The world of decentralized finance (DeFi) is moving quickly. It’s all part of an effort to create a more inclusive economy by removing obstacles and expanding access to the financial ecosystem. Among those innovations, intent-based architecture emerges as one of the most exciting breakthroughs to hit the market. It looks at making complicated DeFi processes as easy as possible for users and developers alike. Just last week Enso, a company dedicated to creating this kind of architecture, raised a $5 million funding round to do just that. This begs the question: is intent-based DeFi truly the future? Read more about intent-based architecture. We’ll hear as well from Enso directly about how it is playing a formative role in this development and what difference it could make.

At its heart, intent-based architecture in DeFi is all about turning the tables. Users don’t need to understand the technical intricacies of executing a DeFi transaction. Rather, they should just be able to say what they want to achieve. The system then determines the most efficient means of accomplishing that intended outcome, removing the complexity through abstraction. Picture this – when you approach a travel agent, you tell them “I would like to be in Rome next week.” It’s way simpler than trying to book your flights, hotels and transportation on your own! The agent (the platform) takes care of the logistics according to your intent.

When implemented properly, this approach has the potential to reimagine the user experience for DeFi. Consider a user who wants to exchange BNB on the Binance Smart Chain for USDT on Ethereum. Usually, this would take several steps, cross-chain bridges, third-party protocols, interacting across different protocols and chains, and incurring gas fees on every chain. With intent-based architecture, the user simply states their intention: "I want 100 USDT on Ethereum from my BNB on Binance Smart Chain." The system then executes the cross-chain swap, finding the optimal route based on efficiency and cost-effectiveness.

Understanding Intent-Based Architecture

Defining Intent-Based DeFi

This new approach marks a paradigm shift in the way users can connect with and use decentralized applications. Rather than requiring users to control each detailed stage of a transaction, users specify their end goal, or their intent. The system then smartly determines how to most cost-effectively achieve that goal. By adding this abstraction, the interface is much simpler for the user, allowing DeFi to be more accessible to a wider audience.

The fundamental premise of this idea is to automatically match user intents with the closest “offers” provided by sellers or liquidity providers. We test these claims based on a number of criteria. We look at gas efficiency, cost, and our overall montility to meet the intent. By honing in on the goal end result, intent-based systems simplify and thereby demystify DeFi. Like current DOT Secretary Pete Buttigieg, they want to improve access for all.

Examples of Intent-Based DeFi

Several projects are already utilizing intent-based architecture in various forms. Here are a few examples:

  • CoW Swap: Orders on CoW Swap operate based on user intents, matching them with the best available prices from various liquidity sources.
  • Seaport Protocol: This protocol focuses on NFT purchases, matching user intents with sellers offering the desired NFTs.
  • 1inch Fusion: This is an intent-specific application within the 1inch ecosystem, designed to optimize swap execution.
  • UniswapX: Similar to 1inch Fusion, UniswapX is an intent-specific application built on top of Uniswap, focusing on efficient swap routing.
  • Anoma: Anoma is a more comprehensive, intent-centric protocol aiming to provide privacy-preserving decentralized counterparty discovery.

These examples illustrate the sweeping implementation and potential uses of an intent-based architecture. Including everything from basic token swaps to complex NFT trades and privacy-preserving interactions.

Benefits of Intent-Based Architecture

The promise of an intent-based architecture is huge, though, and could radically change the DeFi landscape.

  • Improved User Experience: By abstracting away technical complexities, intent-based systems make DeFi more user-friendly and accessible to a wider audience.
  • Reduced Complexity: Users can focus on their desired outcomes rather than navigating the intricacies of different protocols and blockchains.
  • Increased Adoption: A simplified user experience can lead to increased adoption of DeFi as it becomes easier for newcomers to participate.

Intent-based architecture abstracts complex on-chain operations. Users can simply specify their intended results, and the platform handles all of the implementation details. Enso’s powerful core features make managing and allocating capital effectively that much easier. Developing a strategy is then quick and easy enough for any user to accomplish in just a few simple steps. Thanks to Enso integration, users are able to perform all of these operations in one transaction. Now they don’t have to switch back and forth through multiple application interfaces. Enso retains its users by making it possible to do several related things in a single platform. This process greatly improves the likelihood of avoiding user abandonment.

Enso: Building the Infrastructure for Intent-Based DeFi

Enso is purposefully aimed at constructing the infrastructure for intent-based DeFi. It plays the role of an API middle layer that abstracts the complexity of interacting with multiple DeFi protocols. This embeds all of the data pipelines needed to integrate the foundational tools automatically, freeing developers to focus on building applications.

Enso includes a supercharged unified ledger. It interoperates, allowing you to aggregate data from every rollup and appchain into a single easily accessible source. This streamlines the workflow and gives users a smart, holistic perspective of the entire DeFi environment. Enso uses their own abstractions within smart contracts, dictated by the published “Action Providers.” These incentives further encourage developers to do everything they can to reduce complexity.

Enso's Key Features

Enso’s architecture is well-suited for the development and deployment of intent-based DeFi applications. Here are some of its key features:

  • API Middle Layer: Enso functions as an API middle layer, designed to support intent-based architecture, abstracting complexity for developers.
  • Unified Ledger: Enso's shared network state centralizes data from rollups and appchains into a unified ledger, simplifying operations.
  • Smart Contract Abstractions: Action Providers publish smart contract abstractions, which can be used to earn rewards, reducing complexity for developers.

Benefits of Enso's Approach

Intent-based DeFi can revolutionize the broader DeFi ecosystem, propelling it into a new era of adoption, efficiency, and innovation. It is not perfect — there are some key challenges to be addressed.

  • Abstracting Complexity: Enso abstracts the complexity of working with multiple protocols, allowing developers to focus on building applications rather than foundational tools and manual integrations.
  • Improved User Experience: By simplifying the development process, Enso enables developers to create more user-friendly and intuitive DeFi applications.
  • Increased Accessibility: Enso's approach makes it easier for users to participate in DeFi, by providing a more straightforward and user-friendly experience.

The Potential Impact and Challenges of Intent-Based DeFi

The first major hurdle is the need for real decentralization. If intent execution is permissioned and poorly architected, it risks undermining the whole block production ecosystem on Ethereum. This could incentivize centralization of block production, which poses an existential risk to the technology. It’s really important to make sure that the systems carrying out these intents are decentralized enough in their execution to avoid gaming and censorship.

Potential Impact

  • Simplified User Experience: Intent-based DeFi can simplify the user experience by allowing users to express their desired outcomes without having to manually execute trades, making it easier for users to manage their assets across multiple blockchains.
  • Increased Efficiency: Intent-based DeFi can increase efficiency by allowing multiple intents to be included in a single transaction, reducing gas costs and improving economic efficiency.
  • Enhanced Automation: Intent-based DeFi can enable more sophisticated automation strategies that can operate across multiple blockchains, allowing for more complex and dynamic investment strategies.
  • New Business Models: Intent-based DeFi can enable new business models, such as permissioned or permissionless intent execution, which can create new opportunities for builders, traders, and users.

Challenges and Considerations

A third challenge is the need for security and reliability of intent execution. As the system is responsible for determining the optimal path to achieve a user's intent, it's essential to have robust mechanisms in place to prevent errors, vulnerabilities, and malicious attacks.

Lastly, the difficulty of designing and sustaining intent-based systems shouldn’t be overlooked. The latter takes extensive knowledge of DeFi protocols, smart contract development and optimization techniques.

Intent-based DeFi is a big leap toward making decentralized finance more intuitive and user-friendly. Enso’s $5 million funding round is just one recent example of the surging interest in this approach. When paired correctly it could be transformative to the DeFi ecosystem. Challenges remain, but the advantages are evident. Combined with a user experience that cuts through complexity, higher levels of efficiency and automation, intent-based DeFi is ready for serious innovation and evolution. As the technology matures, more and more projects will be adopting this kind of architecture. This change will dramatically improve the experience anybody will have using and learning from decentralized finance.

Intent-based DeFi represents a significant step towards making decentralized finance more accessible and user-friendly. Enso's $5 million funding round highlights the growing interest in this approach and its potential to revolutionize the DeFi landscape. While challenges remain, the benefits of simplified user experience, increased efficiency, and enhanced automation make intent-based DeFi a promising area for future development and innovation. As the technology matures and more projects adopt this architecture, we can expect to see a significant shift in how users interact with and benefit from the world of decentralized finance.