SevenX Ventures: Decoding Intents, How to Completely Change Web3 User Experience and Order Flow Patterns.

Original Title: "Decoding Intents: Revolutionizing Web3 User Experience and Orderflow in Blockchain"

Original Author: Grace Deng, SevenX Ventures Research

Original Translation: Kaori, Luccy, Joyce, Sharon, BlockBeats

With the gradual popularization of Web3 technology, it is crucial to ensure that users can independently cope with the complexity of Web3. Unlike the early days of blockchain, users no longer need to decipher complex technical details. The future trend is to provide a user experience that guides and empowers users to seamlessly interact with decentralized systems. Following the development path of Web2, user needs are becoming increasingly diverse and expressed through search engines and chatbots like ChatGPT. Web3 must provide a user experience that is easy to use yet powerful in functionality.

· Result instead of path: Users only need to express what they want, without worrying about how the implementation of the result is achieved.

· Conditional authorization instead of code authorization: When users sign a blockchain transaction, they authorize the ability for the transaction code to execute arbitrary computations and modify the state of the blockchain. In contrast, when users approve an intent, they are authorizing the release of their assets and tips after ensuring that the desired outcome has been achieved (similar to cash on delivery in online shopping).

· Competitive solver rather than trusted dapp: In a transaction-dominated world, users interact with their chosen dapps, which serve as service providers to provide users with expected results, usually long-running mainstream dapps like Uniswap. In an intent-dominated world, well-known or unknown solvers (solvers) on and off the chain compete with each other to achieve users' intent and receive rewards. From an economic perspective, the more intense the competition, the higher the efficiency.

In short, users can express their intent clearly and directly; the platform can use solvers and executors to find the best execution path to achieve the user's goals. Just like in Web2, the black box works behind the scenes to optimize results, Web3 executors can use algorithms and automated processes to handle the complexity of execution, ensuring that users efficiently obtain the desired results and receive rewards.

By prioritizing user experience and focusing on expressing intent, Web3 can usher in a new era, making the power and potential of decentralized systems accessible to everyone. The future of Web3 lies in democratizing access, simplifying interactions, and guiding and freeing users through a decentralized landscape to achieve a seamless user experience.

Explore different types of intent implementation

Intent can be classified into different types based on their generality, as shown in the following figure:

In fact, various intents are everywhere, because blockchain code = some degree of automation = extracts a certain complexity and returns the expected results to users. However, we hope to have the most universal intent in the future. AA+ specific intent applications are not enough because they cannot run across domains and cannot be effectively extended like more permissionless intents.

To understand how intent works, we can analyze the currently available solutions, from specific intent applications to general intent infrastructure like Anoma and SUAVE. This analysis will be divided into 5 main parts, focusing on different issues.

· Intent Expression and Authorization: How users input their intent; what types and levels of intent can users express; what kind of authorization will users give?

· Candidate solver: Is it licensed or unlicensed? Are there high standards for becoming a solver? Are there different types of solvers that focus on other specific fields?

· Solution process: What is the main approach to solving the problem? What determines when the intent is completed?

· Solver Selection: What are the rules for selecting the winner from several candidate solvers? Is it winner-takes-all or a discrete competition mode?

· Verification and Settlement: How to check if the solver has completed the task? How do users and solvers settle accounts?

Here is a comprehensive overview of the current solution. For more detailed information, please delve into the following content.

Cow Swap & 1inch fusion（限价单 intent）

Cow Swap & 1inch fusion (Limit Order Intent)

Intent Expression and Authorization

Cow Swap and 1inch Fusion traders express their intent through interaction with the platform's interface, providing clear instructions for desired trades or limit orders.

Regarding authorization, traders sign off-chain messages or transactions to grant permission. They pay fees with transaction tokens instead of using ETH to pay for gas fees, and there are no costs if the transaction is not executed.

候选 solver

translates to

Candidate solver

in English.

Regarding the situation of 1inch Fusion, solver is equivalent to resolver and operates without the need for permission. They need to register, go through the KYC verification process, and maintain sufficient balance to pay for order fees.

Meanwhile, Cow Swap's solver is either whitelisted by creating a million-dollar binding pool (USDC & Cow), or included in Cow DAO binding pool or Gnosis DAO binding pool, and whitelisted by Cow DAO according to DAO standards.

求解过程

translates to

Solution Process

in English.

Solver evaluates existing transaction packages to determine any coincidences of demand (CoW) that can provide the best price for executing transactions or limit orders. They consider various factors such as liquidity, order book depth, and price slippage to ensure the best execution for traders.

In addition, the solver can directly explore other potential on-chain automated market makers (AMMs), such as Uniswap, or utilize DEX aggregation platforms like 1inch to discover the optimal price and path.

Solver Selection

At Cow Swap, traders execute trades at the best price determined through batch auctions using any external solver, maximizing their profits. The solver that provides the optimal solution will be selected.

Compared to 1inch, the resolver competition of 1inch Fusion is more restricted and related to the 1inch token that is pledged using a Dutch auction.

UniswapX（Swap Intents)

solver selection

Account Abstraction (Wallet Layer Intent)

In the AA framework, binder services are considered public products. Most binders are open source, which makes them non-exclusive and non-competitive, and any RPC endpoint can copy open source code and run it as a binder. Even if the binder RPC endpoint wants to charge for its services, it can do so through an API key and maintain the non-exclusivity of the binder as a public product.

There are two main types of bundlers, including bundler services specifically built for wallets to meet their basic needs, and modular bundlers that provide third-party infrastructure services without permission.

The bundler simulates the validateOp method of the wallet on userop to determine whether to accept or reject off-chain, and then sends the transaction to the entry point of the AA system to call the handleOp method. The process also includes bundling multiple user operations together to optimize gas fees and extract MEV.

solver selection

Essential (Intent-Centered Account Abstraction Standard)

Intent Expression and Authorization

Dapps or wallets that adopt the Essential standard can provide users with intent-supported services and eliminate potential complexity. Users only need to interact with the interface and authorize it. Intents can be expressed in the short term using the Essential standard, or in the long term using its new constraint-based language for more general expression. Compatible with EVM chains, no need to bridge funds.

候选 solver

translates to

Candidate solver

in English.

A network composed of solvers will monitor and strive to achieve these intents. Essentials is considering existing solvers or bundlers such as those from the CoW protocol or 4337, as well as MEV searchers and market makers.

The solver identifies the constraint environment they are solving for, and then attempts to solve these constraint-based intents both off-chain and on-chain.

The selection process is more like a Dutch auction, where the user specifies the constraints and the solver decides when to enter based on the extractable value. The first solver to enter and solve the intent will be the selected solver and may be the best solution that the market can afford at the time.

Verification and Settlement

Validation and settlement are triggered by the solver to verify and split fees through specific on-chain smart contracts. There will be a core contract where all solutions and intents will be submitted, and Essential can be used for extension.

Compared to the way smart contracts solve the intent in the previous example, SUAVE uses a dedicated chain for settlement, which also serves as a messaging layer. Unlike Account Abstraction (AA) and specific intent applications, SUAVE's multi-chain capability allows it to introduce an additional step of bridging funds to the SUAVE chain, which can also achieve better cost-effectiveness and enable transactions with enhanced privacy.

SUAVE has just announced the launch of MEVM, a powerful modified version of the Ethereum Virtual Machine (EVM) that includes new precompiled contracts for executing Miner Extractable Value (MEV) related use cases. With MEVM, the SUAVE chain will effectively serve participants in the MEV space, such as searchers, developers, and others looking to capture MEV.

Intent Expression and Authorization:

SUAVE users express their intentions in SUAVE by writing EVM code. These codes outline the expected results and functionalities they wish to execute by defining a list of contracts that allow access to user confidential data. There may be available templates suitable for ordinary users.

Through MEVM, developers can deploy different types of smart contracts for specific MEV applications (such as OFA, Block Building, etc.), or deploy new DEX on SUAVE for other users to call.

The user bridges funds to the SUAVE chain and deposits a tip.

候选 solver

translates to

Candidate solver

in English.

In SUAVE, the main participants who serve as solvers are likely to be searchers and builders. Searchers and other solvers are responsible for exploring and discovering potential solutions to meet user intent, while builders focus on implementing these solutions. Together, they work to build a powerful ecosystem for solving user-expressed intent. To meet the block-related intent in different fields, there may be many solvers with specialized skills in different fields to support different virtual machines (VMs).

求解过程

translates to

Solution Process

in English.

Solver performs trustworthy and private off-chain computations, which can be used for smart contracts on SUAVE through special pre-compilations in TEE environment. Solver works together to build a block containing a set of intents. The purpose of block construction is to aggregate and organize these intents into valuable blocks, which can then be proposed to the network.

solver selection

In SUAVE, the selection of solvers follows two main methods. First, solvers that are expected to complete the task first are usually chosen. This improves the efficiency and timeliness of delivering solutions. Alternatively, an order flow auction mechanism can be implemented, where solvers bid to the user and return part of the order flow value to the user.

Verification and Settlement

To ensure the effectiveness of intent and settle transactions, SUAVE uses oracles and SUAVE validators. Oracles provide external data to verify the execution of intent, while SUAVE validators verify and settle intent on the SUAVE chain.

Anoma (Anoma Protocol's General Intent)

Anoma welcomes solvers of all types, with each solver specializing in different types of applications. These solvers monitor memory pools that align with their interests and goals. Depending on their specific focus, they may observe all intents or a subset of intents.

Verification and Settlement

Before delving deeper, I want to summarize two trends in the intent field: first, major DApps focusing on specific types of intent, such as Uniswap and Cow Swap, are expanding their intent capabilities by introducing solvers themselves. This means they are collaborating with roles that focus on solving specific problems (solvers) to provide more extensive services. Second, more general intent requires relatively new architectures, including new intent languages and new virtual machines. Projects such as Essential, Flashbots, and Anoma are working towards this direction. This means that new technologies and tools need to be developed to meet more general intent and adapt to different types of needs.

In this case, different types of intents may be handled by specific platforms or protocols. For example, transaction intents can be handled by UniswapX and Cow Swap; intents with a single domain and wallet-related features can be handled by Account Abstract (AA) wallets or DApps and wallets compatible with Essential; while platforms like SUAVE and Anoma may handle more general and multi-domain intents.

In this new world, the order process for intent may follow a more complex path. Let's explore a possible order process:

用户表达 intent、存入资金并授权

User expresses intent, deposits funds, and authorizes

Please note that Anoma can have multiple memory pools to serve different types of intents and is trusted by different DApps or protocols.

solver conducts off-chain simulation and competes to solve intent

In the AA ecosystem, bundlers perform simulations and bundling tasks. Then, the bundled intent can be sent to the public memory pool for searchers to untangle and potentially perform preemptive operations, or directly sent to trusted builders. In the early stages, small bundles may be more effective as they can be privately sent to trusted builders to avoid potential losses. As 4337 wallets and other participants with sufficient order flow enter the market, they can operate as bundlers like searchers.

Verification of intent completion

Currently, there are various validation methods, each with its own set of trade-offs. Using smart contracts for validation is reliable but often lacks scalability as different intents require specific validation logic and code. Relying on oracles for validation introduces risks associated with the oracle, but offers the advantage of seamless integration with multiple chains. Utilizing the Anoma virtual machine requires intent applications to adopt the Anoma framework, but provides the ability to validate various intents.

In short, in the intent-centric world, the order flow is different from the transaction-centric world: users sign and authorize transactions vs users have more choices to express their intent; there are single memory pools and multiple memory pools for different purposes; Dapps are responsible for execution vs a resolver chooses to join as a new role and solves problems in a competitive way; different chains settle one by one vs multiple chains can settle together (new cross-domain execution).

Intent 对 Web3 世界的涟漪效应

translates to

Intent's Ripple Effect on the Web3 World

Upstream

链

A new chain like SUAVE can enable more frequent and cost-effective Intent settlement.

L2 or higher scalable chains are suitable for performing low-cost computations related to Intent logic expression, validation, and settlement, as the entire process requires a significant amount of computational resources due to the expressiveness of Intent itself.

Oracle

Oracle now has an additional feature: to assist in verifying the implementation status of Intent.

Universal standards help reduce the fragmentation problem caused by different types of Intents; Solvers can more easily integrate applications that support Intents; dapps and developers can more easily expand into the Intent system. Intents also avoid rebuilding common Intent infrastructure.

Midstream (potential solver)

Searcher: Searchers possess professional knowledge in routing and advanced algorithms, which makes them highly valuable in solving problems, finding the best solutions, or obtaining liquidity-related intents.

Downstream

Intent has a wide impact on various dapps - enhancing user-friendliness, bringing about large-scale adoption, increasing participation from multiple parties, and bringing more off-chain components, improving efficiency and flexibility. Dapps can integrate more complex functionality through the integration of Intent solver to provide more features and capabilities.

For example, in DeFi, intent can be executed through the help of a third party (solver) to simulate atomicity in cross-chain environments. The solver takes on the risk of failure, thereby achieving a new field of cross-domain DeFi.

Additionally, more interactions and user commands can facilitate the development of complex dapps. For example, in GameFi, users now have more gameplay options:

Custom game strategy: Intent allows players to define and execute custom game strategies. They can express game objectives and actions in their own way and let the solver execute these Intents in the game. This provides players with more freedom and control;

Support for economic system: Through Intent, players can participate in the in-game economic system, such as trading game assets, providing liquidity, or participating in lending. By expressing their Intent, players can perform financial operations similar to DeFi within the game and receive economic rewards.

Conclusion

However, I would like to draw everyone's attention to the potential centralization issues that Intent may bring. As we have seen in the cases of private memory pools and private order flows, players who are able to handle complex user Intent and provide more efficient and user-friendly experiences may stand out, attracting more private Intent order flows and leading to better execution and more order flows.

In addition, how Intent players can effectively implement solvers for users is also a practical issue. For example, for the current small-scale AA transactions, packagers or builders may not have sufficient motivation to spend extra time and effort to provide new services. This problem may also exist for more expressive Intents.

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