Why Solvers Will Become the New Power Brokers

Solvers like those in UniswapX and CowSwap don't just route orders—they own the routing. By internalizing flow and batching across venues, they become the ultimate liquidity aggregators, making DEXs mere backend suppliers.

• Concentrates ~$10B+ in daily order flow
• Extracts value via MEV capture and spread optimization
• Reduces user optionality to a single counterparty

Every signed intent is a data goldmine. Solvers see cross-chain user behavior, asset preferences, and payment flows before execution, creating an intelligence asymmetry that dwarfs current analytics.

• Predicts market moves via order flow auction (OFA) data
• Monetizes insights for proprietary trading and risk models
• Controls the most valuable dataset in DeFi: future demand

Better execution attracts more users, which improves solver capital efficiency and data, creating a vicious cycle. Protocols like Across and LayerZero risk becoming commoditized infrastructure for solver networks.

• Creates winner-take-most markets with >60% market share
• Forces vertical integration (solver + bridge + aggregator)
• Locks in users through superior fill rates and cost savings

UniswapX abstracts liquidity by outsourcing order routing to a competitive network of off-chain solvers. This creates a zero-fee, MEV-resistant market for execution.\n- Key Benefit: Solver competition drives better prices than any single on-chain AMM pool.\n- Key Benefit: Users get gasless transactions and guaranteed execution, paying only via price improvement.

Users face a complex, manual search across dozens of DEXs and bridges to optimize swaps, leading to poor execution and lost value.\n- Key Insight: The optimal route is a multi-chain, multi-venue problem no human can solve in a block.\n- Key Insight: This fragmentation creates a ~$1B+ annual opportunity for solvers to capture via price improvement.

Protocols like Across (using UMA's Optimistic Oracle) and LayerZero's DVN network provide the critical verifiable attestations that allow solvers to fulfill cross-chain intents without custodial risk.\n- Key Benefit: Enables trust-minimized bridging as a service within a solver's bundle.\n- Key Benefit: Creates a standardized security layer that solver networks can plug into, reducing integration overhead.

CowSwap's batch auctions and Flashbots' SUAVE provide the execution environments where solver competition is formalized and MEV is democratized.\n- Key Benefit: Coincidence of Wants (CoWs) allows for pure P2P settlement, the most profitable outcome for a solver.\n- Key Benefit: A credibly neutral mempool and block builder (SUAVE) prevents solver cartels and ensures fair competition.

Solvers emerge as specialized networks that algorithmically solve for the best execution path across all available liquidity sources, paying for gas and capturing the spread.\n- Key Benefit: Economic alignment: Solvers profit only by beating a user's quoted price.\n- Key Benefit: Protocols become liquidity aggregators, not managers, outsourcing complexity.

The end-state is a clear division of labor: protocols (UniswapX, CowSwap) provide the rules and settlement, while solver networks (professional market makers, DAOs) compete on execution. This turns DeFi into a platform business.\n- Key Insight: Value accrual shifts from liquidity providers to execution providers.\n- Key Insight: The winning protocols will be those that attract the most sophisticated solver ecosystems.

Top solvers like PropellerHeads and Bebop control the majority of order flow, enabling soft collusion and bid shading. This recreates the extractive dynamics of searcher/builder/proposer separation on Ethereum, but with fewer participants and less transparency.\n- Risk: Reduced competition leads to worse prices for end users.\n- Evidence: Solver win rates often follow a power-law distribution, with the top 2-3 capturing >60% of volume.

Solver infrastructure is highly centralized for low-latency performance. A major solver going offline (e.g., AWS region failure, bug in custom FPGAs) can cripple an entire intent ecosystem's liquidity. This creates systemic fragility akin to early cross-chain bridge collapses.\n- Risk: Single points of failure threaten network liveness.\n- Example: A solver handling ~40% of CowSwap volume failing would cause massive order delays and price slippage.

Solvers are the ultimate price oracles for intent-based trades. A dominant solver can manipulate settlement prices by controlling the flow of liquidity they expose to the settlement layer (e.g., Across, LayerZero). This is a more subtle attack than a 51% assault.\n- Risk: Long-tail asset prices become unreliable.\n- Mechanism: Skewing reported fill prices to benefit proprietary trading arms or favored LPs.

As the identifiable, licensed entities in a permissionless stack, solvers become the regulatory choke point. Authorities can force KYC/AML on solver networks, effectively imposing it on all users. This defeats the censorship-resistance promise of DeFi.\n- Risk: Geoblocking and transaction blacklisting enforced at the solver layer.\n- Precedent: Tornado Cash sanctions demonstrated targeting of centralized infrastructure components.

Winning large bundles requires massive, readily deployable capital for JIT liquidity and guaranteed settlement. This favors well-funded, VC-backed solvers (e.g., Bebop, Revert), creating a capital barrier to entry that stifles decentralization.\n- Risk: The solver market ossifies into a VC oligopoly.\n- Metric: Solvers may need $10M+ in on-demand liquidity to compete for major bundles.

Mitigation requires protocol-level design: enshrined auction mechanisms with forced inclusion for all qualified solvers (like Ethereum's PBS ideals) and solver reputation systems that penalize centralization. The goal is to make the solver layer a commodity, not a power center.\n- Mechanism: Timeout-based fallback to public mempool if leading solvers fail.\n- Goal: Credible neutrality through cryptographic, not social, guarantees.