๐ŸŒผDecentralized Algorithm (d-a)

The Decentralized Approach

The d-a is a computing layer that solves and executes user intents, represented as ERC-4337 UserOperations (userOps). Multiple UserOps are bundled in single transactions that encapsulate the desired outcomes and constraints specified by users rather than prescribing explicit transaction steps. By adhering to the ERC-4337 bundler interface and treating Intents as userOps, the d.a integrates with existing Account Abstraction (AA) wallets and supporting infrastructure. This infrastructure compatibility ensures a user-friendly experience and broad accessibility across the Web3 Account Abstraction landscape, with comprehensive access to ERC-4337 smart wallets and bundle-building infrastructure.

An Important Assumption Turned On Its Head

Balloondogs recognizes that access to efficient liquidity sources is a more significant factor for winning bids than advanced algorithms in optimizing Solver performance. By prioritizing comprehensive liquidity access, both on-chain and off-chain, the d-a improves efficiency and effectiveness metrics in Intents resolution. At BalloonDogs, algorithms are a commodity in the Intent tech stack.

  1. Trustless Environment: The d-a discards two trust assumptions present in existing Intent solutions:

    • Eliminating Dependency on permissioned Intent Solution Providers: permissioned models often necessitate expansive smart contract permissions and asset transfers.

    • Decentralizing Solver Operations: Instead of depending on a select group of permissioned solvers with the freedom to leverage users' funds to extract valueโ€”comparable to handing them blank checks.

  2. Comprehensive Liquidity: The d-a welcomes liquidity providers to contribute to the network's liquidity needs without the competitive barriers in permissioned Intent frameworks. This inclusive permissionless approach surpasses the limitations of routable solvers found in permissioned solutions (with paths to a small set of liquidity sources), broadening the network's liquidity access.

  3. Economic Incentives: The economic model incentivizes liquidity provision with minimal fee markups. This simplicity ensures a fair and attractive environment for liquidity providers to contribute to the solution's effectiveness--spoken at length as essential in an optimal Intent resolution system.

The Web3 Intent Protocol

Core Technical Foundation

The Intent protocol is built atop ERC-4337 account abstraction infrastructure, i.e., bundlers and decentralized Solver services.

The Algorithm relevance

The d-a nodes couple the algorithm with Intent expression, routing execution through aggregators to access liquidity through varied Defi paths.

These nodes also operate similarly to the role of conventional chain block proposers, proposing userOps bundles.

D-a nodes responsibilities:

  • Interpreting Intent userOps.

  • Assess algorithm and liquidity sources appropriate to the Intent requirements.

  • Interacting with oracles to fetch off-chain and on-chain, i.e., market rates.

  • Engaging with DeFi protocols and liquidity aggregators to execute intent-specific actions (e.g., token swaps, liquidity provision).

  • Leveraging cross-chain bridges and liquidity pools to facilitate intent fulfillment across multiple chains.

  • Validate post-execution Intent fulfillment.

Intent Execution and State Transitions

In blockchains, transactions trigger state transitions, with the network converging on a single state at any time. Similarly, the d-a is a state transition agent by solving, executing, and settling bundles of solved userOps.

When a userOp is submitted to the d-a, the solution strategy matches optimal liquidity. The solution is then executed, triggering a new network state that reflects the fulfillment of the user's intent. Then, the d-a validates the Intent post-execution to adhere to the expressed Intent conditions and goal and revert otherwise.

Built around the ERC-4337 Infrastructure

The d-a supersedes the ERC-4337 infrastructure, adopting the standard's Bundler functionality. The d-a nodes expose the ERC-4337 bundler API, allowing users to submit their intents via the sendUserOp endpoint.

Solving userOps involves interacting with various on-chain and off-chain components, such as:

  • Liquidity aggregators to source liquidity.

  • Oracles for fetching external data.

  • Defi protocols for executing intent-specific actions.

  • Cross-chain bridges and liquidity pools facilitate cross-chain interactions.

The solver node then packages solved userOps into an ERC-4337 bundle, which is submitted to the Ethereum network for execution.

Decentralized Governance and Participation

The d-a operates as a decentralized network with permissionless access to join, use, and participate in the intent fulfillment process.

Intent Fulfillment Across Web3 Domains

The d-a architecture is use case agnostic and addresses any Web3 domain through ERC-4337 account abstraction, e.g.

  1. Account Abstraction Wallets

    Also known as programmable accounts, their interaction possibilities extend beyond Defi to recoverability, gaming, decentralized Identities linking users, and functionalities across multiple blockchains.

  2. Efficient & Advanced DeFi Interactions

    Solver nodes facilitate cross-chain swaps, lending, yield farming, and NFT, utilizing cross-chain collateral to enhance liquidity routing.

  3. Staking and Liquid Staking

    Supporting various staking models, including restaking and liquid staking, in cross-chain contexts

  4. Web3 Games

    Enabling the use of NFT and any asset, anywhere, as currency or rewards within gaming ecosystems

  5. DAO Governance

    Enabling DAO interactions, i.e., voting, initiative actions, and posting proposals.

Through decentralized consensus, ERC-4337 integration, and cross-chain interactions, the d-a executes user intents across multiple Web3 domains in a trustless manner.

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