Key Takeaways:
- Intent-centric architectures streamline user interactions by enabling them to express their goals while leaving the execution details to solvers, enhancing user experience in complex blockchain ecosystems.
- The rise of intent services by protocols like Anoma, CoW Swap, and UniswapX promises optimised transactions, potentially saving users transaction fees and time.
- Privacy and security are bolstered, as users only need to share their end goal without revealing detailed steps, relying on established pathways tested by solvers to ensure safer transactions.
- Despite the advantages, a delicate balance is required between solver efficiency and user privacy, with a risk of centralisation and potential loss of control posing challenges to the decentralised ethos of blockchain.
What Is Intent in the World of Blockchains and Crypto?
In the world of blockchains and crypto, an ‘intent’ refers to the specific goal or objective that a user aims to accomplish within the blockchain ecosystem. It is an expression of the individual’s desired end state(s). Generally, a transaction explicitly refers to ‘how’ an action should be performed, while an intent refers to ‘what’ the desired outcome of that action should be.
For example, if a transaction says ‘do A then B, pay exactly C to get X back’, an intent says ‘I want X and I’m willing to pay up to C’. Users submit their intent to a service, which then delegates the task to a ‘solver’ — who can be a person, an AI bot, or another protocol or intent-centric system — to carry out the necessary actions to fulfil the intent.
The difference is that, until recently, users have completed these actions and all individual steps on how to execute them — like choosing on which platform to execute the trade, and at what time and rate — by themselves.
The aim with intent is that users merely state their goal and leave the ‘how’ up to the solver. Instead of focusing on the step-by-step processes involved in blockchain transactions, an intent-centric approach prioritises understanding the desired outcomes or goals of users. This approach aims to simplify blockchain interactions, making them more intuitive and user-centric.
Why Are Intent Services Popular Now?
With thousands upon thousands of cryptocurrencies available — plus a myriad of Layer-1, Layer-2, and now Layer-3 blockchains (and Layer-0 protocols), as well as bridges and interoperability solutions to connect the different chains and systems — it is becoming increasingly hard for users to intuitively know which avenue is their best bet or to even know which options exist.
Intent solutions propose to take care of this for the user. For example, by saving them gas fees or executing a trade at the most profitable rate.
How Intent-Centric Systems Work
Stating the Intent
Different platforms use various terminology to describe the concept of intents, but the fundamental idea remains consistent.
Most intent-based protocols start the process with an ‘intent-discovery’ system, where users publicly express their desired intent. In blockchain lingo, these discovery platforms could be likened to mempools — staging areas for transactions awaiting processing.
An intent might involve a task like converting BTC to a stablecoin on a different chain, which the proposed tasks range from simple to complex with detailed requirements.
Responding to the Intent
The intents get sent to a marketplace of solvers who respond to these intents. Solvers will pick up intents if the offered fee is acceptable.
Who Offers Intent-Centric Services?
Anoma
The Anoma protocol, which introduced the concept of blockchain-based intents, provides an “intent-centric infrastructure.” This infrastructure is designed to fulfil a wide range of requests, enabling other services to align intents with a network of solvers. The intent-centric infrastructure of Anoma aims to facilitate the matching of user intents with solvers across various applications and scenarios.
CoW Swap
CoW Swap is the first interface built on top of the CoW Protocol that utilises batch auctions and Coincidence of Wants (CoWs) to provide structurally better prices, save on gas costs, and reduce execution risk. CoW Protocol is a meta-DEX aggregation protocol that aims to provide users with better prices for cryptocurrency trades. The protocol utilises trade intents and batch auctions to optimise trade execution paths.
When a user submits a trade intent, it is grouped with other pending intents in a batch. Solvers, third-party entities, are responsible for finding the best execution paths for these trade intents. The protocol searches for CoW within the batch to achieve optimal prices. If a CoW is not found, the solvers explore various liquidity sources, including AMMs, DEX aggregators, and private market makers, to find the best prices for the trade intents. This delegated trade execution architecture makes CoW Protocol a meta-DEX aggregator.
UniswapX
UniswapX is a new permissionless, open-source (GPL), auction-based protocol designed to enhance on-chain trading and improve self-custody swapping. UniswapX aims to provide better prices by aggregating liquidity sources, gas-free swapping, and protection against Maximal Extractable Value (MEV), plus no cost for failed transactions, thus improving swapping for users.
UniswapX aims to address the complexity of on-chain routing by outsourcing routing complexity to an open network of third-party fillers who then compete to fill swaps using on-chain liquidity like AMM pools or their private inventory. All orders are backstopped by the Uniswap Smart Order Router, which forces fillers to compete with various Uniswap versions.
Gas-free swapping and no cost for failed swaps can be achieved in UniswapX, which enables swappers to sign off-chain orders; these are subsequently submitted on-chain by fillers who cover the gas costs on behalf of the swappers, eliminating the need for swappers to possess the native network token (e.g., ETH) of the underlying blockchain to trade (or incur expenses for unsuccessful transactions). Fillers incorporate the gas fee into the swap price and can optimise transaction costs by batching multiple orders, thus competing for the most favourable price.
Benefits and Disadvantages of Intent Services for Blockchain
The intent-centric model in the blockchain space offers several benefits that enhance user experience (UX), potentially reduce transaction fees, and bolster privacy and security.
Enhanced User Experience
Users can express their intent, such as wanting to swap a token for the best possible price, without the need to manually browse multiple platforms, like 1inch Fusion, which uses the intent-centric approach to find the best route for users, subsequently saving time and effort.
Reduced Transaction Fees
Through intent, multiple transactions can be consolidated into a single optimised transaction, potentially reducing fees. This approach is like bulk buying, where it can be cheaper to group requests or optimised transactions based on network congestion, thereby saving costs.
Increased Privacy and Security
By employing an intent-centric model, users only need to share their end goal without revealing the detailed steps to achieve it, which enhances privacy. In addition, by relying on established pathways tested by solvers, transactions can be safer.
Disadvantages of Intent-Centric Models
Balancing Efficiency and Privacy
The more information solvers have, the better they can usually fulfil a user’s intent. However, this can also mean that users need to divulge more information than they want to, affecting privacy.
Technical Challenges
Intent-centric models are new and complex. They need to be capable of processing what a user wants from an intent while navigating the ever-growing crypto landscape, where most intent dealings take place. Deep knowledge of the space and solid models take time to build.
Centralisation Concerns
If only a few big players monopolise the solvers market, this could lead to centralisation, which goes against the decentralised ethos of blockchain and crypto. Additionally, the concentration of power in these big players may increase the potential for malicious behaviour.
Conclusion — Are Intent-Centric Services Worth Using?
The rise of intent-centric design marks a significant shift in blockchain, introducing a novel approach to how users interact with the crypto landscape. The concept of expressing intent and leaving the execution details to solvers offers efficiency and convenience to users navigating the increasingly complex world of cryptocurrencies.
Intent infrastructures, exemplified by protocols like Anoma, offer a promising array of benefits, including enhanced user experiences and reduced transaction fees amongst the notable advantages. Users can articulate their goals without delving into the intricate steps, streamlining processes and potentially saving time and effort.
However, it is crucial to acknowledge the challenges and potential drawbacks of intent-centric models. Striking the right balance between solver efficiency and user privacy remains a nuanced task. Further, technical complexities in implementation and concerns about centralisation pose hurdles that need careful consideration before jumping into intent-centric services.
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