Potential Impact of Intent-Based Swap on DEX Market

At the Ethereum Kuala Lumpur Developer Conference, a researcher in the blockchain field shared insights on Intent-Based Swap and its potential impact on decentralized exchange (DEX) markets. This article will introduce the mainstream trading models of current DEXs, the concept of Intent and the principles of Intent-based trading, as well as related products and future development directions.

Existing DEX Trading Models

Currently, there are two main trading modes in DEX:

1. Automated Market Maker ( AMM ) model: Designed like x*y=k, it allows users to trade at any time, but the capital utilization is relatively low, which may lead to losses for liquidity providers. Typical products include certain well-known DEX platforms.

2. Off-chain matching and on-chain settlement ( RFQ ) model: Users inquire about prices, market makers quote, and transactions are confirmed afterward. It is user-friendly, with no slippage and MEV risk, but demands a high standard from market makers.

These two modes have their own advantages and disadvantages, complementing each other.

The Concept of Intent and Its Application in Trading

Traditionally, users need to provide complete transaction information when interacting with DApps. However, the Intent model only requires users to clarify their transaction intentions, while the specific execution steps are handled by professional Solvers.

In Intent-Based Swap, users only need to specify part of the trading conditions (such as price, time, etc.), while the rest is filled in and recorded on the blockchain by the Solver. In this model, the user defines "what they want," and the Solver decides "how to execute it."

Advantages of Intent-Based Swap:

1. User zero gas fee
2. Improve order on-chain efficiency and simplify user operations.
3. Highly composable, flexibly meets user needs

Areas for improvement:

1. Cancellation of the transaction must be done on-chain.
2. Direct sale of ETH is not supported.
3. Difficulty in order tracking
4. Under certain conditions, the final outcome is difficult to predict.

Intent-Based Swap Use Cases

RFQ and limit orders can be seen as a simple application of Intent-Based Swap. Currently, there are several related products in the market, including specific features from some well-known trading platforms.

Future Development Directions

Intent-Based Swap not only improves traditional trading models but may also open up new trading methods. For example, it can serve as a means of implementing agency authorization, allowing professional market makers to operate assets under specific conditions, achieving advanced trading strategies such as grid trading, large batch purchases, and time-weighted average price ( TWAP ) trading.

With the development of technology and the deepening of its applications, Intent-Based Swap is expected to bring more innovations and opportunities to the DEX market, promoting the further development of the decentralized financial ecosystem.