There’s a quiet revolution underway that’s transforming the way we use blockchains, and at the heart of it is one of crypto’s newest buzzwords: “intentions.”
Simply put, an intention is a specific goal that a blockchain user wants to achieve. While no two ‘intent-driven’ systems are the same, they all work in the same way: users, whether merchants or protocols, submit their intent to a service, and then it is outsourced to a ‘solver’ – it can be a person be, or an AI bot, or some other protocol – that does what it takes to get the job done.
These are becoming important now because blockchains are expanding so quickly. As Bitcoin, Ethereum, a host of alternative layer 1 networks, layer 2 networks and now even layer 3 networks proliferate, accompanied by countless ‘bridges’ and other ‘interoperability’ solutions connecting them all , it all becomes more and more difficult to navigate.
As the crypto market has matured, “the number of things you can do on blockchains has expanded,” explains Arjun Bhuptani of Connext, an interoperability protocol. “You have an infinite possible way to execute a transaction at any given time.”
Newer intent-driven services promise to find users the best way to get things done – helping them maximize trading profits and save on gas costs, among other things.
But the benefits of these platforms come with risks, and some observers are already sounding the alarm bells: While we could welcome the help of third-party solvers to carry out our busy work on blockchain, new services could give rise to a new breed of monopolists. .
Understanding intentions
Blockchains can be seen as enormous, global computers. Traditionally, users provide detailed instructions (for example, use Uniswap to exchange token A for token B at a specific price), which the blockchain executes step by step.
However, in the new world of intentions, this model is being turned on its head. Users indicate what they want to get done (e.g., trade A for B at the best price) without specifying how, and let the protocol manage the details.
Consider the analogy of hailing a taxi. Traditional blockchain services are akin to giving the driver turn-by-turn directions, which can be annoying and costly if your route includes turns or hard-to-find shortcuts. With intentions, all you have to do is give the taxi driver a destination, then sit back and trust your driver.
A new wave of blockchains and protocols, including Anoma, Flashbots and CoW Swap, are already offering intent-centric services to crypto users. Users can submit a general goal to one of these services, such as “exchange these tokens for the best price,” and have it handled by a third-party resolver for a fee.
How it all works
Different platforms apply different words to the idea of “intentions,” but the general premise remains the same.
Most intent-based protocols today start with some kind of “intent discovery” system, a place “where users broadcast the things they want,” Bhuptani explained. In blockchain parlance, these discovery locations could be thought of as “mempools” – waiting areas for yet-to-be-processed transactions.
An intention “could be something like, ‘I have USDC, I want to figure out how to turn it into XYZ assets, and I want to do that on a different chain or in a specific way,'” Buhptani said. “There is no limitation on the complexity of the intention one can express.”
“Then you have a marketplace of solvers,” Bhuptani continued. Solvers “listen” to intentions, and fulfill them when the price is right. “These intent resolvers are automated actors that basically say, ‘Oh, a user wants to do XYZ?’ Okay, let me do it on their behalf because I can earn compensation for it.”
At a high level, this may all sound familiar. Aren’t we expressing an intention when we ask Coinbase to exchange ether (ETH) for bitcoin (BTC), or when we instruct an exchange aggregator like 1inch to sell our Solana tokens to whatever market has the highest price? Well, yes. ‘Intentions’, like so many other things in the world of crypto, are a fancy way of describing a phenomenon that already exists.
The trick with intents in 2023 – and the reason the term has gained popularity in the past year – is due to the number of services, new and old, that are trying to box user-friendly intents into boxes that comply with decentralized crypto rules. ethos, and can be dragged and dropped into virtually any use case.
Most new intent-based protocols “decentralize” their systems by outsourcing to a network of solvers that compete to fulfill user requests for the best possible price. This competitive system is intended to ensure that no single central third party is tasked with meeting all user needs.
Intentions in action
Intent-centric systems are already live for various use cases.
Bhuptani’s Connext protocol uses intents to guide transactions between different blockchains. For example, users can express an intention to transfer a token from one chain to another, and a network of solvers will find the optimal route.
Anoma, the protocol that popularized the concept of blockchain-based intents, offers what it simply calls “intent-centric infrastructure.” In basic terms, Anoma’s infrastructure is designed to extend intent-based functionality to virtually any use case, allowing other services to match intents with a network of solvers.
SUAVE, an emerging blockchain from maximum extractable value (MEV)-focused infrastructure company Flashbots, is one of the most high-profile services designed around a version of intentions, which it calls “preferences.” When SUAVE launches, users will be able to submit ‘preferences’ in a competitive market of network operators who will bid against each other to fulfill them. The system is built to balance the priorities of users and MEV.
The risk of rent seekers
While intent-based services offer a wide range of user experience benefits, you only have to look at the taxi analogy to see where the systems can go wrong.
Providing detailed directions for all our taxi rides, similar to the traditional model of specifying each step in a blockchain transaction, would be difficult and error-prone.
But there’s also a problem with the ‘trust the driver’ approach, which is more akin to intent-based systems: we’ve all had the experience of getting into a taxi in an unfamiliar city for what we expect to be a short journey , and then sit awkwardly while our driver takes a suspiciously long route, running up the meter.
The taxi driver in this analogy is like the solver in an intention-based system: trusting the solver to take on a task means that he or she will perform the task honestly.
Intent-centric programs typically have systems in place to keep solvers honest, which means a better analogy might be Uber, which keeps drivers in check with upfront pricing and in-app routing. But ride-sharing apps only underscore the risk of intent-based systems: Anyone who has experienced the rising prices of Ubers in recent years has seen firsthand how convenience can entrench big players at the expense of end users. The real risk of intent-based systems is not just unfairness, but also the potential for new monopolies.
Paradigm, a prominent blockchain investor and researcher, highlighted these risks in a blog post: “While intents are an exciting new paradigm for transactions, its widespread adoption could imply an acceleration of a larger trend of user activity shifting to alternative mempools ” wrote Paradigm’s researchers. “If not managed properly, this shift risks centralization and entrenchment of rent-seeking intermediaries.”
As we become more comfortable with relying on these third parties to meet users’ needs, it is possible that these companies will act in their own interests – either by charging higher fees (e.g. Uber) or by fulfilling orders in a way that serves them rather than users.
While most intent-oriented services are outsourced to a competitive market of solvers – ostensibly as a way to avoid centralization – there is still the potential for some companies to dominate the space.
For example, you could imagine a crypto exchange that builds solvers that dominate the ‘buy’ and ‘sell’ use case, effectively driving all market activity into its own book. The exchange could initially subsidize its fees as a way to beat competitors, then raise prices once the market has been taken over.
At best, intent-based models could usher in a new wave of blockchain-based systems that save users time and money, making the technology more accessible to more users. But to realize this future, one must proceed with caution.