Original title: The Open Intention Framework: Intention As A Public Good

Original author: YBB Capital Researcher Ac-Core

1. How to solve the fragmentation problem of Ethereum

Source: @ethereumfndn

With the rise of different L2s and various types of DeFi, the problem of liquidity fragmentation in Ethereum has gradually emerged, mainly manifested in the difficulty of unifying asset liquidity in the ecosystem, but is cut into multiple small pieces by L1 and various types of L2s. Different L2s compete for TVL, resulting in assets and transactions being scattered among multiple decentralized platforms and protocols. However, these platforms lack effective connectivity and interoperability, and the liquidity on each chain can only be operated in its own independent “small circle”, which exacerbates the overall fragmentation cost problem of Ethereum.

In 2024 alone, more than 100+ new Ethereum chains will be launched. It is like entering the mall and looking at a dazzling array of goods but all of them need to settle in different countries ‘currencies. On February 20 this year, the Ethereum Foundation announced the opening of the Open Intention Framework, like the “Qin Shihuang Unified Weights and Measures”, allowing Ethereum to have a seamless trading experience like a “single chain” and in just a few days. Received support for more than 50 protocols.

According to openintents.xyz, the Open Intention Framework consists of three core components (see extended link 1):

1. Open source solver:The framework provides an open source solver written in TypeScript that monitors on-chain events and handles intentions. Unlike solvers that rely on specific infrastructure, it shares that reference solvers have protocol independence and support functions such as indexing, transaction submission, and rebalancing. Developers can customize and adjust them according to their own needs;

2. Composable smart contracts:The framework provides a series of pre-built smart contracts, but these contracts are based on the ERC-7683 standard, which defines the logic of how to interpret, execute and settle intentions. Support limit order trading and Hyperlane ISM settlement by default;

3. UI template:The framework also provides a pre-built, customizable user interface template designed to make intended products more accessible to end users.

2. ERC-7683, the core of the Open Intention Framework

Source: @KanishkKhurana_

ERC-7683 is a common standard for cross-chain intentions on Ethereum. Developed jointly by Across (@AcrossProtocol) and Uniswap Labs (@Uniswap), ERC-7683 implements intentions by standardizing cross-chain intentions. It aims to provide a unified, standardized framework for Ethereum and other blockchains for expressing and executing cross-chain operations, especially between multiple L2 solutions and sidechains.

Core content and components of ERC-7683:

1. CrossChain Order Structure:The format of cross-chain orders is defined to ensure consistency between different blockchains and platforms. It standardizes the composition of cross-chain transactions, allowing operations on different chains to interoperate;

2. ISetlementContract interface:Standardize the handling of the settlement process. ERC-7683 uses this interface to define how to handle transaction settlement between different chains, allowing cross-chain transactions to flexibly perform settlement between different platforms, and supporting customized transaction processes;

3. Fulfil：ERC-7683 introduces a “Fulfil” mechanism that allows participants to compete in a shared network to complete cross-chain intentions. Participants reduce costs and increase efficiency by providing services (such as executing orders) in these networks, which allows cross-chain transactions to be completed more efficiently and optimizes the user experience;

4. Fill Deadline:This is a Uni X timestamp that marks the expiration time of the cross-chain intention. If the intent is not completed within the specified time, it will expire, thereby avoiding long wait for invalid transactions;

5. Order Data Type (orderDataType):Use an EIP-712 type hash to specify the structure and format of the intention data. With this type of hashing, developers and platforms can clarify how data is formatted for transfer and interpretation between different chains;

6. Order Data:Order data contains core parameters of cross-chain transactions (such as token, quantity, chain, recipient), which define the expected results of cross-chain transactions. It ensures that transaction participants can accurately understand and perform cross-chain operations.

One of the biggest advantages of ERC-7683 is its ability to achieve seamless cross-chain interactions. By standardizing the expression of cross-chain intentions, users can perform operations between different blockchains without complex settings, such as token exchanges or NFT transfers. This simplifies the standardized framework of operating processes, greatly reduces the technical threshold for cross-chain operations, and allows users to conduct cross-chain transactions more conveniently.

Secondly, ERC-7683 also enhances governance capabilities. It simplifies the governance process between different blockchains, especially for decentralized autonomous organizations (DAOs), making it easier to manage proposals and decisions across multiple chains. The unity of ERC-7683 makes DAO more efficient in cross-chain governance on multiple platforms, improving governance flexibility and transparency.

3. Where is the end of the “abstraction” of Intent and DeFAI

Source: Self-made

Whether it is the Intent or DeFAI, they are essentially derivatives of DeFi’s financial attributes, but there are only two problems that DeFi needs to really solve, scalability and liquidity. It seems more practical for Intent to pool liquidity through UNI and ERC-7683, while DeFAI has become more interesting with the wave of AI narratives and automated AI transactions that Hey Anon(@HeyAnonai) has implemented. The respective solutions of Intent and DeFAI mainly focus on improving DeFi’s user experience, optimizing transaction execution, and enhancing the stability and security of the protocol, but there are also differences:

The core goal of Intent is to simplify the user interaction process through an “intent-driven transaction” mechanism. Users can set transaction intentions and strategies, and the system will automatically execute them, eliminating the need for users to manually intervene in every step. This not only improves DeFi’s ease of use, but also optimizes strategy execution and improves transaction efficiency. In addition, Intent may also use cross-chain technology to solve liquidity bottlenecks in DeFi. By enhancing cross-chain liquidity, Intent helps break down barriers between different chains and optimize liquidity pools, thereby increasing the market depth and transaction efficiency of decentralized exchanges.

As a decentralized financial protocol based on artificial intelligence, DeFAI focuses on solving compliance and risk control issues in DeFi. DeFAI uses AI technology to analyze and predict market trends to help protocols identify potential risks, thereby reducing operational risks while ensuring protocol stability. AI can process a large amount of market data, provide users with more accurate decision support, and optimize market operations and risk management.

In order to solve the problem of liquidity fragmentation, we move from account abstraction, chain abstraction to intentions and DeFAI. In the end, abstraction is endless, and the needs of technology and markets are also promoting the birth of more levels of abstraction. We need abstraction, but also moderation. The problem of fragmentation of liquidity itself is more like an “ecosystem integration problem.” It depends not only on the increase of abstraction levels, but also on how to optimize existing protocols.

4. Why is only Uniswap able to truly promote the development of ERC-7683

Source: @Uniswap

1. Liquidity advantages of Uniswap V4

The introduction of Uniswap V4 makes liquidity pool management more flexible and efficient, especially for centralized liquidity provision for different price ranges. This mechanism optimizes capital efficiency and makes cross-chain transactions smoother. In the V3 version, each new pool needs to be deployed with a separate smart contract, resulting in high Gas costs. V4 replaces this with a single PoolManager contract, which will centralize all mining pools. Management deployment costs reduce by 99% and lower exchange costs. Hooks also allows the development of customized AMM pools, allowing the ERC-7683 protocol to be adjusted according to different market needs. Better match different trading pairs and asset liquidity.

2. The potential of Uniswap X

Uni X is expected to further enhance cross-chain interoperability. It may add a new cross-chain bridging mechanism or deeply integrate with ERC-7683 to provide a more efficient cross-chain asset exchange channel. If UniX can provide cross-chain mobility solutions, it will become an important platform for ERC-7683 to implement cross-chain intentions. Therefore, by leveraging UniX’s liquidity pool and technology optimization, ERC-7683 can achieve seamless cross-chain transactions on a larger scale.

3. Implementation dependencies of cross-chain protocols

Since ERC-7683 relies on standardized cross-chain transaction structures and settlement mechanisms, Uniswap plays a pivotal role in decentralized exchanges. The protocol is likely to rely on the liquidity pool, automated market making and cross-chain trading capabilities provided by Uniswap, especially the support of Uniswap X and Unichain. Uniswap can not only support the efficient execution of ERC-7683, but most importantly, it can ensure its cross-chain and multi-asset transactions. Stability and security.

5. What is the actual meaning of the intention

When we put aside the abstract definition of “intention”, it can actually be understood as a clear transaction goal or driving force. The concept of intention can be traced back to Paradigm’s article “Intent-Based Architectures and Their Risks” published on June 1, 2023, which expressed the explanation of the concept of intention. However, it has always been in the conceptual stage, and the problem of fragmented flow and the solution path of the solver have not been solved. However, the launch of ERC-7683 seems to allow us to see a better solution to the fragmented flow problem.

The ultimate goal is to inject new vitality into Uniswap, hoping that Uniswap will trigger a new round of DeFi craze. Therefore, the intention and ERC-7683 are not just to continue to expand L2, but to achieve more efficient transactions through Uniswap, create richer functions and stronger cross-chain interoperability, and even introduce new incentive mechanisms or trading models to attract More users and liquidity.

If Uniswap V4 or Uniswap X introduces some new smart contract logic or transaction models at the protocol level, through ERC-7683, Uniswap can further improve cross-chain liquidity, reduce transaction costs, and add more transaction pairs and liquidity pools based on the existing AMM model. It will make Uniswap no longer just an AMM with dispersed liquidity, and these improvements will also become an important part of the “intent.”

This article is from a submission and does not represent the views of BlockBeats.