Institutions Building DeFi From Scratch? Kunz Has Some News for You

Institutional players entering decentralized finance risk reinventing the wheel so hard they're basically manufacturing a square tire, according to Sergej Kunz, co-founder and chief executive of 1inch. Speaking at EthCC 2026 in Cannes, France, Kunz pointed out that many TradFi firms are still approaching DeFi like it's 2019 and nobody has heard of AMMs yet, often attempting to rebuild technology that already works perfectly well onchain. The man has seen some things, and watching banks try to "innovate" DeFi from scratch apparently ranks somewhere between watching someone use a calculator to add 2+2 and discovering your grandma's wallet was drained by a approve() scam.

1inch is a DeFi aggregator that routes trades across multiple protocols to find the best possible execution. Its technology is integrated into major Web3 wallets and used by some institutional platforms, including Coinbase. Think of it as the Google Maps of token swapping—except instead of finding the fastest route to your questionable life decisions, it finds the most efficient route for your swap through the labyrinth of liquidity pools, which is arguably more useful and certainly less likely to lead to a 3 AM existential crisis.

Kunz described 1inch as a hybrid between a search engine for token swaps and a backend infrastructure provider for financial applications. The platform's routing algorithms identify the most efficient paths for trading between assets, even when direct liquidity is unavailable, while its intent-based protocols enable compliant execution through professional market makers. It's basically Skynet, but instead of exterminating humanity, it just really wants to save you three basis points on your USDC-ETH swap. Different kind of apocalypse, honestly.

"We are like a search engine for users who want the best execution when swapping assets, and at the same time like an infrastructure layer for developers, businesses and institutions," he said. A charming admission that 1inch is basically the entire backend for half the DeFi space while everyone else pretends they're building something revolutionary by forking Uniswap and changing the colors. Revolutionary in the same way your dietary change to "water only" was revolutionary.

However, Kunz said a lack of coordination continues to slow institutional adoption, with firms often building in isolation rather than collaborating with established protocols. These institutions are out here forming committees to discuss DeFi like it's a philosophical debate rather than just, you know, using the thing that already exists. We're told there's a working time machine, but let's form a task force to research building our own instead. Efficiency is apparently not in the traditional finance vocabulary unless it involves tax avoidance.

"They are working in silos and trying to build what already exists without really discovering who has already done it," he said. "I would encourage them to partner rather than reinvent the wheel because it is already working very well and is highly efficient." Kunz essentially told a room full of suit-wearing DeFi experimenters what every degen on CryptoTwitter has been screaming into the void since 2021: stop building redundant garbage and just use the tools. But sure, sure, your bank's "innovative blockchain division" definitely needs to "disrupt" the space by launching a slightly worse version of Aave with extra steps.

On AI, Kunz said its most immediate value for 1inch lies in improving developer productivity and integration, rather than enhancing core trading functions. He noted that the platform's routing algorithms already operate with high efficiency, making AI unnecessary for execution itself. Instead, he sees AI playing a useful role in simplifying access to data and accelerating product integration. Basically, AI is great for making sense of the chaos, but the routing is already so clean that throwing an LLM at it would be like using a flamethrower to toast marshmallows. Technically works, but missing the point entirely and possibly dangerous.

Kunz also expressed caution around deploying AI agents directly within financial products, citing concerns over accountability in a decentralized environment. "This reflects the decentralized finance culture. You are responsible for your actions," he said. "I don't want to be responsible for your actions. That's why I'm not sure we will introduce something that decides for users. People need to understand and decide for themselves." A refreshing take in an industry where everyone's trying to offload responsibility to smart contracts, oracles, or that one Discord mod who definitely shouldn't have admin privileges. Accountability? In DeFi? Groundbreaking stuff.