Alapfogalmak
The author explores the strategic behavior of solvers in intent-based markets, highlighting the impact of costs and congestion on user welfare.
Kivonat
The content delves into intent-based markets where solvers compete to fulfill user orders, analyzing the implications of entry costs, effort, and congestion. It discusses models, mechanisms like Dutch auctions, and optimization approaches for maximizing social welfare.
Content includes detailed analysis on decentralized finance mechanisms, challenges faced by decentralized exchanges compared to centralized ones, and proposals like intents to bridge the gap. The study provides insights into various intent-based protocols like UniswapX and CoW Swap. It also examines economic incentives for solvers fulfilling intents and the impact on user welfare.
Key points cover formal models of solvers' strategic behavior, different types of intents like maximum output and variance limited transfer intents, empirical observations from UniswapX competition evolution, and proposals like US SEC's Proposal 615 for equities markets. The article discusses auction-theoretic models for intents with entry costs and costly efforts affecting market dynamics.
Furthermore, it presents an optimization-based deterministic model for intent markets focusing on social welfare maximization through a Dutch auction-like mechanism. The discussion extends to congestion effects on solver costs impacting user welfare in multiple asset trades scenario.
Statisztikák
Recently off-chain marketplaces proposed as 'intent markets'
CFMMs facilitated over $2 trillion transactions since 2018
UniswapX processed over $3 billion in notional volume since late 2023
CoW Swap processed over $30 billion since inception in 2021
Idézetek
"Understanding conditions under which these systems provide improvements is crucial."
"Effort-dependent prices can affect net revenue significantly."
"Solvers decide to enter based on opportunity exceeding threshold costs."