Introduction

Transacting using blockchain solutions is thus far overly complicated for retail users. A user may know what they aim to achieve, but a plethora of complex steps stand between them and the realization of their intentions. Recently, a solution to this problem known as intent-centric design has caught the attention of the blockchain community. With intents, users can describe their desired outcome, rather than denoting every step required to do so. For example, if a user wants to receive a certain amount of ETH and is willing to pay a certain amount of BTC to receive it, an intent-centric solution would accomplish this without the user having to specify the steps to make such a cross-chain swap happen.

This paper will explore emerging intent-centric designs and how they will streamline blockchain interactions. The lifecycle of an intent, current implementations of intent-centric design, and future applications of the technology will all be explored in detail. In addition to assessing both the risks and challenges of intent-centric systems, this paper will assess the flow of value within them, providing a thorough examination of an innovation that is rapidly changing the blockchain landscape.

User Intents to Simplify Blockchain Interactions

The complexities of transacting with blockchains create an unfair playing field where only the most savvy users stand to profit. Sophisticated actors such as market makers, high-frequency trading firms, and MEV searchers compete to extract maximal profit by leveraging their access to advanced resources, systems, and algorithms.

Intent-centric designs stand to even the playing field and simplify the way that users transact on-chain while making the entire system more capital efficient. For sophisticated actors, the transition to becoming solvers in an intent-centric system is not a major pivot, given their existing capabilities. Intent-centric systems offer better UI, enhanced handling of gas fees and slippage, and increased composability.

Once users only need to describe what they want to achieve, it becomes far easier for them to achieve their goals. The user need not know or understand the underlying processes required to achieve their goals; they just need to know what they want the end result to be. This makes transacting on-chain more accessible to the average participant. Empowering users with improved interfaces and ease of use may result in increasing demand for blockchain systems, leading to an increase in overall liquidity and a more robust blockchain ecosystem.

Diving in deeper, intent-centric systems eliminate common pains experienced by users in handling gas fees and slippage. For example, in a traditional blockchain transaction, users must pay a gas fee, which is likely a foreign experience for novice users who are used to such fees being abstracted in traditional financial systems. Account abstraction (ushered in through ERC-4337) allows flexibility over gas fee payments by enabling users to pay gas fees using any ERC-20 token, or by empowering protocols to sponsor and pay gas fees for their users. This not only simplifies interactions but enhances control over transactions. An intent-centric system can optimize gas fees for each transaction required to achieve the users’ desired result, without them needing to painfully estimate the gas necessary to do so. Similarly, users generally suffer when estimating slippage. An intent-centric system can abstract and optimize slippage settings and trade timing to minimize price impact for the user.

The Lifecycle of an Intent

While intents streamline the transacting experience for users, they are technically complex under the hood. There are a variety of different teams building intent systems, but the general flow of an intent-centric transaction is as follows:

Image from Flashbots’ article “The MEV Supply Chain: a peek into the future of this industry”

1. Off-Chain Submission: Users utilize a wallet to submit an intent.

2. Arrival in the Mempool or Direct Block Builder Submission: Transactions may either arrive in a mempool or be sent directly to block builders for faster execution. The choice between an alt mempool, a standard mempool, or bypassing the mempool altogether depends on the specific requirements of the intent. For instance, high-value swaps, especially those following the ERC-4337 standard, are often designed to bypass the public mempool entirely. This is to mitigate the risks associated with predatory MEV practices like front-running and sandwich attacks. Instead, these transactions are directly sent from bundlers, who often act as block builders, to ensure a quicker and more secure transaction process.

3. MEV Searchers Find Opportunity: If a mempool was utilized for the transaction, MEV searchers see data in the mempool and look for the optimal route for intents to be realized and where there is an opportunity for profit to be made. MEV searchers can choose to solve the transactions themselves, or they can sell the information they’ve found to “solvers.” In most cases, MEV searchers not only discover opportunities but also simultaneously act as solvers themselves.

4. Solvers Compete for Optimal Transaction Execution and Bundle Intents: Solvers act as market makers as they compete to provide users with the best transaction execution. Users naturally seek the cheapest and quickest solution to their intents, and the solvers that can provide that earn a fee. Solvers aggregate multiple intents into bundles, enabling them to be executed within a single transaction, and then forward these bundles to block builders for potential inclusion in upcoming blocks.

5. Block Building and Validation: Block builders select bundles and package them into blocks. These blocks are then sent to validators for inclusion on-chain. This stage represents the final assembly and validation of intents, ensuring that they are correctly executed and recorded on the blockchain.

Live Intent Implementations

Early forms of intent-centric design are already seen in applications and blockchains today. Notable projects include:

CoW Protocol + CoW Swap

CoW Protocol is a permissionless trading protocol that utilizes Batch Auctions to discover prices. Liquidity is maximized by finding a Coincidence of Wants (a situation in which two users each have something that the other desires) and tapping into all available sources of on-chain liquidity. Unlike traditional trading protocols, CoW Protocol has solvers that compete to provide users with the best realization of their intents.

CoW Swap is a front-end interface for CoW Protocol, developed by the same team. It is a decentralized exchange (DEX) using an intent-centric approach to find users the lowest prices on trades from all DEXes and aggregators. Further, CoW Swap’s intent-centric design protects users from front-running and other MEV-related pains. CoW Swap’s new feature, CoW Hooks, leverages intents by enabling developers and advanced traders to code custom actions (such as trading, bridging, staking, depositing, and more) that execute directly before and/or after trades, all within a single transaction.

Soul Wallet

Soul Wallet (one of NGC Ventures’ portfolio companies) is an upcoming user-friendly smart contract wallet that leverages account abstraction to provide flexibility in gas fee payments and sponsorships. It also enables Social Recovery capabilities, a security mechanism utilized to recover a crypto wallet without the use of a seed phrase. A majority (e.g., 3 out of 5) of other wallets owned by the user or their trusted friends and family members, called “guardians,” can sign off on the recovery of a wallet to help a user regain access to it. In addition to Social Recovery, Soul Wallet offers two-factor authentication to allow users to designate another wallet to approve transactions. In addition, Soul Wallet abstracts away underlying blockchain mechanics to provide a seamless experience when using Ethereum and its various Layer-2 solutions. Soul Wallet’s One-Click Secure Swap uses account abstraction to let users trade without having to worry about security risks and manual token approvals.

UniswapX

Uniswap’s new product, UniswapX, tackles some of the most pressing challenges in the DeFi space through its intent-centric architecture.

One of the issues UniswapX aims to fix is fragmented liquidity. By aggregating across many liquidity sources, such as Uniswap V2 and V3 pools for various asset pairs, UniswapX aligns with each user’s intent to locate and provide users with the best available prices on assets. This is facilitated by third-party fillers (solvers) who either utilize liquidity from these diverse pools or their own private reserves to fulfill swaps.

UniswapX also brings gas-free swaps to its users by having fillers bear the gas fees on swaps and include them in the swap price. This eliminates the need for users to pay for failed swaps or hold the native network token to cover gas costs, further simplifying the Uniswap user experience.

UniswapX’s intent-centric design is also useful to protect against predatory MEV. For instance, UniswapX reduces value loss for users by returning any surplus generated by an order back to the users in the form of price improvement on their swaps. Additionally, UniswapX’s design protects users from frontrunning and sandwich attacks by solvers through the use of Permit2 and a Reactor Contract, ensuring that swaps align with user expectations and reversing swaps that do not. UniswapX’s use of Dutch auction orders with time-dependent execution encourages competition among fillers to minimize opportunities for predatory MEV practices.

Looking ahead, UniswapX has plans for additional features that align with its intent-driven philosophy. The upcoming support for Uniswap V4 is a noteworthy development, but more groundbreaking is the planned introduction of gas-free cross-chain swaps. Users will have the ability to specify the assets they intend to receive on a destination chain, allowing them to bypass the high fees and delays typically associated with cross-chain transactions.

Upcoming Intent Protocols

Anoma

Anoma (another NGC Ventures portfolio company) is a versatile intent solution under development by Heliax that will enable transactions with conditional agreements. The protocol seeks an optimal match for a user’s intent across blockchains, ensuring that transactions are completed according to a user’s specified conditions. This is achieved through a decentralized counterparty discovery mechanism that removes the need for centralized intermediaries and thereby fortifies the protocol’s alignment with blockchain’s decentralist ethos.

Through distributed solving, Anoma enables users to have their intents realized by a pool of solvers who compete to fulfill them. Decentralized counterparty discovery establishes direct and trustless interactions between parties, while distributed solving leverages the collective computational resources of competing solvers to realize user intents effectively.

In addition, Anoma’s multi-chain atomic settlement capability optimizes the exchange of digital assets across multiple blockchains by condensing the process into a single transaction. This feature eliminates the need to manually conduct a series of transactions, enhancing efficiency and the overall user experience in cross-chain trading.

SUAVE by Flashbots

SUAVE, or Single Unified Auction for Value Expression, is a product developed by Flashbots (another portfolio company of NGC Ventures) that unbundles the mempool and block builder role from existing blockchains and offers a highly specialized and decentralized plug-and-play alternative. SUAVE aims to promote decentralization in block building to reduce the potential for censorship and abuse of power by block builders within the blockchain ecosystem. As of the week of Aug. 25, 2023, the top five largest block builders on Ethereum have built ~90% of blocks, and ~48% of all blocks built have been OFAC compliant. This has led to a situation where users can be and are being censored, which is going against the principles of decentralization and censorship resistance that Ethereum is founded on.

SUAVE is developing the MEVM, a specialized version of the EVM that enables developers to create MEV applications as smart contracts in a flexible and expressive programming environment. The MEVM consists of three main components: a Universal Preference Environment (UPE), which is a chain and mempool designed for expressing and aggregating preferences (intents) across various chains, an Optimal Execution Market (OEM) where executors (solvers) compete to provide the best execution of intents submitted by users, and a decentralized network of block builders that merge encrypted user intents into blocks. This architecture makes it easier to build new MEV applications, promotes competition in solving for intents, and decentralizes the MEV supply chain.

SUAVE’s roadmap (segmented into three stages: Centauri, Andromeda, and Helios), describes their plan to reshape the MEV landscape through intent-centric design. In the Centauri phase, SUAVE introduces a privacy-aware order flow auction, allowing users to reclaim the MEV generated by their transactions. In the Andromeda stage, SUAVE’s mainnet launch will enable users to articulate intents in SUAVE’s Execution Market and SGX-based mechanisms will be adopted to promote efficiency and privacy in auctions and block building. The Helios phase will further decentralize the building network and create the groundwork for cross-domain MEV solutions. This intent-centric approach aligns with SUAVE’s mission to form a neutral home for users, searchers, builders, and validators across various blockchains.

Essential

Essential’s intent-based infrastructure underdevelopment is a suite of three products: a domain-specific language (DSL) for intent expression, a new intent-centric account abstraction ERC standard for Ethereum and the EVM, and a modular intent layer.

As it stands today, intents lack a standardized language to be communicated across blockchain systems. This risks intents being misinterpreted across chains, which can lead to undesirable results such as incorrect token swaps. Essential aims to solve this by producing a domain-specific language (DSL) for intents so that intents can be communicated by users and interpreted by solvers across different systems effectively.

According to the project team, Essential’s new ERC standard differs from ERC-4337 in that it will assign solvers the task of building valid transactions to fulfill intents. The team has not shared further details into the mechanics of this upcoming ERC standard as of Aug. 25, 2023. This new solution will bring the benefits of intent-centric design to EVM-compatible blockchains, taking intents beyond Ethereum via the EVM and creating a smoother experience for the broader blockchain ecosystem.

Finally, Essential aims to go a step further by making a modular intent layer. Intents will be grouped into batches, and the modular intent layer will process each new block as a solution to a batch of intents. Essential’s modular intent layer will promote transparent order flow aggregation by directing all order flow through a unified network of solvers, ensuring that they have access to the maximum possible information to use in solving. Moreover, by encouraging competition amongst solvers to provide users with the best realization of intents, the modular intent layer will be resistant to predatory MEV practices typical of transaction-centric designed systems. This layer being modular will allow the protocol to be integrated into various stacks and ecosystems to create a path toward effective cross-chain intent execution.

Future Potential Intent Applications

There are a number of novel applications of intents under development that will be available to users in the future;

• Conditional Intents will enable actions to be executed based on specific conditions, such as certain governance decision outcomes or prices being reached.

• Continuous Intents will allow for actions to be performed repeatedly through a single intent expression, enabling tasks such as dollar cost averaging or market-making.

• Multi-step Intents will enable a series of actions to be taken by expressing a single intent, in which the completion of an action will prompt the execution of the following action in a sequence.

Intent-centric design can also be coupled with other unique technologies, like AI. For example, by leveraging intent-centric design via account abstraction and combining that with AI, users can enjoy personalized and automated investment strategies. Tailoring blockchain experiences to each user makes operating on-chain easier while opening the doors to new innovative applications and services. Additionally, AI can be used to enhance the capabilities of solvers, helping them to optimize transaction execution and adapt to market conditions more efficiently.

Another interesting potential application of intents is in combination with real world assets (RWAs):

• Intents may be used to connect traditional finance and DeFi by a user declaring their intent to convert traditional financial assets into tokenized blockchain assets.

• Intents could be utilized in lending protocols in which users state an intent to use RWAs as collateral for DeFi loans. A protocol could tokenize the asset for the user and utilize it as collateral without the user needing to specify every transaction needed to achieve their goal.

• Intents can help a user generate yield on RWAs in a scenario where a user declares an intent to earn yield on a tokenized real estate property. A protocol could invest on behalf of the user into a property to earn yield from rental income or appreciation of the property’s value.

Furthermore, intent-centric design has the potential to be applied outside of the realm of blockchain to revolutionize many aspects of daily life. For example:

• An intent-centric solution could aggregate ride-sharing apps like Uber and Lyft, allowing users to express their travel intentions and have the system find the best ride option for the user across multiple platforms.

• When booking flights, an intent-based system could analyze user preferences such as travel dates, preferred airlines, and budget constraints to find optimal flight options to book for a user.

• Online shopping could be enriched through intent-centric design by finding the best deals available across many online stores.

Unlike traditional aggregators like Expedia, which merely compile options, intent-centric systems interpret and consider their users’ underlying wants and needs. While aggregators present a fixed set of choices based on predefined criteria, an intent-centric system actively engages with each user’s unique preferences, dynamically adapting to offer personalized solutions.

Risks and Challenges

Although intents enhance the user experience in blockchain systems, they also come with their own set of risks and challenges. For one, intents rely on the outsourcing of decision-making to third parties — namely, solvers and block builders. This means that users must place a level of trust in these parties and the systems that connect them. Users must beware of solvers and block builders abusing their position to charge high fees for the execution of intents, or prioritizing the execution of intents that offer the highest payment. This could make the system inefficient by causing users to overpay to have their intents executed. Similarly, if a small group of individuals controls a large portion of intent execution, the system faces the risk that those entities could dictate terms, set prices, or censor transactions. This could lead to shrinking competition, higher costs for users, and an overall less decentralized system. To prevent these factors from stifling innovation and ruining the experience of users, crypto users must demand system designs that fight centralization and incentivize good behavior of middlemen through transparency and cryptoeconomic incentives to help promote a credibly neutral ecosystem.

Users interacting with intent-centric systems also risk having their intentions misinterpreted, which can lead to unintended consequences through the execution of incorrect actions. It will be prudent for builders to develop standardized forms of communication for intent-centric systems (such as the universal domain-specific language being built by Essential) to avoid this risk.

Finally, new security threats may arise with the advent of intent-centric systems. These include accidentally granting unauthorized access to accounts, data leakage that could lead to user privacy breaches, and information leakage that could allow other traders to front-run or manipulate the market. In this landscape, it’s naive to expect solvers to act altruistically. Just as MEV searchers today exploit the system for profit, solvers in intent-centric systems will also be motivated to cheat if it’s financially beneficial for them. Therefore, responsibility falls on the architects of these systems who are tasked to build a framework that discourages malicious behavior while encouraging optimal execution for users.

The Evolving Flow of Value in Intent-Centric Systems

In intent-centric architecture, the profit motives of MEV searchers, solvers, block builders, and validators are aligned with the optimal fulfillment of user intents. As it stands today, the value in intent-centric blockchain systems predominantly flows to MEV searchers, solvers, and block builders, as they work together to interpret and execute the best possible outcomes for users while simultaneously profiting from the process.

It is clear that MEV searchers and solvers accrue value. They are the entities that see intents first, and they are the ones that spot the greatest value in a single loose intent or a potential grouping of intents that they can batch. The solvers effectively act as market makers because they are competing to provide users with the best swap. Users naturally want the cheapest and quickest solution to their intents. Solving intents optimally is not just a service but a lucrative opportunity for these entities and is expected to incentivize them to provide the best possible results. The alignment of interests between users, MEV searchers, and solvers helps the system to operate efficiently and transparently, promoting a competitive environment that benefits all participants.

A substantial portion of the value flows to block builders as well. Block builders, being responsible for constructing and finalizing blocks, play a key role in bringing each user’s desires to fruition. As searchers, solvers, and users rely on block builders to realize intents, the role of a block builder is especially valuable to all participants, especially as the system becomes more complex.

However, ever-increasing competition amongst searchers, solvers, and builders is expected to shift value back to validators, stakers, and users, reflecting the ever-evolving nature of the MEV ecosystem.

Validators and stakers stand to gain immensely from heightened competition between searchers, solvers, and builders. As more and more solvers, searchers, and builders join the MEV landscape, profit margins decrease. When combined with increasing transparency in on-chain intent-centric architecture and parties copying each other’s algorithms, gas fees may end up eroding most of the profits a solver may hope to gain. It’s crucial to note that value doesn’t vanish; it gets reallocated to validators and stakers. This change is healthy and essential for the network’s long-term stability. A well-compensated validator pool raises the network’s security budget, while higher staking returns incentivize further staking to heighten overall network security.

Moreover, as the system becomes increasingly efficient and competitive, users — the originators of transactions — stand to benefit as well. Decreasing solver profits and gas fees enable users to execute their intents at a lower cost. Additionally, heightened competition among solvers to provide optimal execution results in better prices and quicker transactions for users.

Closing Thoughts

The paradigm shift towards intent-based architecture in blockchain is more than just a technological advancement; it is a philosophical change focusing on user desires in lieu of complicated actions. Intent-centric systems offer a path toward a composable blockchain landscape that prioritizes user needs, efficiency, and transparency. Crucially, the enhanced UX brought about by intent-centric design can accelerate the adoption of consumer crypto applications, bridging the gap between complex blockchain technology and everyday users. This study offers a glimpse of a future where the alignment of interests between users, MEV searchers, solvers, and block builders simplifies interactions with blockchains and advances the overall crypto ecosystem. By prioritizing the realization of user intents above all else, developers pave the way for a more fair and user-focused blockchain landscape, where the flow of value is linked to the fulfillment of human intentions. The rise of intent-centric design marks a transformative moment in blockchain and the start of a new era, transforming a complex technological maze into a user-driven frontier.

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