Understanding intents in Decentralized Finance: definitions, use cases, and impacts on DeFi transactions

Single-chain intents operate within a single blockchain network. These intents are generally straightforward and involve interactions confined to one blockchain. Examples include:

• Trading tokens: Users might state an intent to trade one token for another within the same blockchain network. For instance, a user could express an intent to trade ETH for UNI on the Ethereum blockchain.
• Staking: A user may express an intent to stake a certain amount of tokens in a smart contract to earn staking rewards. For example, "stake 1000 USD Coin in a liquidity pool on the Ethereum network."
• Interacting with Smart Contracts: Users can state intents to interact with various decentralized applications (dApps) on the same blockchain. For example, a user expresses an intent to participate in a decentralized lending protocol to earn interest.

Cross-chain intents involve operations that span multiple blockchain networks. These are more complex and often require sophisticated routing mechanisms to execute. Examples include:

• Bridging assets: Users can express an intent to transfer tokens from one blockchain to another. For instance, transferring ETH from the Ethereum blockchain to Binance Smart Chain (BSC).
• Cross-Chain swaps: A user might state an intent to swap tokens across different blockchains, such as swapping ETH on Ethereum for ADA on Cardano.
• Multi-Chain portfolio management: Users can manage their assets across various blockchains by setting intents for yield optimization, staking, or trading. For instance, a user might express an intent to "maximize yield between DeFi protocols on Ethereum and BSC."

The decentralized finance (DeFi) space is one of the most prominent areas benefiting from intent-based architectures. DeFi applications often involve complex interactions with multiple smart contracts and protocols. Intents simplify these processes by allowing users to express high-level goals. For instance:

• Yield optimization: Users can express intents such as "optimize yield on my stablecoin holdings," and the system will automatically move funds between different yield farming opportunities to achieve the best returns.

• Liquidity provision: A user might state an intent to provide liquidity to specific pools, like "provide liquidity to the ETH/USDC pool on Uniswap." The system then handles the transactions required to add liquidity and earn trading fees.

• Borrowing and lending: DeFi platforms like Aave and Compound allow users to lend and borrow assets. By expressing an intent such as "borrow 1000 DAI against my ETH collateral," the system manages the steps to fulfill this objective.

Non-fungible tokens (NFTs) represent unique assets that are often traded on specialized marketplaces. Intents can simplify transactions involving NFTs. For example:

• Purchasing NFTs: A user might state an intent to "purchase a specific NFT at the best available price," and the system handles finding the best deal and executing the transaction.

• Selling NFTs: A seller can express an intent to "list my NFT for sale at a minimum price of 5 ETH," and the system manages the listing and sales process across multiple marketplaces.

As blockchain technology evolves, interoperability among different networks becomes critical. Cross-chain intents facilitate these interactions by abstracting their complexity. Examples include:

• Token bridging: Users express intents to transfer tokens across different blockchains, like "bridge my USDT from Ethereum to Polygon," and the system manages the bridge protocol's specifics.

• Cross-Chain swaps: Users declare intents such as "swap my BNB on Binance Smart Chain for DOT on Polkadot," and the system automates the multistep process required to execute the swap.

• Cross-Chain actions: User can express their intention of other actions consisting of multiple transactions, like “bridge my USDC from Arbitrum to Ethereum, and provide liquidity on ETH/USDC pool on Uniswap”, and the system executes the process, without the user being involved.

Blockchain has the potential to revolutionize e-commerce through intent-based transactions. This process can grow better with the help of AI agents that have access to the real-world applications. For instance:

• Shopping deals: Shoppers can express intents like "buy a specific item at the best available price," and the underlying system compares prices across various sellers and completes the purchase.

• Subscription services: Users can set intents for recurring purchases, such as "subscribe to monthly delivery of coffee," with the system handling the billing and fulfillment automatically.

In blockchain-based gaming, intents simplify the acquisition and trade of in-game assets. For instance:

• Buying in-game assets: A player might express an intent to "buy a rare sword," and the game’s marketplace system finds the best offer and executes the purchase.

• Trading assets: Players can state intents like "trade my rare sword for 1000 in-game gold," and the system automates the trade within the gaming platform.

Blockchain-based identity solutions can leverage intents to simplify interactions. Using Zero-Knowledge technology in this process, can grow the whole section in a more secure and more accessible manner. For example:

• Identity verification: Users might declare an intent to "authenticate my identity for a service," and the underlying system manages the verification process and securely transmits the required information.

• Access control: Users can express intents for accessing restricted resources, such as "grant access to my health records," with the system ensuring permissions and compliance.

An important note is that most of the examples provided here as “intents of users” are not practical right now. However, the concept of intent in the blockchain and cryptocurrency space is at its infant phase and can grow to its full potential, making these “example intents” practical, someday.

Anoma is a blockchain protocol that emphasizes an "intent-centric infrastructure." By allowing users to express high-level intents, Anoma aims to streamline decentralized application interactions and support seamless cross-chain operations. This innovative approach is particularly useful for complex DeFi activities and multichain interactions.

Anoma ranks among the first protocols to fully integrate intent-centered design, which is evident in its diverse range of use cases. The project leverages decentralized solvers to pick up and execute intents in scenarios such as cross-chain swaps, asset trading, and even complex DeFi protocols. According to Anoma's official website, they utilize an "Intent Machine (IM)" to capture and convey intent, ensuring it caters to various decentralized applications while maintaining security and efficiency.

CoW Swap is a decentralized exchange that optimizes trade execution through batch auctions. It leverages intents to group multiple user orders and find the best execution paths. According to Shoal Research, "Batch auction serves as the core pricing (price discovery) mechanism for CoW Swap. Orders are grouped together, where solvers (off-chain counterparties) compete to execute these orders either through off-chain matching or on-chain DEXs." This method not only reduces transaction costs but also improves the overall trading experience by ensuring users get the best possible prices.

By aggregating user intents into batch auctions, CoW Swap maximizes trading efficiency. This method minimizes slippage and ensures users receive top prices. CoW Swap's solver network assesses all submitted intents, groups them, and executes trades in an optimal manner, benefiting from pooled liquidity and reduced transaction costs.

Across is a cross-chain bridge that leverages intent-based design to provide fast, low-cost, and secure transfers between different blockchain networks. The project aims to simplify the user experience by abstracting away the complexities associated with cross-chain transfers. By using intents, Across enables users to express high-level goals while the underlying system handles the intricate operations required to achieve them seamlessly.

According to the Across protocol documentation, the primary feature of Across is its ability to leverage liquidity relayers, which fulfill user intents by providing liquidity across multiple blockchains. This design ensures that users can transfer assets efficiently without worrying about the details of bridging mechanisms.

UniswapX enhances the traditional Uniswap protocol by incorporating off-chain fillers, who help execute trades and provide gas-free swapping options. This system allows users to declare trade intents, and solvers take care of the intricate details. According to Binance Square, "UniswapX focuses on the routing problem. It outsources the problem of finding the best path to a competitive market that understands other on-chain sources and private inventories to find the best path that provides the best price for traders" This ensures efficient asset swapping with minimal user intervention.

By relying on off-chain components, UniswapX significantly improves transaction speeds and user experience. As outlined in their Blog post, this approach allows them to offer gas-free swaps and an advanced routing system that dynamically adjusts to market conditions.