Written by: YBB Capital Researcher Ac-Core

1. How to solve the problem of fragmentation of Ethereum

Source: @ethereumfndn

With different L2 and various DeFi With the rise of the rise, the problem of liquidity fragmentation of Ethereum has gradually emerged, mainly manifested in the difficulty of unified asset liquidity in the ecosystem, and has been cut into multiple small pieces by L1 and various L2. In order to compete for TVL between different L2s, assets and transactions are scattered among multiple decentralized platforms and protocols, but these platforms lack effective connections and interoperability, and the liquidity on each chain can only be in its own independent "small" Operations within the circle have exacerbated the overall fragmentation cost problem of Ethereum.

In 2024 alone, more than 100 new Ethereum chains will be launched, which is like entering the mall. We look at the dazzling array of goods but all require different currencies. proceed to checkout. On February 20 this year, the Ethereum Foundation, like the "Qin Shihuang Unified Weights and Measures", announced the opening of the Open Intents Framework (Open Intent Framework), allowing Ethereum to have a seamless transaction experience like a "single-chain" and in just a few seconds. More than 50 agreements were obtained within the day.

According to the content of openintents.xyz, the Open Intents Framework consists of three core components (see Extended Link 1):

Open Source Solver: The framework provides an open source solver written in TypeScript that can monitor on-chain events and process intent. Unlike solvers that rely on specific infrastructure, it shares reference solvers with protocol independence and supports functions such as indexing, transaction submission and rebalancing. Developers can customize and adjust according to their needs;

Composite 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 intent is interpreted, executed, and settled. Limit order trading and Hyperlane ISM settlement are supported by default;

UI template: boxThe rack also provides a pre-built, customizable user interface template designed to make intent products easier to access by end users.

2. The core of Open Intents Framework ERC-7683

Source: @ KanishkKhurana_

ERC-7683 is a common standard for cross-chain intent on Ethereum, together with Across (@AcrossProtocol) and Uniswap Labs (@Uniswap) Lead development and realize intentions through standardized cross-chain. The aim is to provide a unified, standardized framework for Ethereum and other blockchains to express and perform cross-chain operations, especially between multiple L2 solutions and sidechains.

The core content and components of ERC-7683:

CrossChainOrder Structure): Defines the format of cross-chain orders to ensure consistency between different blockchains and platforms. It standardizes the composition of cross-chain transactions, so that operations on different chains can be interoperable;

ISettlementContract interface: Standardizes the processing method of settlement process. ERC-7683 defines how to handle transaction settlement between different chains through this interface, allows cross-chain transactions to flexibly execute settlement between different platforms, and supports customized transaction processes;

Fulfil: ERC-7683 introduces the "Fulfil" mechanism, allowing participants to compete for cross-chain intentions in a shared network. Participants reduce costs and increase efficiency by providing services in these networks (such as executing orders), which enables cross-chain transactions to be completed more efficiently, optimizing the user experience;

FillDeadline: This is a Uni X timestamp that marks the expiration time of the cross-chain intent. If the intention is not completed within the specified time, it will expire, thus avoiding long-term invalid transaction waiting;

Order DataType: Use EIP -712 Type hashTo specify the structure and format of the intent data. Through this type of hashing, developers and platforms can clarify how data is formatted so that it can be passed and interpreted between different chains;

orderData : Order data contains the core parameters of cross-chain transactions (such as tokens, quantity, chain, receiver), 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 interaction. By standardizing the expression of cross-chain intentions, users can perform operations between different blockchains without complex settings, such as token exchange or NFT transfer. This simplifies the standardized framework of the operation process, 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 governance processes between different blockchains, especially for decentralized autonomous organizations (DAOs), which makes it easier to manage proposals and decisions on multiple chains. The unity of ERC-7683 makes DAO more efficient when cross-chain governance on multiple platforms, improving governance flexibility and transparency.

3. Where is the end of Intent and DeFAI "abstracted"?

Source: Homemade

Whether it is Intent or DeFAI, it is essentially derived from the financial attributes of DeFi, but there are only two problems that DeFi needs to truly solve point, scalability and liquidity. Intent gathering liquidity through UNI and ERC-7683 seems more practical, while DeFAI is becoming more interesting with the wave of AI narrative and the automated AI transactions that Hey Anon(@HeyAnanai) has achieved. The respective solutions of Intent and DeFAI are mainly focused on improving the user experience of DeFi, 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 the "intention-driven transaction" mechanism. Users can set transaction intentions and strategies, and the system will automatically execute them without the need for user manual intervention in each step. This not only improves DeFThe ease of use of i can also optimize strategy execution and improve transaction efficiency. In addition, Intent may also solve the liquidity bottleneck in DeFi through cross-chain technology. By enhancing cross-chain liquidity, Intent helps break down barriers between different chains and optimizes liquidity pools, thereby improving the market depth and trading efficiency of decentralized exchanges.

DeFAI, as a decentralized financial protocol based on artificial intelligence, 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-making support, and optimize market operations and risk management.

To solve the problem of liquidity fragmentation, we go from account abstraction, chain abstraction to intention and DeFAI, and after all, the abstraction is endless, technology and market demands It is also promoting the birth of more abstract levels. We need abstraction, but also moderate. The problem of liquidity fragmentation itself is more like an "ecosystem integration problem". It not only relies on the increase in the abstraction level, but more on how to optimize existing protocols.

IV. Why is only Uniswap able to truly promote the development of ERC-7683? Source: @Uniswap

Although "intention" is a grand narrative concept, only my personal opinion, the core support of ERC-7683 can only be Rely on Uniswap to drive implementation. The reason is that both Intent and DeFAI are essentially about better serving DeFi, and the key factor in maintaining the healthy development of DeFi is market liquidity, and this dependency needs to be based on "efficient liquidity supply" and "deeply integrated liquidity".

1. Liquidity advantages of Uniswap V4

The introduction of Uniswap V4 has enabled liquidity pools Management is more flexible and efficient, especially for centralized liquidity in different price ranges. This mechanism optimizes capital efficiency and makes cross-chain transactions smoother. In V3 version, each new pool needs to deploy a separate smart contract, resulting in high Gas fees. V4 uses a single PoolManager contracts replace this, reducing the deployment cost of centralized management of all mining pools by 99% and lower exchange costs. At the same time, Hooks also allows the development of customized AMM pools, allowing the ERC-7683 protocol to be adjusted according to different market needs. Good match for 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 new cross-chain bridging mechanisms or deeply integrate with ERC-7683 to provide more efficient cross-chain asset exchange channels. If Uni X can provide a cross-chain liquidity solution, it will become an important platform for ERC-7683 to perform cross-chain intentions. Therefore, ERC-7683 can achieve seamless cross-chain transactions on a larger scale through Uni X's liquidity pool and technical optimization.

3. Implementation dependency of cross-chain protocol

Because ERC-7683 depends on standardized cross-border Chain transaction structure and settlement mechanism, Uniswap plays an important role in decentralized exchanges. This 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 transactions. and the stability and security of multi-asset transactions.

5. What is the actual meaning of intention?

When we put aside the abstract definition of "intention", it can actually be understood as a clear trading goal or Driver. The concept of intention can be traced back to the article "Intent-Based Architectures and Their Risks" published by Paradigm on June 1, 23, which expresses the explanation of the concept of intention. However, it has been in the conceptual stage, and the problem of fragmented liquidity problems and solver solutions has not been solved. However, the launch of ERC-7683 seems to have allowed us to see the bright future of better solution to the fragmented liquidity problem.

The ultimate goal is to inject new vitality into Uniswap, hoping to trigger a new round of DeFi craze. So Intent and ERC-7683 are not just continuing L2 expansion, instead, through Uniswap, we can achieve more efficient transactions, 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 be used in existing AMMs Based on the model, further improving cross-chain liquidity, reducing transaction costs, and adding more trading pairs and liquidity pools will make Uniswap no longer just a liquidity dispersed AMM, and these improvements will also become "intentions". an important part of.