Principles, current applications, and risk management of Intent.

2023-09-11 21:00

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This article will briefly introduce the principles, current applications, potential risks, and response methods of Intent.

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Source: Ebunker Chinese

Recently, there has been a heated discussion in the Ethereum community about Intent and its applications. This article will briefly introduce the principles of Intent, its current applications, potential risks, and countermeasures.

If Transaction refers to how to perform the behavior, then Intent refers to what the expected outcome of the behavior is.

If the instruction of Transaction is:

"First perform A operation, then perform B operation, then pay C to obtain D."

So the corresponding Intent is:

"I have the ability to make payment, and I want to obtain D."

An Intent-centered protocol can significantly improve user experience and efficiency. Transactions require users to explicitly specify each parameter, which can be a high barrier to entry. In contrast, by using Intents, users can simply express the desired outcome and outsource the task of achieving the best implementation results to mature third parties.

Although Intent provides more possibilities for the ecosystem, Intent-based design on the Ethereum blockchain may also have a significant impact on off-chain infrastructure, and there is important connection with MEV-related activities and market control.

Intent Working Principle

Currently, the standard method for users to interact with Ethereum is to create and sign transactions and specific formats of information that provide all necessary information for EVM to execute state transitions. However, creating transactions can involve quite complex operations. Creating a transaction requires a lot of detailed operations regarding smart contracts and things like nonce management, while holding specific assets to pay for gas fees. Due to the complexity involved, users experience poor user experience and reduced efficiency as they need to make decisions in situations where there is insufficient information or complex execution strategies.

The goal of Intent is to reduce the burden on users. Intent allows users to outsource transaction creation to third parties by signing a set of descriptive constraints, without giving away complete control.

In the process of standard transaction-based flow, when validators are incentivized to perform verification, transaction signatures allow validators to accurately follow the calculation path for a specific state. In contrast, Intent does not specify exactly which calculation path must be taken, but allows any operation that satisfies specific constraint conditions. By signing and sharing Intent, users effectively grant the recipient the authority to choose the calculation path on their behalf (as shown in the figure below). It is worth noting that a single transaction can contain multiple Intents, which can match overlapping Intents, saving gas fees and improving economic efficiency. In addition, users can also pay gas fees more flexibly, such as allowing third parties to sponsor gas or paying with other tokens.

As shown in the figure, when submitting a transaction, the user specifies the exact calculation path; when submitting an Intent, the user specifies the target and some constraint conditions, and the Matchmaking determines the calculation path to be taken.

Intent Application Status

Creating an Intent can outsource complex interactions with the blockchain while allowing users to maintain custody of their assets and cryptographic identities. In fact, many concepts about Intents correspond to systems that have been running for several years, such as the following scenarios:

Restricted Order: If the user receives at least 200 B tokens, they can withdraw 100 A tokens from their account.

Cowswap-style auctions: Similar to limit orders, but rely on third-party or mechanisms to match multiple orders to maximize execution quality.

Gas Sponsorship: Users can choose to pay transaction fees in USDC instead of ETH, and have USDC in their account to pay for gas fees.

Delegated authorization: Only allows interaction with specific accounts in certain pre-authorized ways. The Intent can only be realized if the final transaction follows the access control list specified in the Intent.

Merge transaction processing: Allows for the merging processing of multiple Intents to improve gas efficiency.

Aggregator: Operates only using the best price/yield, aggregates multiple scenarios through proof execution, and takes the best path to achieve Intent.

Currently, Intent has new applications in cross-chain MEV (such as SUAVE), ERC4337 account abstraction, and Seaport order scenarios. While ERC4337 is developing, other new applications (such as cross-domain Intent) are also entering the exploration stage.

In all intent-based applications, there needs to be at least one group that understands intents and is motivated to execute them in a timely manner. As for who plays this role, how it is executed, and its incentive measures, further exploration and practice are needed to determine the effectiveness, trustworthiness, and other impacts of intent-driven systems.

Intermediaries and Mempool

The most obvious way to put Intent into the hands of willing intermediaries is through Ethereum's Mempool. However, the current Mempool design does not support the propagation of Intent. In the long run, considering the potential for DOS attacks, the possibility of widespread support for propagating Intent in the Ethereum Mempool is very low. It can be said that the openness and permissionless nature of Ethereum's Mempool pose obstacles to the adoption of Intent.

Without an Ethereum Mempool, Intent system designers face some problems. The current dilemma is whether to propagate the Intent to the permissioned party or to make it executable in a permissionless manner so that any party can execute the Intent.

As shown in the figure, Intent flows from the user to the licensed/unlicensed public/private Intentpool, and then is converted into transactions through matchmaker, and finally converted into the public Mempool, or directly displayed on the chain through MEV Boost auctions.

The bottom line of this solution is that applications based on Intent not only involve new message formats that interact with smart contracts, but also require propagation and adversary discovery mechanisms in the form of alternatives to the mempool. Currently, the most critical aspect is to design a compatible incentive mechanism that maintains both decentralized Intent discovery and matching.

Risk and Its Response Methods

Although Intent is an exciting new paradigm in the transaction industry, its widespread adoption also means a trend towards accelerated user activity shifting to alternative Mempools. If mismanaged, this transition could harm Ethereum's decentralization and lead to excessive power for trusted parties. There are several potential risks:

Order flow: If the execution of the Intent is permitted, but the user chooses it carelessly and migrates it from the public Mempool, it may make Ethereum block production centralized.

Trust: As many solutions require trust in intermediaries, this high barrier to entry hinders the development of intent-based new architectures, reduces innovation and competition speed in order to ensure the quality of Intent execution.

Transparency: Due to the fact that many Intent architectures require users to relinquish some control over their chained assets and permissions in the Mempool as a compromise, there is a certain degree of impermeability to the outside world, which means that there is a risk of opacity in the system. In this case, it is unclear how user expectations are being met and whether there are undiscovered threats to the ecosystem. Even the middleware and Mempool ecosystem that develops between users and the blockchain can become opaque.

So, how can we reduce the above risks? We know that the space of Ethereum Mempool is limited. For some applications, the risk is caused by their lack of privacy, so they cannot support a wider range of message formats. This puts wallet and application developers in a dilemma because they must find a way to connect users to the blockchain while avoiding the above risks.

The ideal system should be permissionless so that anyone can match and execute Intents without sacrificing too much execution quality. The system should be universal so that new applications can be deployed without the need to establish a new Mempool. The system should be transparent so that the process of executing Intents can be publicly reported, and data for execution quality audits can be provided when privacy guarantees allow.

Although teams like FlashBots and Anoma are working hard to meet the requirements of the above universal solutions by combining privacy and permissionlessness, it is difficult to create such a perfect system in the near future. Therefore, users need to weigh their options and choose different solutions for different applications. Similarly, applications that initiate Intentpool need to seek universality without permission, and choose intermediaries carefully with permission.

Designers of Intent-based applications need to fully consider the off-chain implications of their applications, as they not only affect their user base, but also involve a wider community. This requires a wider community to pay close attention to the off-chain ecosystem surrounding Ethereum.

Summary

Due to the significant market demand for Intent applications, many Intent-based applications have been widely used for several years. More and more Intents are driven by ERC4337, which may accelerate the transition from the Ethereum Mempool to new locations. The adoption of Intents represents a shift for users from a "forced operation" paradigm to a "descriptive" paradigm, which is expected to greatly improve user experience and efficiency.