 I'm not actually looking at Bitcoin at all. In three years Ethereum will flip Bitcoin. This is Anton Bukov, the co-founder of Oneinch Network, one of the world's largest decentralized exchanges by transaction volume. He's also number 39 on Cointelegraph's Crypto Top 100 of 2022. Bukov is convinced that fixing Ethereum's scalability issue is key for the success of decentralized finance. What is the best scalability solution for Ethereum? And what are the chances it could replace Bitcoin as the largest cryptocurrency? Find out in our latest Cointelegraph interview. Okay, so Anton, the vast majority of crypto users currently use centralized exchanges. So what would it take for decentralized exchanges to take over centralized ones? I think this taking over is already happening. If you would look at what happened to volumes, to users, to a number of trades on centralized exchanges and decentralized exchanges in 2020 and 2029, I believe you would see that the access growth was much more impressive than access growth. And this is just the beginning of this taking over. And so maybe you can point out that the improvements that still need to be made in order to complete this process of taking over centralized exchanges. Yeah, I believe that liquidity is pretty good already. Sometimes we see that for huge trades aggregated Dex is better than centralized exchanges. But Dex still can't compete with centralized exchanges for high-frequency trading, like for professional traders, professional market makers, like professional strategists. Because no one Dex is working like responding for milliseconds. You still have to wait for transaction confirmation. And even on the fastest blockchains, it's like a few seconds. And I believe it's like it will not happen dramatically. It will not be changed dramatically. I mean that decentralized exchanges, they probably will never be as fast as centralized exchanges. And maybe they should not be. It's like current speed is enough for users, for traders who are like doing it, because it's enough for actual trading. It's just not suitable for high-frequency trading, yeah. There is also another issue, which is the involvement of big, big players into this space. So as far as I understand, big players, big institutional players are not allowed to invest into this kind of technology or to get their assets into these technologies because of the regulatory issues that they have on their own. So is it not like a big obstacle for decentralized exchanges to really take over the centralized ones, the fact that they cannot access the capital of these big institutions? Yeah, this is something we are going to solve with the thing we recently announced, which is called Oneinch Pro. This is a service for institutionals, which could allow them to behave as market makers and restrict subset of users who will be able to interact with them. Also, it will allow them to interact as users and interact only with services who are like compliant with their legal documents. I heard some people complain like regulated DeFi is impossible. It's like a bad idea or something, but I believe that regulated DeFi is like, DeFi is such a freedom, financial freedom, which allows subset of users to play with self-restrictions. So regulated DeFi is on the subset of this DeFi for those who want to use it, who is required. Yeah, I kind of agree that the best option would be having all options available. So you can decide whether you want to take on the responsibility of being regulated or not, and you just choose which path suits you better. But now I would like to get into your vision for the future of the blockchain ecosystem. So in a recent tweet you mentioned the risks of cross-chain technology, which have shown vulnerabilities to security breaches. You also shared a statement by Vitalik Buterin who said, the future will be multi-chain but won't be cross-chain. So do you share Buterin's view on this? All these technologies which allows cross-chain interoperability, they are highly experimental from my point of view. In half a year we saw five bridges were hacked. I also had tweet about this with a list of these hacks on screenshot. And one billion of US dollars was stolen in these hacks. And most of them happened because of low-level hacks, low-level bugs in smart contracts, which could be prevented by having more audits. And we not yet saw any attacks on cross-chain consensus, like validators consensus or something like this. But potentially we will see this in the future. And these numbers, they actually sound horrible because this one billion from five bridges is possibly the hugest piece of pie from all the hacks which happened in a few recent years. I think in this case numbers talk for themselves. Right. But then what is the alternative here? So as far as I understand, there are a lot of people that are dreaming about this future where all blockchains will be interconnected to each other and you could move assets from one chain to another freely thanks to these bridges. So do you think that this is not basically a feasible project or you have an alternative so that this can happen with another system? I would say the main difference between multi-chain and cross-chain should be that when we are talking about multi-chain, this means that you should minimize cross-chain interactions and use it when it's like really necessary. It should not be like you execute transactions which have cross-chain interactions every day multiple times. For regular user it should be like they work with some chain and time to time they bridge their assets to other chains. But it's like if you bridge stable tokens like USDC from one chain to another chain, it's safe to have this, for example, any other stable token on one chain or on another chain because this safety is guaranteed by this blockchain. But if you bridge assets, like if you have either on other chain like either on Solano, either on BNB chain, either on any other chain, it should be considered not really safe because you have one more risk which involves bridging of this asset because if something bad would happen to this bridge, your other which should be locked on Ethereum side can be stolen, could be stolen. You said that Bitcoin can become a storage value but Ethereum will be able to become a storage of state. So what exactly do you mean by storage of state? Yeah, I mean that Ethereum could become like a global settlement layer for different deals which could happen on other chains on multiple layer tools and any other like environment. This means that for example any layer 2, how layer 2 works, they usually have smart contract on layer 1 on Ethereum mainnet and if something bad is happening to layer 2 chain, someone is trying to manipulate it or trick others, you could provide some proof to layer 1 smart contract that something bad is happening to this chain and this smart contract will be able to terminate this chain or fix it and this is like you have a separate chain like separate blockchain and you can have interactions on it but it uses Ethereum mainnet as a settlement layer, it settles and finalizes all the transactions and everything was happening on it into Ethereum mainnet and I think this could be expanded to other chains, for example some chains could store their miracle routes in Ethereum mainnet to commit to their finality. That's interesting, so basically you are more of a supporter of this view of Ethereum as the universal layer 1 solution for the future of DeFi, am I correct? Yeah, yeah because we actually see that a lot of different sidechains projects which are actually like different chains, they are going into the direction of being layer 2s, they are trying to became layer 2 to have their like a subsidy model integrated with Ethereum model to like use Ethereum as this settlement layer I'm talking about. Yeah but on the other hand we are also seeing a lot of successful projects like near, we were mentioning before Solana, Harmony, those projects seem to be like alternative to Ethereum, not on top of Ethereum, am I not correct? Yes, but I see as far as I see some of them already started and trying to became like to use Ethereum as some settlement layer I see that there is a possibility that this will not be one rank network of chains, they are all not like equal, they are not like intraractic like on the same abilities, they are more like have some kind of hierarchy. It's like vision that these different chains could somehow relate to each other by committing their states to like more valuable, more like chain which have higher like capitalization I would say, it's not actually about capitalization, it's about power of validators for being non-manipulatable. And do you think this one chain will be Ethereum? Yeah I think that WebTree is could be still distributed among multiple chains and all these dapps can run on any chains that they want to but not all these chains are like equal in terms of how they relate to each other. There is like a high chance that most of the chains will try to commit their states to Ethereum as a higher layer. One of the main obstacles that still prevent DeFi from reaching mass adoption is the scalability issues that are affecting the Ethereum blockchain so that's also what prevents Ethereum from becoming this huge settlement layer I guess because right now in the current status Ethereum cannot really play that role because of those limitations. So you said that developers should not wait or prepare for ETH 2.0 DeFi scaling will happen through layer 2 so here I'm not sure I understand what you meant so why do you think that a layer 2 solution is unfeasible for scaling Ethereum 2.0 and if not then what is your your view on what can make Ethereum scale? The transaction capacity for Ethereum mainnet is limited but it's not enough for current demand and for future demand for sure and what we are trying to do is to scale this demand among like something how to scale it how to allow a number of users and the capacity of transactions to be increased like 10 times 100 times 1000 times and I see scaling solution in the ZK Snarks because the validation complexity is not related to computation complexity your two different transactions like one million of gas transaction and 100 million of gas transactions validation of these transactions on ZK Snark roll up would cost you same amount of computations. That sounds like magic but that's how it works. I talked to Vitalik in Paris like half a year ago about this issue that Ethereum is trying to build this sharding since maybe 2017 when they like came up to this idea maybe even earlier and while they were like in progress of building it this DeFi thing appeared with all this composability thing where all these projects can interact with each other this is main feature of DeFi and what we see that this DeFi is absolutely not compatible with this sharding idea and we will not see DeFi on a sharded environment. I talked to Vitalik about this and he like as far as I understand he agreed that the only scaling solution we see right now for DeFi is layer 2 but actually this is not like a solving it's like a floating scaling issue to layer 2 so now it's layer 2 issue to make more scalable they could provide some performance improvement like 10x 100x maybe 1000x but it will be super hard for them to have one million x scaling it's like next gen issue so for the next five ten years I see DeFi will be atomic and it will happen on single shard or on this layer 2 or on main net it will not be actually sharded it will not interact cross shard. All right now I would like to get into your vision of Bitcoin because you seem to be rather not an enthusiastic fan of Bitcoin in a recent interview you said that you still respect Bitcoin as a store of value but you also said that at this point blockchains with the smart contracts make much more sense so can you expand on this thought? I would say Bitcoin or Ethereum already replaced Bitcoin in terms of blockchain for applications Bitcoin is absolutely not a blockchain for applications it's not for developers you can develop applications on top of Bitcoin you could try but maybe you can develop like some kind of simple logic hash log game I don't know the only application which was like built on top of Bitcoin is Lightning Network but it's not working so good that anyone is trying to use it I afraid it became like a meme in crypto twitter that they're building this lightning network for many years like maybe more than five years and it's not yet there like no one is still using it looks like people prefer to use Bitcoin for like huge trades for settlement trades they're not trying to buy coffee using Bitcoin especially because Bitcoin is not stable token everything you can do with Bitcoin actually is just whole asset you can buy you can sell it I you know I respect Bitcoin technology because it was like the invention of all this industry for sure but it makes absolutely no sense for any blockchain developers okay since you're such a strong believer in Ethereum I guess that you also believe in the so-called flipping so in the scenario where Ethereum will eventually become the largest cryptocurrency and overtake Bitcoin I think there is a high chance that Ethereum will overtake Bitcoin in terms of total capitalization yeah fully diluted capitalization maybe I will try to use like logarithm here and think that in three years Ethereum will flip Bitcoin thanks a lot Anton for being on our show that was a great conversation thank you