The intent-based transaction was created to solve this issue, making DeFi easier to use. Rather than handing you a toolbox and asking you to construct the car, the system functions like a taxi driver: you simply say where you want to go, and it takes care of the driving.
Back in the early days of decentralized finance (DeFi), trading was kind of like piecing together a puzzle. You needed to calculate the gas fees, pick the best route for your trade, and cross your fingers that the transaction would go through. If you messed up, you could end up losing cash.
What is Intent?
In DeFi, an intent represents what you want to achieve. Unlike a typical transaction that provides detailed steps (like “Do A, then B, to get C”), an intent just expresses the end goal (for example, “I want X, and I’m ready to pay Y”). Now, let’s take a look at how this new intent model stacks up against the old-school approach.
How Do It Work?
In an intent-focused architecture, the way transactions are handled shifts quite a bit from the usual public mempool model.
- User expression: A user sends a message (the intent) that outlines their specific goal, like exchanging Token A for Token B at a set minimum price.
- Outsourcing: This intent gets shared with a network of third-party agents, commonly referred to as solvers, searchers, or fillers.
- Execution: Solvers compete to discover the best execution path. They might pool liquidity from different sources, combine several orders, or utilize their own inventory to meet the request.
- Settlement: The successful solver carries out the transaction on-chain. In many setups, the solver covers the gas fees initially and gets reimbursed through the trade.
The Example
A lot of DeFi protocols are using intent-based models to improve their services: UniswapX, 1inch Fusion or Across Protocol.
Risks and Challenges
While intents simplify things, there are a couple of points to keep in mind:
- Centralization risk: At the moment, becoming a solver requires a lot of effort. If just a handful of large companies can manage it, the system risks becoming more centralized.
- Trust: You need to have faith that the solver system is operating justly. Since part of the work occurs off the main blockchain, it can be trickier to understand what’s going on compared to the traditional method.
Conclusion
Intent-based transactions aim to simplify DeFi, making it as user-friendly as a typical banking app. By concentrating on your desires instead of the process to achieve them, the technology becomes less noticeable. As this technology advances, we can look forward to more seamless, cost-effective, and secure trading experiences for every type of DeFi user.