1inch Co-Founder: Centralized Exchanges to Fade in 5-10 Years

Sergej Kunz, co-founder of leading DeFi aggregator 1inch, presented a compelling vision for the future of cryptocurrency trading during his appearance at Token2049 in Singapore. He articulated that centralized crypto exchanges, which currently dominate the market, will gradually fade into the background over the next five to ten years. According to Kunz, these traditional platforms will eventually serve primarily as frontend interfaces for decentralized exchanges rather than maintaining their current role as comprehensive trading venues.

The fundamental distinction Kunz draws lies in market structure. He argues that centralized exchanges operate as isolated markets, each with their own liquidity pools and trading pairs that don’t interconnect seamlessly. In contrast, DeFi aggregators like 1inch function as global liquidity hubs, scanning multiple decentralized exchanges simultaneously to find the best prices and deepest liquidity for traders. This architectural difference, Kunz suggests, gives aggregators a structural advantage that will ultimately reshape the entire crypto trading ecosystem.

Kunz’s forward-looking statements came alongside a significant business development that underscores the very transition he predicts. 1inch announced a strategic partnership with Coinbase, one of the largest and most established centralized cryptocurrency exchanges in the United States. This integration will bring 1inch’s DEX aggregation service directly to Coinbase’s user base, effectively allowing the centralized exchange to offer decentralized trading options through its platform.

The Coinbase partnership represents a tangible step toward the hybrid model Kunz envisions, where centralized exchanges begin incorporating decentralized infrastructure. For Coinbase users, this integration means access to better pricing and broader liquidity across multiple decentralized exchanges without leaving the familiar Coinbase interface. For 1inch, the deal represents validation of its aggregator model and expands its reach to one of the largest retail crypto trading audiences in the USD-denominated market.

Kunz provided a specific timeframe for this industry transformation, estimating that the complete transition from centralized dominance to DeFi aggregation supremacy will take approximately five to ten years. This timeline accounts for both technological maturation and user adoption curves, suggesting that while the shift is inevitable, it won’t happen overnight. The gradual nature of this transition allows existing centralized exchanges like Coinbase to adapt their business models and integrate DeFi services rather than facing immediate disruption.

The Singapore-based Token2049 conference provided an appropriate backdrop for these predictions, given Asia’s significant role in both centralized and decentralized crypto trading. Kunz’s comments reflect a broader industry conversation about the future of crypto infrastructure, with many experts questioning whether the current centralized exchange model can coexist with the permissionless, transparent nature of decentralized finance in the long term.

As the crypto industry continues to mature, partnerships like the one between 1inch and Coinbase may become increasingly common, serving as bridge solutions during this transitional period. These collaborations allow centralized exchanges to offer the benefits of DeFi—such as better pricing and self-custody options—while maintaining the user experience and regulatory compliance that have made them successful. The ultimate test will be whether users gradually migrate entirely to native DeFi interfaces or continue preferring the hybrid approach that Kunz predicts will dominate.