Limitations of Today's Transaction Model

Transactions are the fundamental means for users to interact with blockchains like Ethereum today. However, the transaction model as it exists surfaces several core limitations:

• Opacity - When submitting transactions, users have restricted visibility into how they will actually execute. Outcomes are heavily dependent on factors like network congestion, miner/validator behavior, overall blockchain state, and more at the specific time of execution. This opacity leaves users vulnerable to exploits like front-running, backrunning, and other "maximal extractable value" (MEV) techniques.

• Lack of guarantees - Transactions offer no inherent guarantees that user goals will be achieved as intended. Frequently, desired outcomes require coordinating across multiple domains, protocols, and decentralized applications in an atomic fashion. However, executing transactions atomically across decentralized environments with finality remains highly challenging today.

• Relinquished control - By signing raw transactions, users cede substantial control and authority to the intricacies of smart contract code and backend infrastructure. Transactions enable arbitrary computation dependent on implementation details. Users relinquish too much authority to decentralized applications and their creators when transacting through today's paradigm.

• Legibility - The transaction model forces users to reason about low-level details like nonces, gas fees, and other blockchain arcana. Transactions provide limited ability for users to express intents in plain terms that map to mental models. Lack of legibility impedes mainstream adoption.

• Inflexibility - Transactions offer minimal built-in support for cross-domain composability, privacy, and other progressive capabilities. Applications must implement complex logic and conventions to coordinate across environments and protect users.

• Centralization risks - The high degrees of freedom transactions grant to miners, validators, and relayers allow them to readily extract value through reordering, censorship, and other techniques. Lack of visibility into execution exacerbates user vulnerability to MEV exploitation.

What Are Intents?

Intent-driven transaction frameworks aim to address the limitations above by inverting today's transaction model. Instead of dictating specific execution steps, users simply declare desired outcomes.

For example, a user could sign an intent stating "I want to pay Bob 10 ETH" without worrying about the underlying transaction details like nonces and gas fees. Intents encapsulate goals, not means.

Intents align more closely with how users think about transactions in plain terms – expressing objectives rather than execution paths. Specialized network participants called "solvers" then attempt to fulfill user intents optimally and atomically across applications while minimizing rent extraction.

In an ideal intent-based system, users could seamlessly perform complex actions across domains by signing a single high-level intent. Meanwhile, solvers coordinate to discover and satisfy user goals in a decentralized manner.

How Do Intents Work?

There are several key steps involved in the lifecycle of an intent-based transaction:

• Intent Creation – The user crafts and signs the intent indicating their desired outcome via a client like a wallet.

• Intent Dissemination – The intent propagates to an "intent pool" allowing discovery by solvers. This could use public gossip protocols or more permissioned dissemination.

• Intent Matching – Solvers monitor the pool for compatible intents to aggregate or route, forming fully specified state transitions.

• Intent Execution – Solvers submit optimized transactions enacting bundled intents to the blockchain for execution and settlement.

• Validation – Oracles and verification mechanisms ensure user intents were fully satisfied before releasing payments.

Benefits of Intent-Driven Transactions

Intent architectures offer several advantages over today's transaction models:

• Increased user control – Users set constraints rather than relinquishing full authority.

• Customization – Users decide personalized parameters like privacy, atomicity, counterparties, and fees.

• Cross-domain composability – Intents seamlessly specify outcomes across applications, protocols, and blockchains.

• Mitigated MEV – Encryption and programmability hinder rent extraction by solvers.

• Enhanced outcomes – Specialized solvers compete to optimize intent fulfillment.

• Legibility – Intents align closer with user mental models of transacting.

Core Principles of Intent-Driven Interactions

Intent-based transaction frameworks aim to address the limitations above by inverting today's transaction model. Instead of dictating specific execution methods, users simply declare desired outcomes.

Several core principles underpin intent-driven interactions:

• Declarative model - Users specify desired outcomes rather than low-level execution steps. Intents encapsulate goals, not means.

• Conditional authority - User funds are only released upon evidence that their intent was fully satisfied. Intents grant limited rather than absolute authority.

• Competitive solvers - Anyone can attempt to fulfill user intents through optimized transactions. Permissionless competition promotes efficiency and transparency.

• Enhanced customization - Users decide personalized parameters like privacy, atomicity, counterparties, and fee structures. Intents are highly customizable to user needs.

• Native composability - Intents seamlessly specify outcomes across applications, protocols, and blockchains. Cross-domain coordination is built-in, not bolted-on.

• Legibility - Intents align with user mental models of goals and outcomes. Execution complexity is abstracted away.

Under this paradigm, users relinquish far less control to the applications and protocols they interact with compared to signing raw transactions. Specialized network participants called "solvers" listen for user intents and attempt to fulfill them optimally while minimizing rent extraction.

Challenges in Realizing Intent Infrastructures

However, significant obstacles remain in architecting performant and decentralized intent platforms. Several emerging projects have proposed initial architectures highlighting key complexities:

• Scalability – On-chain intent matching struggles with transaction volumes. Off-chain dissemination risks liveness failures and censorship. Hybrid approaches attempt to balance these tradeoffs.

• Censorship resistance – Preventing malicious actors from selectively ignoring or censoring user intents is critical yet introduces challenges. Solutions range from global gossip protocols to consensus mechanisms for intent ordering and inclusion.

• Cross-domain coordination – Enabling seamless composability across applications requires optimizing synchronization across solvers working on separate domains. Innovations like shared sequencers may help.

• Collusion resistance – Mechanisms are needed to hinder malicious actors from manipulating auctions, intent matching, and other solver-based processes. Approaches like negative starting fees show promise.

• User experience – For mainstream viability, users require simple interfaces abstracting away the complexity of crafting and disseminating intents. Solutions like wallets owning intent abstraction introduce their own risks.

• Computation – The sophisticated predicates required to evaluate intents likely necessitate off-chain computation enabled by cryptographic proofs like ZK-SNARKS, at least until on-chain scaling substantially matures.

Early Intent Applications and Use Cases

Despite existing limitations, intents may already provide value in narrower applications where tradeoffs are clearer. Some emerging use cases include:

• Cross-domain trading - Users express abstract intents to go long or short particular assets using capital across multiple protocols. Solvers coordinate borrowing, swaps, transfers, and collateral management across chains and rollups.

• Algorithmic gaming strategies - Rather than dictating each transaction, players issue broad intents like "avoid combat encounters" or "maximize yield generation". Solvers translate these into optimized bot strategies.

• Private order dissemination - Traders propagate encrypted intents representing trading interests to solvers, only revealed when certain predefined on-chain conditions are triggered.

• Decentralized limit order books - Users submit limit prices for assets, executed by solvers through decentralized batch auction clearing algorithms.

• Collusion resistant auctions - Bidders declare maximum willingness to pay, fulfilled by solvers using mechanisms like secret blind bids and negative starting prices.