Why Intent-Based Trading Will Make Order Books Obsolete

Order books are a bottleneck. They require users to specify how to trade, forcing them to manage liquidity, slippage, and MEV across fragmented venues, a problem protocols like UniswapX and CowSwap explicitly solve.

Intents declare the 'what'. A user submits a signed statement of desired outcome (e.g., 'get me 1 ETH for < $3,000'), delegating the search for optimal execution paths to a solver network.

This inverts the market structure. Instead of liquidity competing on a single venue, solvers compete across all liquidity sources—DEXs, private pools, OTC desks—to fulfill the intent, a model proven by Across Protocol's relay network.

Evidence: UniswapX processed over $7B in volume in its first year by abstracting away cross-chain swaps and MEV, demonstrating user preference for declarative trading over manual execution.

Order books are execution engines. They require users to specify the exact how—price, quantity, venue—forcing them to manage liquidity fragmentation and complex cross-chain operations manually.

Intents are outcome declarations. Users state the desired end state (e.g., 'swap X for Y at best rate'), delegating the how to a solver network like those powering UniswapX or CowSwap.

This inverts the liquidity model. Instead of competing for order flow, venues like Curve or 1inch compete within a solver's optimization algorithm, creating a meta-market for execution quality.

Evidence: UniswapX, which outsources routing to fillers, already processes over $10B in volume, demonstrating user preference for gasless, MEV-protected declarative swaps over manual limit orders.

User submits a declarative intent, like 'swap X for Y at best price'. This is a signed message specifying an outcome, not a transaction. The intent-centric architecture separates the 'what' from the 'how', offloading execution risk and optimization to a network of solvers.

Solvers compete in a permissionless auction to fulfill the intent. This solver competition creates a market for execution quality, measured by final user receipt. Protocols like UniswapX and CowSwap run these auctions, where solvers bundle intents and route across DEXs, bridges like Across, and aggregators.

Order books become a liability. They require constant liquidity provision and active management. An intent-based system sources liquidity dynamically from the entire DeFi ecosystem. The user gets a guaranteed outcome; the solver bears the execution risk and gas cost.

Evidence: UniswapX processed over $7B in volume in its first year by abstracting MEV and cross-chain swaps. Its architecture proves that declarative trading at scale is viable and superior for most retail flows.

Intent systems require finality. UniswapX and CowSwap generate intents, but they must be settled. The final, atomic state transition requires a verifiable execution environment. On-chain order books, like those on dYdX or Hyperliquid, provide this settlement guarantee.

Liquidity fragmentation is a feature. A single global order book is a scaling impossibility. Specialized liquidity pools for specific assets or derivatives outperform generalized solvers. An intent for a complex perp trade routes to the venue with the best price, not a single solver's inventory.

The mempool is the ultimate order book. All transactions, including intent fulfillments, broadcast to a public mempool. Frontrunning protection protocols like Flashbots SUAVE or CowSwap's batch auctions treat this mempool as a transient, time-based order book for fair execution.

Evidence: dYdX v4 processes 2,000 trades per second with sub-10ms latency on a Cosmos app-chain. This performance ceiling for intent-based aggregation across fragmented liquidity does not yet exist.

The user declares intent, not execution. A trader specifies a desired outcome (e.g., 'swap X for Y at best price') and signs an off-chain message. Solvers like those in CowSwap or UniswapX compete to fulfill this intent by finding optimal routes across DEXs, bridges, and private inventory. The winning solver submits the on-chain transaction, paying gas and delivering the outcome.

Order books become a liquidity source, not a destination. In an intent-centric world, a CLOB on dYdX or an AMM pool on Uniswap V3 is just one of many potential paths a solver's algorithm evaluates. The user experience abstracts the venue, accessing fragmented liquidity without manual route discovery. This mirrors how 1inch aggregates but pushes the logic off-chain.

The economic model inverts. Traditional exchanges profit from spread and fees on execution. Intent-based systems like Across profit from fulfillment reliability and capital efficiency. Solvers earn via MEV capture and fulfillment fees, creating a market for execution quality rather than liquidity provision alone. This shifts value accrual from LPs to network operators.

Evidence: UniswapX, since launch, has processed billions in volume by outsourcing routing to third-party fillers. Its growth demonstrates market demand for gasless, MEV-protected swaps where the protocol is agnostic to the underlying liquidity source.