As the launch of Flash Trade is approaching, Kinetex's co-founders Tigran Bolshoi and Mike Shishko recently discussed their first product, Liquidity Aggregation, and their experiences creating this solution. In a brief interview, they shared what inspired them to develop this product and how it helped to make cross-chain swaps more convenient.
Can you tell us about the inspiration behind Liquidity Aggregation?
Tigran Boshoi: "As with all things Kinetex, our biggest inspiration is our own experience trading crypto. For example, when we needed to transfer assets cross-chain, we often got stuck for at least 30 minutes swapping assets, and it did not even include the time spent looking for the right platform with adequate rates or ensuring they had enough native assets for gas payments. It may not seem like much if you only make a transaction once a week, but it is completely insane for someone who trades on a regular basis."
Mike Shishko added, "We realized the need for a solution that can make the trading process quicker. We were certain that we were not the only ones who found trading too time-consuming and ineffective. Thus, it was the perfect opportunity to create something that was awaited across the industry. Another significant point was that we ought to make the process not only quicker but also easier and more accessible."
Bolshoi: "Yes, that was a crucial aspect for us when thinking in terms of long-term changes we could bring to the industry."
Can you please specify the primary concerns you aimed to address through the Liquidity Aggregation mode?
Shishko: "For this mode, we decided to tackle one of the industry's most pressing challenges: finding adequate liquidity. To ensure that our users can access as much liquidity as possible, we decided to create a meta multi-chain aggregator, a place where users can find sufficient liquidity for thousands of crypto assets. By aggregating DEX aggregators and cross-chain protocols, we maximize the liquidity we aggregated and ensured almost infinite liquidity across blockchains."
Bolshoi: "Another feature that helped in making the swap process more straightforward was automation. We presented it early on, providing users with an opportunity to enjoy an effortless swap experience. They had to sign the transaction only once and could leave without waiting for each step to complete and worrying whether it would be completed at all. Automation was possible due to the network of relay nodes, which execute each smart contract automatically in every network.
When users talk about the complexity of swapping assets cross-chain, they often mention gas payments. Were there any solutions that you developed to help with that?
Shishko: "Yes! The last innovation we created while launching Liquidity Aggregation was gasless flow. As all of you may have experienced, making gas payments has been one of the hardest aspects of swapping crypto. You should always calculate to have enough amount, store it, and manage all necessary wallets. It required users to have some knowledge and experience to get a gist, let alone understand all the details perfectly.
We created the Gasless solution that enabled users to pay for gas easily, even without having the right native coins on hand. The first version allowed paying for gas with any permit token, and the improved version allowed paying for gas with any supported token using the escrow approach. Users need to make a gas deposit in any available token, and after that, they can start swapping, and Kinetex will make gas payments for them, taking an equivalent amount from the tokens users swap."
When talking about automation, you mentioned signing transactions. What other security measures are employed in Kinetex's Liquidity Aggregation?
Shishko: "Approvals are a vital part of user security, which unfortunately are not discussed often enough. It is a safety mechanism that allows users to ensure that only authorized individuals have access to the tokens and that they are used for legitimate reasons. It also allows them to monitor the usage of their tokens and detect any suspicious activity. Conversely, there is an increased risk of fraud or theft without proper token approval.
The importance of approvals cannot be overstated, especially in the case of decentralized apps (dApps) that rely on self-executing smart contracts to operate without human intervention. Therefore, ensuring that only authorized individuals have access to these contracts and that they are executed appropriately is essential."
Bolshoi: "In Kinetex Aggregation, there are two options for token allowance: a one-time approval for the exact amount of the current exchange and an infinite approval. We recommend using the first option as it does not grant access to the entire token balance in the user's wallet and provides far better security.
However, infinite approvals have their own advantage — higher convenience. They eliminate the need for users to reissue approvals each time they want to make a transaction, thus allowing for a smoother user experience. In addition, since the infinite approach reduces the number of actions required in the Metamask wallet, it can help users save on gas costs."
Are you satisfied with this solution, and is there something more you would love to achieve?
Bolshoi: "By combining infinite liquidity, automation, and gasless flow, we made a fantastic product that allows users to swap quickly and effortlessly — precisely what we wanted for ourselves! However, despite the success of this mode, we have already found a way to make cross-chain trades even more straightforward and effortless."
Shishko: "With Kinetex's Flash Trade mode, we will offer a completely different approach to swapping crypto. This mode allows direct trades between Kinetex users and a network of professional market makers known as resolvers. The solution's infrastructure is based on intents and resolvers, ensuring the best rates, instant execution times, and a seamless user experience. Keep an eye out for the launch announcement!"