EP - 96

Decentralized Then vs. Now: What's Changed Since the Last Cycle?

with

Sergej Kunz, Mo Sayed & Carl Anderson
Co-founder of 1inch, Head of Brand Development @ Ledger, & VP of Engineering @ Ledger

Apr 09, 2025

On this special edition of The Ledger Podcast, recorded live from Ledger 106, Ledger’s Paris headquarters, we welcome back Sergej Kunz, co-founder of 1inch, and Carl Anderson, VP of Engineering at Ledger.

Their discussion delves into the monumental shifts in the DeFi landscape since Sergej’s last appearance on the show in 2021, exploring how far the industry has come in balancing usability with the foundational principles of self-sovereignty and security.

“[Everyone’s now] building crosschain things, from scaling, to going to Solana, and also working on Bitcoin layer twos.” – Sergej Kunz

Key Highlights:

A Retrospective on 2021: DeFi’s Experimental Frontier

The conversation kicks off by looking back at 2021, a period Sergej describes as when DeFi was really at the experimental frontier. Back then, decentralized exchanges (DEXs) were just beginning to gain adoption, but lacked the features and attention they have today. A significant change since then has been the proliferation of aggregators, with new players like Zax emerging to centralize liquidity.

The industry has also seen a strong move towards intent-based protocols, which aim to create a seamless experience for the users.

The Seamless Experience: Usability Meets Sovereignty

Sergej highlights progress made by intent-based protocols like Across, which offer fast settlement, though still requiring some user trust.

1inch, for its part, provides atomic execution with longer settlement periods to ensure users always get their funds back if something goes wrong, ensuring users get what they expect to get. He stresses that the user should not care about the network itself, and complete actions without high complexity.

Comparing the full cycle of a centralized exchange (deposit, trade, withdraw) versus a decentralized cross-chain swap, Sergej argues that the decentralized process is definitely a much longer process for CEXs, hinting at the inherent efficiency of DEXs.

AI’s Growing Role in the Crypto Landscape

Sergej notes projects building intent-based protocols where users can simply send an intent and receive execution from an AI model based on their prompt, eliminating the need to directly use tools like ChatGPT APIs.

AI agents could explain how crypto works and even facilitate transactions like a swap, allowing users to simply tell an agent: “hey swap my Ethereum 2 please.“

Ledger’s Vision: Secure Self-Custody with Unrivaled Convenience

“The basis of why [Ledger] exists is security and protecting your keys.” – Carl Anderson

Once private keys are secured by a Ledger device, users also need to be able to use it and get the most out of web3.

From having only one buy provider in 2021, Ledger Live has evolved into a comprehensive tool integrating over 70 partners, offering services like buying, selling, swapping, card functionalities, staking, and yield provision.

The Clear Signing Standard: A New Era of Trust at Use

The benefit of using Ledger Live is the added layer of security through strong partnerships and curated, reviewed smart contracts, ensuring everything within Ledger Live is clear signed.

While clear signing isn’t new, Carl highlights that the rise of complex smart contracts made their old system unscalable.

Ledger’s solution is a generic parser, which allows DApp developers to provide a file that securely translates complex data into a human-readable format on the device. The goal is to allow a user to understand the transaction and verify for themselves if what they’re signing is truly legitimate.

To further enhance security, Ledger also provides on-device transaction simulations. Unlike software wallets where simulations can be manipulated, this feature securely displays a transaction’s potential outcome on the screen, allowing users to safely verify what they are signing.

1inch’s Journey: Building a Brand Through Community and Innovation

1inch built its brand on a zero budget by using memes and offering the best swap value with no interface fees. Sergej explains that competition and direct user feedback gathered at events fueled their innovation.

Their key breakthrough was a graph algorithm for finding complex swap paths without direct liquidity, which led to further advancements like intent-based protocols and cross-chain functionality.

Nurturing Global Developer Adoption: Openness and Ease of Use

Carl emphasizes two key pillars for global developer adoption: openness and ease of use.

Openness: initiatives like the clear signing standard (ERC 7730) are public, with a vision to decentralize the supporting metadata repository for the good of the ecosystem.
Ease of use: Ledger has released a new SDK that simplifies device interaction, making it easy for developers to embed Ledger’s security directly into their projects in a business to developer to consumer model.

The Future of DEXs: A Glimpse into 2030

“[You’ll be able to] trade any tokenized asset, including securities, stocks, bonds, and more, [with the] best execution” – Sergej Kunz

This future will see institutional adoption alongside retail users. From a user experience perspective, no one needs to understand that they need to change a network; assets across different blockchains will appear unified, and the system should simply work without complex multiple transactions.

Rethinking Crypto: An Evolutionary Path

Both Sergej and Carl agree that crypto’s development is a necessary, iterative evolution rather than something to be rebuilt from scratch.

“The financial industry will adapt to (crypto) technology because we are much more efficient, much safer and much more transparent.” – Sergej Kunz

Sergej compares it to the internet’s growth, where sequential, short-term solutions pave the way for future breakthroughs. Carl echoes this and states that this learning process has been essential, even if one might wish for better foundational technology to have existed from the start.

Watch the Episode Here: