The intent system may solve the complexity issues of Decentralized Finance.

Before the collapse of Luna, I was managing a stablecoin yield strategy for a friend to take advantage of the exceptionally high interest rates at that time. This friend is not well-versed in cryptocurrency, and our collaboration model is that he deposits funds into a hardware wallet, and then we hold regular video meetings where I gradually guide him through the process.

We will distribute funds across multiple DeFi protocols on various chains. In each meeting, we need to perform a large number of operations such as approvals, transfers, exchanges, deposits, and withdrawals. Funds are spread across various incentive projects such as customized liquidity pools and lockups. We have almost used all cross-chain bridges, DEXs, and yield aggregators to seize various earning opportunities.

This process is exceptionally cumbersome. I need to explain each step in detail, while my friend needs to get familiar with the interfaces of various complex DeFi tools. The meeting was filled with instructions like "click here", "go there", and "exchange this". For example, it takes 12 transactions to exchange USDC for FRAX/DAI LP on Polygon! Although this process only mimics a few yield farming DApps, it is extremely complicated to operate manually.

From a higher perspective, all the processes we execute have clear expected outcomes. For example, "We have USDC( on Ethereum) and hope to provide liquidity for FRAX/DAI( on Polygon), and then deposit it into the staking pool." This is the "content" of our operations, and the 12 transactions we must execute are the "how" of the operations. A series of clear and logical steps are required from start to finish.

If there is a powerful trading routing algorithm, this process can be simplified to 1-2 steps. We just need to specify the desired outcome, and the algorithm will return the best path, which may even handle the transaction directly. This path mapping structure is called "intention" and is part of the rapidly evolving middleware future of Ethereum.

Although there is no consensus in the industry on the definition of "intention", there are some common viewpoints. Paradigm believes: "Intention is the signing of a set of declarative constraints that allows users to outsource the creation of transactions to third parties without relinquishing complete control over the transactions." David Ma from Near believes: "Transactions are imperative, while intentions are declarative. Transactions are well-defined messages that specify how to execute the EVM to produce state changes, whereas intentions specify the desired state changes without focusing on the implementation process."

Both definitions emphasize the "declarative" characteristic of intent, which seeks external assistance through data sharing between the user and the "solver". The user declares the desired outcome, and the solver provides a method to achieve it. Intent must be mapped by a third party, with constraints to narrow down the possible set of paths. This allows users to broadcast their ultimate goals to a group of solvers, who compute the optimal path. The user selects the optimal route and executes the transaction, while the intermediate steps are handled by the solvers, requiring the user to confirm only 1-2 transactions.

The basic architecture based on "intention" already exists in the EVM. When using a DEX, it automatically finds the best trading route. Taking Curve as an example, after selecting the trading assets, the interface automatically finds the best LP for routing and completes multiple steps in a single transaction. It also provides an estimate of price impact and offers suggestions to reduce slippage.

This is just a basic example. The intention is to share the desired outcome ( to acquire the maximum amount of USDC ) with the constraint ( of only selling 100,000 FRAX ), determined by the solver for the best exchange rate. Aggregators like 1inch and DeFiLlama have adopted this intention system, providing multiple potential trading relay options for users to choose from.

In addition to trading aggregation, there are several other types of "intents" on Ethereum, such as limit orders, CowSwap-style auctions, gas sponsorships, delegations, batch trading, and cross-chain swaps. Although the types of orders are becoming increasingly diverse, intents can essentially be viewed as a new form of limit orders.

The intention consists of two parts: the desired final state of the user and the transaction initiated by the solver. Combining the two yields everything needed to execute the transaction.

This architectural design carries almost no risk. Solvers have the motivation not to propagate intentions that contain profitable MEV. The core feature of intentions is data exposure, where users express their willingness to extract MEV at the cost of convenience by signing intention messages. Intentions are stored in a private off-chain Interpool, which can be permissioned, permissionless, or a hybrid.

Permissionless interpool uses decentralized APIs, allowing free sharing of intents and granting executors unrestricted access. However, they are vulnerable to DDoS attacks and cannot prevent the spread of malicious intents. Permissioned memory pools use trusted APIs, which can withstand DDoS and control the spread of intents, but involve trust assumptions. Hybrid solutions attempt to balance the advantages of both, such as the CoW Protocol which employs trusted party-operated auctions, but participation is permissionless.

Currently, the most popular Interpool is centralized and permissioned, with no incentive to share information with competitors. This could lead to one party monopolizing most intention-based transactions and starting to charge fees and other rent-seeking behaviors.

When treating intentions as limit orders, they can be compared to Robinhood's order flow payment (PFOF). Intentions are essentially a form of MEV arbitrage. The arbitrage opportunities created by long-standing open orders may be more valuable than transactions manually added to the Ethereum memory pool. Unregulated and opaque solvers may provide the worst routes, as their profits are inversely proportional to execution quality. Users need to choose solvers carefully and leverage their negotiating power to encourage competition among solvers.

CoWSwap adopts this design by using batch auctions to find the best settlement prices for traders. Orders are not executed immediately but are collected and settled in batches. The solver publicly competes to match orders, ensuring that traders receive the best price execution. However, there is still some MEV in CoW orders because market makers need to engage in arbitrage at other venues to profit.

Currently, some protocols are developing intent-based hybrid system infrastructure. Flashbot's SUAVE is building private mempools and block building networks to channel traffic to L2 and Ethereum. Anom is dedicated to building the next generation of completely permissionless infrastructure.

Although the ultimate winner of the intent system has not yet been determined, it is an important part of the middleware revolution taking place in the crypto space. The existing crypto UIs are not user-friendly enough, making it difficult to promote adoption. Currently, the intent is mainly used for currency swapping and order batching, but it is expected to expand to broader data processing in the future.

This opens up new possibilities for projects like Fraxchain, as all wallets may default to account abstraction. A robust intent layer can unlock new use cases for Frax products and simplify the applications built on it.