you invest and you profit from other people who come after you. And this was kind of our time on YouTube. We streamed like eight hours a piece, sometimes, until morning. And after a couple of hours I had to go to my work and still performed. So less sleep means not you are bad in delivery. You are more creative, and you are doing more efficient from my point of view if you sleep less. So my first one half years with 1inch project, also like three, four hours sleep a night. As similar to you Anton. But you’re more creative. So also in the hackathon, if you don’t sleep, of course after let’s just say like 28 hours, your body says “I need to sleep, I need to warm up”, and to warm up you it’s enough like to 50 minutes, eyes closed. And after 50 minutes, if you wake up, maybe one hour maximum you are ready again.

Nick (22:43):

I wanted to ask you about Ethereum. That was the light bulb moment for you. You said that you saw immediately in it that this was the future. Can you explain that a little bit more? It’s a theme that’s come up on the podcast multiple times where people become a acquainted with crypto, they learn about Bitcoin, but they don’t get the conviction for what’s happening in crypto and web3 Until they learn more about Ethereum. Explain that. What happened for you?

Sergej Kunz (23:08):

So what the school in Ethereum is that you can build digital applications. Means of course, you need piece of software which you need to start somewhere, like a client. But you can execute anything, you can be on the moon and you can still, if you have internet connection, you can still do something. Just imagine if Elon Musk create a colony on Mars, and the Mars need to send money to Earth. They would use Ethereum because it’s trustless yeah? Trustless and permission-less. So you don’t have to trust any person, just the code. And I like this idea. So people around the globe can build applications, deploy the application, execute the applications, and applications can be compostable. The one application can use the other application. We have this approach in the traditional world in terms of microservices for example, like Amazon or Google. They’re building a lot of services and they’re actually, behind these services are microservices. Small service, which does just one small thing. And this is an approach also for Ethereum, we have decentralized computer.

Nick (24:33):

You mentioned Anton there in one of your prior answers of course. Anton, for listeners that don’t know his co-founder of 1inch, you two work together to come up with the idea of 1inch. For listeners that don’t know what 1inch is, describe what it is and how it works.

Sergej Kunz (24:49):

So it’s a little bit difficult. We started with just aggregation on the… We came to the idea on hackathon how to build application which execute for the best rate on the market as swap. Yeah. So you come with one token and exchange for another token by using multiple liquidity sources and splitting between them. Because it makes no sense to go to one exchange and exchange everything there. For example, 1 million of dollars, because the rate depends on the amount you exchange. So we came today did just to split it small pieces and exchange everywhere a little bit. So it’s actually arbitrage among sources. And it was easy to build on Ethereum because every service is compossible. Now almost every new store banker what was there. Nowadays we are more, and nowadays we have more complex algorithm. We found we came to a new idea. We introduced multi [inaudible 00:25:45].

(25:45):

So we use multiple markets. So if there’s cyber search opportunity, or there’s a liquid market which we can use to jump from one token to another token to another token, we use them as in Parallel it’s like a graph, yeah? From point A to point B in Parallel. So just one thing. Anton came to an idea how to build very efficient, decentralized, order book protocol limit order protocol, which is highly flexible, highly efficient. Anton with Michelle, our lead blockchain engineer, they have built a highly efficient router, also for union swap trade. So if you exchange through 1inch just on the union swap pools, you also get the best rate, and also best execution. Better than the union shop itself, because our guys optimized really on low level with assembly, the execution itself. And it’s like 10% is cheaper than the itself. They have liquidity protocol.

(26:49):

It was actually like a joke project. Anton came to an idea how to protect people from front riding attacks by using virtual balances. About this Vitalik rotary, 1216 we came later to this post. This is still a huge problem. Front running protection, sandwich attacks happening all the time. You open your up, all the huge amounts you get front front. That’s why we are launching very soon Rapid Call. I’m going to present it in Vietnam and Philippines on the events. Just kind of which protects people from frontline attacks, more or less good by using flash bots under the hood. It’s just an additional RPC endpoint with additional microservice logic, which optimized the execution. Yeah, we have other teams joining us under 1inch Network. 1inch Network is decentralized project. It tries to became fully decentralized. We have Dow, we have a Multisig. We have 16 minutes of dollars in Multisig which we were collected from the aggregation protocol.

(28:00):

This kind of SPR plus which is happening, it’s little bit, that’s what’s happening when someone is exchanging, and the price and the transaction time change because when something pumps shortly. And this little bit goes directly to the Dow, and Dow can decide. You take 1inch tokens, you’re one of the decision makers. This is where we go right now with the 1inch Network. We have the foundation which fully independent from me and Anton, serve the front end to ensure independently existing client for 1inch Network, I would say. And their contributor co contributing to it. One out of 30 people around the global [inaudible 00:28:41]. Yeah, just as 1inch. It’s not piece of software which offer you to exchange something. It’s more. It’s opening also doors for developers. You can apply for the grant, you can build something for 1inch Network, you can build something for the DeFi.

(28:57):

You get a small amount of money to start on it. And we provide also support we introduce to investors. We have teams joining us. One team is building 1inch hardware wallet, alternative open source solution to ledger which is closed. They have kind of chip and they say this is our magic, and we promised that everything is good. But I don’t trust anyone. And maybe they have something what is not super randomly, and maybe someone can replicate all these seed [inaudible 00:29:29], and can drain all the wallets. No one knows. And that’s why I feel there’s room for open source hardware wallet, which can be built by everyone. You can buy it or you can order it in the future, and you can also build by yourself if you want, with the standard technology. Yeah, fully open source. Of course. Also another team is working on this supply storage.

(29:55):

If you have seen the Silicon Valley series, TV series, they have built this decentralized storage, right? And these guys who are building this dNet thing, they actually built it already 2018 with a gas station company. The gas station company had like 200 gas stations,, and they didn’t want to host own servers. That’s why on each of the gas station and on each of the computers they installed a small piece of software, which kind of organized decentralized storage, fully encrypted. So if you just private keys, you have only access to your files. It’s working. It’s already working, and they’re adopting it for DeFi. I hope in the next years they’ll release it fully in production.

(30:47):

I’m still waiting for a plugin to use it as Google Drive, yeah, iCloud drive. So I can ensure that my files I include with my private key and not with Google one or Apple one. So yeah, this is 1inch Network. We’re coming from hackathon. We participated we found 17 hackathons around the globe. We were everywhere. New York, Boston, Denver, India, so far. Africa, Germany, Berlin, Stuttgart. Won a lot of hackathons, and a lot of people are also our friends from hackathons who deliver for us highly efficient. And are super motivated to build the financial future.

Nick (31:30):

1inch came out of that hackathon environment. I’m curious if you or Anton had any sense early on of how big and what an impact 1inch would have when you were working in those early morning hours crunching away on code?

Sergej Kunz (31:42):

We had no idea, really. We had no idea. I was running around and pitching 1inch to everyone. How I did it. Normally I was really bad in pitching, and also the judges, they didn’t see any cool things on this implementation. But one guy said this next big thing, this was Leon [inaudible 00:32:04], the organizer of ETH Global. He said this next big thing and I said like “Okay we want just 300 bucks.” I was able to pay for my airplane ticket, and weeks later we recognized people start sharing the link to the D app, and people start using it. And we’ve thought okay then we need maybe Twitter account. We set up Twitter account, started to add new agreed to sources. So we were like working one half years for free. We’ve working in the nights for 1inch, turning around the globe we were working on the hackathons.

(32:44):

On different other projects, we have got digitalized streaming platform for example, and South Africa won also good prize for this. But we didn’t continue to work on it because we have seen 1inch is something, what’s actually is useful for the user. We got good feedback from the community, and we grew up with the community. We didn’t spend any penny for marketing or something in the first one and half years, because we had no money at all. So we spent all time, I spent a lot of my time for 1inch. Our community helped us a lot. We got small amount of money from Bitcoin grants. It was also cool. One guy just sent us 50K. We were like wow how this? And actually it was mistake by this guy, but he didn’t ask to get it back. We asked them to send him back, because it was looking like mistake and he said like “It’s fine guys. It’s a small investment from my side to you.”

Nick (33:43):

You still in touch with this one $50,000 investor at all.

Sergej Kunz (33:48):

Anton I guess communicate with them sometimes. Yeah. I need to thank this guy once again. It’s helped a lot. We were able to hire one guy, who helped us a lot by developing it and yeah, didn’t take the money by ourself, it just expanded for new people who joined. Now we are 150 people around the globe, we’re growing. Every month like five to 10 people coming and actually I don’t know everyone already. It’s like getting huge.

Nick (34:54):

Let’s talk a little bit about that, because that’s a unique experience. Scaling adapt is incredible and you went from zero to 60 super fast. And I know it was a long journey for you. You were traveling around the world, you were participating in hackathons. But for most people that hear your story, you went from zero to 60 almost overnight. But a lot of work goes into that, right? Scaling, like you said, you’re hiring new team members, looking for funding. What have you learned through that experience of scaling 1inch from a hackathon idea to what it is today?

Sergej Kunz (35:29):

It’s important to align everyone. If you have one of monkeys in a house, they’ll just break your house. So they need to be aligned, everyone. So you need to speak with everyone. It’s still my job to communicate. I don’t write almost no quote. Sometimes when I’m in an airplane and flying from additional conference back to home or to conference, I try to call MVP or something. But yeah, normally I’m communicating with everyone, try to align everyone, sharing what’s happening in the other teams and we have also our team meetings. Yeah, alignment is very important.

Nick (36:14):

If you could go back in time and give yourself advice, maybe that night when you and Anton were working at that hackathon coming up with this idea and building 1inch, what advice do you wish you would’ve known then that now about the journey you’re about to take?

Sergej Kunz (36:30):

I wouldn’t change anything. Nothing. Every step we did was helpful and also it was additional experience for us. So learning, every time we learned something. We didn’t raise one half years because we couldn’t do it, because we had no idea how to do that. We didn’t understand how 1inch would look like in two years. We had no idea. We just continued to do what people were asking for. So I wouldn’t change anything.

Nick (37:03):

What is your long-term vision for 1inch?

Sergej Kunz (37:06):

So this so difficult to say. Everything changing very fast. We had months ago, FTX as biggest exchange, now we have FTX. I’m not sure if I’m willing to say it like Elon Musk wrote on Twitter, Sam 5 million people at once, yeah? This is crazy. But maybe it’s good for DeFi in terms of people start to not trusting centralized exchanges, because not [inaudible 00:37:38] not your money. And another Sam can do the same Empty Gox, a hack. We have seen this Canadian exchange as well where this guy died and actually people find out that he actually stole all the time money from the people, and he FTX, gambled too much and now a lot of people lost a lot of money. Why to trust people when you have other solution like DeFi? Yeah, don’t trust anyone, just verify. When you sign something, verify what you’re signing. And that’s why we have built also 1inch wallet. So the wallet explains what you’re signing.

Nick (38:18):

Are there any upcoming news or announcements you can share with listeners about the community and the things you’re working on at 1inch?

Sergej Kunz (38:24):

Yeah, we have a lot of things happening. A lot of teams joining. We have huge grant program, half the world is coming but this additional team, which I try to help them in terms of sharing my knowledge, how to maybe structure the team, which processes should be used like Scrum for example. How to speak with people to work together. Not like to let the people work for you. It’s very important, also for such a decentralized projects. I see it like I’m working with everyone there and not they work for me or something. And 1inch Network itself now governed by the DAO, and also push through foundation. I’m anyway, not controlling the project, but we have all our protection kind of. So what’s coming? I’m going to announce Rabbit hole in Vietnam next days. It’s a small RPC service with microservice behind it, which sent the transaction to the minor directly, which you sent to when you do 1inch swap.

(39:40):

So we are not covering anything else except 1inch swaps to make more efficient. So when you do a swap, you would be protected from sandwich attacks. It’s very important. A lot of sandwich attacks happening right now on Dexus. And to prevent it, we need new kind of protocols. For example, they’re kind of approaches which can help to protect from sandwich attacks. For example, introducing virtual balances. But I don’t know why I [inaudible 00:40:12] didn’t implement it yet. I tried to push this topic but she’s ignoring it somehow. Yeah, this kind of small service, what I need personally, because I did last time at trade and I had, because of my residence in Germany, I had to sell my Ethereum when it dropped to fix my loss so I can report it. It’s also kind of nice things here in Germany, and I just sold my Ethereum and bought it again, and I lost 10 Ethereum and it was a lot for me.

(40:44):

It’s really a lot. To prevent this such service would be helpful. We’re building on the next version of the network, I would say. It just is a different approach of trading. I call it decentralized NASDAQ. I cannot share more, but I hope we can deliver it this year. I cannot promise this because it’s not depending on me. It’s a lot of people, I try also to help where I can, but if it would work this year it would rock. Also, this topics for institutionals, what we are also working on. We have additional entity in Switzerland, and we are building based on the community technology. Based on the open source software and the smart contracts, we are building institutional products. So institutionals can exchange between each other, easily, by not pricing anyone, just using the protocol. If you can release this supplies non stack this year, it would also push the institutional topic forward in DeFi space. I’m pretty strong.

Nick (41:53):

What’s your vision for the future of DeFi? I mean 1inch is really powering the day-to-day activity of DeFi users. But as a whole does DeFi eventually swallow traditional finance? Does it eventually get adopted by everybody in the world? How are you thinking about that?

Sergej Kunz (42:10):

It’ll be adopted I’m pretty sure, because it makes the current financial system more efficient. Yeah, more robust and more efficient, more secured and inefficiency would be removed automatically. This is life, this is evolution. Inefficiencies would be removed for sure.

Nick (42:33):

How do you make sense of all the recent activity in the market? I haven’t asked a lot of guests of the podcast this question, but the FTX thing was a big deal. 2022 has been a difficult year for the industry as a whole. How have you been thinking through not only what’s happened but the road ahead?

Sergej Kunz (42:50):

So for me, I don’t care about prices. If it’s pumps or dumps, I don’t care. We see on 1inch in any case on pumps or on dumps, huge volumes. Because like you say in Germany, you need a way to die, yeah? And trading need to die one day in terms of they need to fix the position. They need to sell or they need to buy, or to start a position. 1inch is the best place for this with the best liquidity in the market. So all the hacks, what happened, it’s of course terrible because of lack of security audits from our point of view. On our side we try to organize as much audits as possible. So the last V5 router release was with at least 10 audits, security audits, consensus, open zin, top players. It was very expensive. How I know, I guess foundation paid huge amount of money to get these security audits. And the FTX topic is maybe good for DeFi.

(43:56):

Of course it’s not good for people who lost their money. I know some of them. There are some people who were writing to me they were going to kill themself because of this one guy who just speculated and good English words, fucked up. Yeah, I tried my best so they didn’t kill themself and it’s terrible. It’s terrible to see people losing money by having these actors, who this guy was sitting in front of the US government and thought they’re regulated by this entity, this entity and this entity. But I’m asking how they were regulated, if they did such a huge gambling and lost a lot of money. We had similar case in Germany with Wirecard. Wirecard was payment provider, and they actually just stole a lot of money from investors, and just did fake operation. And also was regulated by Buffin.

(44:58):

And I am asking again how they regulated them. Maybe it makes sense to improve the regulation to remove complexity parts like humans. Humans are complex, humans are hungry for profits. If you remove humans and you audit smart contract, maybe it makes more sense, you know? And it’s more secure for retails. Well, if it’s verified that this smart contract is not cheating in any time, then it’s more secure and better regulated than to regulate and trust someone who promised they will not gamble with eight billions of dollars.

(45:41):

In the future, of course we need recovery time, maybe a year, maybe two. But this is good time to build something. Also for every developer, you have the time to build. Of course, you have problems with getting the money to start to build on something. But there are a couple of grants. So there’s Ethereum grant program, there’s Near grant program. There’s 1inch grant program as well. So apply for the grant, get small money to start to work on something. And also in this bad times investors are investing. We see some investing, of course lower valuation, but we need to stay on the earth, you know? Better to have the right valuation of the project than better than something that is not real.

Nick (46:30):

Sergej, you know a lot of my listeners are enthusiastic about the graph protocol and how it helps serve, and partners with a lot of apps out there like 1inch. How does 1inch use the graph?

Sergej Kunz (46:43):

We used graph from the beginning I would say for a lot of things. It’s cool to use for aggregate some information on chain. Actually we aggregate the aggregate information right now. So we have some microservices. We just provide aggregation information and a lot of information also coming also from the graph.

Nick (47:04):

You once said Sergej, that the coolest thing about this space is that anyone can create a unicorn company. You just mentioned there that we’re probably entering a period of time where people will have space to create and build. What’s your advice to listeners out there right now who might be afraid to take on the risk of building or they’re not sure if the time is right? You’ve done it. What do you say to them?

Sergej Kunz (47:24):

Keep building, try. If you fail, stand up, build. This methodology I have from BJ Brazilian jujitsu. I do martial arts my whole life almost. And what I learned, there’s someone else who’s better than you all the time. So competition is really good so you improve yourself. And if you overtake someone, there’s someone else whom you can overtake and you improve yourself. And in Brazil jujitsu, when you fail, fail, fail, you try again, and again, and again, and one day you are better than this other guy. Just my experience. So, I’m blue belt and I have still to learn a lot of things. But just keep doing it, you will achieve what you want. It can take a little bit of time. For me it took 18 years, but I however already said, I wouldn’t change anything. I wouldn’t change, also the fact that my ex-wife decided to leave me and I had to leave in the office for one year, with no shower.

(48:28):

I had my air bath and I was sleeping there with my daughter, which is six years old, she was three years old. And we have her 50/50, right? So she was like three, four days with me in the office. I tried to organize it’s like a home, but at the beginning I had nothing. I had to pay to my ex-wife. I had to pay for a lot of other things and yeah. I wouldn’t change anything because this is learning. Every step you did to this success is something what you need to get the success. This how I see it.

Nick (49:05):

One last question before I ask you. The GRTiQ 10, why didn’t you give up? There’s been a couple of points in your career where you could have just given up, and I don’t think anyone would’ve blamed you, right? You had a boss that kind of turned on, you made life difficult, you could have given up then. You lived in an office for a year with your daughter after a divorce. Could have given up then. How come you never gave up?

Sergej Kunz (49:28):

Yeah, sometimes it was difficult, really difficult. Also, just divorce was, I got panic attacks but I was feeling myself stronger after everything happened. Of course, it’s sometimes very, very difficult. You need someone who can help you. In my case it was Anton. So when I was living in the office, she was this person who helped me to travel around the globe, to work with me, to also motivate me. And this helped me to not give up. And some people like giving up too early. And also based on my experience from martial arts, I know one day I will reach the specific level which gives me a benefit.

(50:25):

I will be better than someone and I will achieve my goals by just keep keeping doing it. Also, I heard from my parents as well, from my family, just give up. I had a girlfriend, she said, “Give up with your business with what you are doing there with additional work,” after normal work, doing some websites, portals or whatever building our own aggregator. It makes no sense. They said it makes no sense. Because you can just leave and work normally for normal day job and live your life. And I didn’t agree on that, because I have seen that I have the opportunity to improve myself. I can get better job when I am doing more than other people. And I knew that I will build something what is helpful and useful by other people. I had this feeling, I had the trust. That’s why I guess I never gave up.

Nick (51:24):

Sergej, now I’m going to ask you the GRTiQ 10. These are 10 questions I ask each guest of the podcast every week to help listeners learn something new, try something different or achieve more. So are you ready for the GRTiQ 10?

Sergej Kunz (51:38):

Yes.

Nick (51:48):

What book or articles had the biggest impact on your life?

Sergej Kunz (51:53):

I’m not reading books a lot I would say, but I guess the Java book, which helped me to improve my programming skills. Which I got as a gift from my first boss. I did small job in the shop, hardware shop for PCs, and I was all the time looking this book and after a week the boss like said “It’s for free, take it.” I cannot see it anymore that you’re going all the time to this book and reading something. Yeah, yeah, just Java book. Java is an island or something like that.

Nick (52:37):

Is there a movie or a TV show that you recommend everybody should watch?

Sergej Kunz (52:41):

Yes, the Silicon Valley series for sure. It’s funny, it’s cool and it’s also motivating a lot I would say.

Nick (52:51):

If you could only listen to one music album for the rest of your life, which one would you choose?

Sergej Kunz (52:57):

Disturbed, maybe.

Nick (53:03):

What’s the best advice someone’s ever given to you?

Sergej Kunz (53:06):

Best advice. Best advice, I guess it was from my parents when they told me that I am too stupid to go to a higher school for higher degree. I guess this was the best advice, and I recognize it’s not true. It cannot be true. And I’m going to show them.

Nick (53:30):

What’s one thing you’ve learned in your life that you don’t think most other people know or have learned yet?

Sergej Kunz (53:36):

This difficult, every person is unique. I have seen a lot of, I would say shit in my life. Also, a lot of good things. I guess living in the office is one of greatest experience a person can get. If you can avoid it, avoid it. But if you are in this position, just try to do the best.

Nick (54:01):

What’s the best life hack you’ve discovered for yourself?

Sergej Kunz (54:04):

The life hack is repeat doing. It’s like with 1inch was called by 1inch punch from Bruce Lee. And the mythology of Bruce Lee is he said, “I don’t have a fear from a person who can do 1000 moves, different punches or something.” He had fear of a person who can do only one move but which they trained like with 100,000 times, yeah? So if you repeat something, if you try to do something, I’m normally very bad in a lot of things at the beginning, and to improve that I just repeat, repeat, retry, repeat, repeat, try to change it little bit, adjust and repeat. And again, the same when I play games. I play a game 10 times from the beginning to achieve the best result.

Nick (54:58):

Based on your own life experience and observations, what do you think is the one characteristic or habit that best explains why people find success in life?

Sergej Kunz (55:09):

I guess because they don’t give up. They don’t give up. It can be that you tried the whole life, but it’s better you try and you don’t reach your goal, but you reach something. And I promise you earn a lot of things by trying or you achieve a lot of things. Maybe someone is trying to become a millionaire, but at the end this person will recognize it was not about the money. It was not about to become a millionaire. It was about to do something, what is helpful and useful, is how I see it.

Nick (55:50):

And then Sergej, the final three questions are complete the sentence type questions. So the first one is this. The thing that most excites me about web3 is-

Sergej Kunz (55:59):

The freedom.

Nick (56:00):

And how about this one? If you’re on Twitter, you should be following

Sergej Kunz (56:03):

1inch.

Nick (56:06):

And lastly, the thing that makes me happiest is-

Sergej Kunz (56:11):

What makes me happy, when my daughter is happier.

Nick (56:24):

Sergej, thank you so much for your time. You’ve been incredibly gracious and I’ve really enjoyed learning more about your story and what you’re building at 1inch. If people want to learn more about you and follow some of the things you’re working on, what’s the best way to stay in touch?

Sergej Kunz (56:37):

You can find me on Twitter, D6. I’m also on the contributor page on 1inch io. If you go on 1inch io, you get also some documentation or information. What is 1inch Network, how you can contribute if you want to contribute, or if you need a grant, you can ask also go there. We have also a lot of links to Telegram channel to chat, to Discord, to forum. So yeah, 1inch io, you can find there everything. Also, context of all the contributors as well. We have a page with a lot of contributors around the globe. So you can also chat someone if you have any questions to any of these protocols or implementations.