The intent system may become the key to solving the complexity of Decentralized Finance.

On the eve of Luna's collapse, I was working on a stablecoin yield strategy for a friend, aimed at replicating those astonishingly high yields from January 2020. This friend is not a cryptocurrency expert and had never even performed on-chain operations before. Our collaboration model is simple: he deposits funds into his hardware wallet, and then we meet via Zoom once or twice a week, where I gradually guide him through the necessary operations.

From the very beginning, we have diversified our funds into almost all available DeFi protocols across various chains. During the 2-4 hour operational sessions, we need to conduct dozens of transactions including authorizations, transfers, exchanges, deposits, withdrawals, and more. Funds are transferred into customized liquidity pools, locked voting projects, and various other initiatives to maximize incentive returns. We have utilized almost all mainstream cross-chain bridges, decentralized exchanges, and yield aggregators to transfer and manage our stablecoin asset portfolio. At that time in the cryptocurrency ecosystem, we touched upon almost all available sources of yield.

The most challenging part of my job is trying to explain in detail all the steps we need to take. I give operational instructions, and he needs to execute and understand the interfaces of various complex Decentralized Finance tools. Our meetings are filled with operational directives like "click here", "go there", "swap this". For example, the process of converting USDC to FRAX/DAI liquidity tokens on Polygon involves:

1. Swap USDC for DAI on a certain DEX in 2 transactions: Approve + Exchange (
2. Cross-chain USDC and DAI to Polygon ) transaction: approve + cross-chain (
3. Merge USDC and DAI on a certain DEX on Polygon for ) transactions: Approve + Exchange (
4. Deposit LP tokens into the yield pool to earn rewards ) 2 transactions: Approve + Deposit (

This simple flow of funds requires initiating 12 transactions! We must utilize the information provided by the various protocol interfaces to directly interact with the EVM to find, create, and execute each transaction. This process is manual, time-consuming, and cumbersome, especially when dealing with larger portfolio sizes. In retrospect, these tasks essentially only mimic the functionalities of several yield farming applications, but manual operation is extraordinarily complex.

From a higher perspective, all the processes we execute have clear expected outcomes. We have assets and hope to use them to accomplish specific tasks. As in the example above, our goal is to "convert USDC on Ethereum into liquidity tokens for FRAX/DAI on Polygon and deposit them into the staking pool." This is the "purpose" of our operation, and the 12 transactions we must execute are the "methods" to achieve this purpose. A series of clear and logical steps are needed from start to finish, all of which are quantifiable.

If there is a powerful trading routing algorithm, the entire process could be completed in just 1-2 steps. We only need to state the final goal, and the algorithm can plan the optimal path for us, even directly handling the transaction. This path planning structure is called "intention", and it is an important component of the rapidly developing middleware ecosystem in Ethereum. Although the industry has a broad understanding of the concept of intention, a clear definition has not yet been formed. There are some common perspectives currently, such as the definition by an investment institution: "Intention is a set of signed declarative constraints that allow users to outsource transaction creation to third parties while maintaining full control over the transaction." Another industry insider described it as: "Transactions are imperative, while intentions are declarative. In other words, transactions are clearly defined messages that specify how to run the virtual machine to produce state changes, whereas intentions specify the desired state changes without focusing on the specific implementation process."

In these two definitions, intent is described as "declarative", meaning that it seeks external assistance through data sharing between the user and the "solver". Users declare the desired outcome, and the solver provides them with a means to achieve it. Unlike transactions with specific parameters, intent must be path-planned by a third party. Additionally, there are constraints that limit the set of possible paths. This helps narrow down the total number of possibilities to a smaller, filterable set for users to choose from. In the case of my friend, the intent system allows us to broadcast the final goal to a group of solvers, which calculate the optimal path. We can then choose the most cost-effective route and execute the transaction. All intermediate steps will be handled by the route provided by the solver, and the user only needs to confirm 1-2 transactions.

![Why might Intents be the answer to the complexity issues of DeFi?])https://img-cdn.gateio.im/webp-social/moments-4cb7471082b5b193378e0c9ad50873d5.webp(

The basic architecture based on "intention" already exists in the current blockchain ecosystem. When you use any decentralized exchange, it will look for the best execution path for your trade. In some trading interfaces, after selecting the assets to buy or sell, the system automatically finds the best liquidity pool for routing. For example, since there is no direct USDT/frxETH trading pair, the order may pass through multiple intermediate pools to achieve the best execution path: USDT > sUSD > sETH > ETH > frxETH, all completed in a single transaction. The system will also roughly estimate price impact and provide suggestions to limit slippage. Once the parameters are selected, the interface can also help construct the raw transaction data for broadcasting.

This simple intent operation on the exchange is just a very basic example. The interface is merely a practical tool used to construct swap trades through specific logic. For example: exchanging 100,000 FRAX for at least 999,000 USDC, using a FRAX/USDC liquidity pool with a 0.05% fee, valid until a specific block. In contrast, the intent system will share the desired outcome ) to obtain the maximum amount of USDC ( and the constraint ) to only sell 100,000 FRAX (. It is up to the solver to determine the best swap solution.

If you have ever used certain trading aggregators, you will see an intent system used to build swap trades. With such tools, you still need to provide all execution parameters and then receive a set of potential trade execution solutions. These solutions may be executed on the same platform, but depending on different relayers, there will be different fees and gas costs. Ultimately, the user chooses the best price/cost solution.

In addition to trading aggregators, there are several other types of "intents" on Ethereum:

1. Limit Order: Allows for asset withdrawal from the account if conditions are met.
2. Decentralized Auctions: Third-party order execution based on non-exchange liquidity.
3. Gas Sponsorship: Allows the use of specific tokens to execute third-party transactions, applicable to account abstraction wallets.
4. Delegation: Whitelists belong to this situation, where a check is performed on the database before executing the transaction.
5. Transaction Batch Processing: Allows for batching of Gas efficiency intentions.
6. Cross-chain exchange: See certain cross-chain protocols.

Although the types of orders are becoming increasingly diverse, the simplest way to describe their intention might be "an upgraded version of a limit order". A limit order refers to the intention to buy a specific quantity of an asset at a specific price, which will only be executed once the other party accepts the order.

Similar to limit orders, the intent consists of two parts. The first part is the desired final state of the user. The second part is the transaction initiated by the solver. By combining the two, you can obtain the complete content needed to execute the transaction.

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Sell MEV

The design based on intent architecture involves almost no risk. First, the solver has an incentive not to propagate MEV intentions that they can profit from. "In many cases, extracting MEV requires executing user orders on-chain. In these cases, the execution of user orders exposes the blockchain state, which extractors can exploit for profit. Backrunning and sandwich trading are common examples."

The core feature of intent is data exposure. By signing an intent message, you indicate your willingness to extract MEV at the cost of convenience. Since intents cannot be directly broadcasted to the blockchain memory pool where ) transactions are queued before execution (, they are stored in private off-chain intent pools. These intent pools can be permissioned, permissionless, or a mix of both.

The permissionless intent pool uses a decentralized API, allowing nodes in the system to freely share intents and grant executors unrestricted access. For example, certain protocol relayers and proposed shared account abstract memory pools. Open memory pools are susceptible to DDoS attacks and cannot ensure the prevention of bad intent propagation.

In contrast, the permissioned intent pools utilize trusted APIs, which can resist DDoS attacks and do not require intent propagation. By relying on trusted intermediaries, as long as trust is maintained, they can ensure execution quality. Such intermediaries usually enjoy a good reputation, which incentivizes them to ensure top-notch execution. However, they still have a strong trust assumption, which undermines the core spirit of open blockchains.

Hybrid solutions bridge the gap between permissioned and permissionless systems. They may adopt a combination of permissioned dissemination and permissionless execution, or vice versa. Certain order flow auction protocols, for example, use trusted parties ) to match orders off-chain ( to operate auctions, but participation is permissionless.

The most popular intent pools currently are centralized and permissioned, with no incentives to share information with competitors. The risk here is that one party absorbs most of the intent-based transactions and uses its monopolistic position to start introducing fees and other rent-seeking behaviors, with users who have negotiating power disappearing into the grasp of exploitative intermediaries.

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Middleware Risk

When considering intent as a limit order, we can make a clear comparison with the order flow payment )PFOF( from certain trading platforms.

These types of brokerage firms offer users "free" trading, based on the fact that users can sell order flow instead of sending it to traditional exchanges. Market makers are companies that buy and sell large amounts of securities, and they provide this payment because they can profit from the bid-ask spread of the orders. Critics widely point out that PFOF presents conflicts of interest. While brokerage firms are obligated to provide best execution for their clients' orders, the monetary incentives of PFOF are said to influence their decisions on where to send the orders.

The intention is a form of PFOF arbitrage, which we call MEV. The arbitrage opportunities created by the long unclosed order ) and part of the order ( may be more valuable than the transactions manually added to the blockchain mempool, as the solver can determine the route rather than competing with sandwich trades to obtain MEV before or after the trade in a given block.

Unchecked and opaque solvers are highly likely to provide the worst routes, as their profit margins are inversely proportional to good execution. Users still need to choose solvers, and they can leverage this negotiating power to force solvers to compete for order flow. The solver that brings the highest returns to users under constraints wins the auction.

Some protocols have adopted this design, using batch auctions to find the best settlement price for traders. In such systems, orders are not executed immediately, but are collected and settled in batches. The system does not use a central operator but instead relies on public competition among solvers to match orders. Once the batch is completed, these solvers submit solutions for settling the orders.

Batch auctions allow transactions within a batch to have the same price, eliminating the need for miners to rearrange transactions. There is no front-running or back-running. Certain protocols use order flow auctions to ensure traders receive the best price execution. However, some of these orders contain MEV, as market makers must be able to engage in arbitrage trading in another venue to remain profitable.

![Why Intentions (Intents) Might Be the Answer to the Complexity Issues of Decentralized Finance?])https://img-cdn.gateio.im/webp-social/moments-e236765e6a4558a5c6049dbdc8ddb341.webp(

Future Outlook

Currently, some protocols are developing intent-based infrastructure to allow