Transacting Over Heterogeneous Trust with Intent Markets

Blockchain interoperability stands as the final frontier in unleashing the full potential of decentralized technologies. Yet, the heterogeneity of trust across networks has created a fragmented ecosystem, hampering seamless cross-chain interactions. While numerous solutions have emerged, each grappling with specific aspects of this challenge, a truly unified approach remains elusive.

This article proposes a paradigm shift: an intent-driven interoperability solution that embraces trust diversity rather than attempting to homogenize it. By leveraging the power of intents and permissionless trust projection, we envision a future where the complexities of diverse blockchain environments become transparent to all participants, paving the way for a truly interconnected digital economy.

The Ultimate Goal of Blockchain Interoperability

Blockchain interoperability today faces a fundamental challenge: the heterogeneity of trust across different networks. Each blockchain, whether a Layer 1, a rollup, or application-specific chain, operates under unique trust assumptions and finality rules, impeding seamless cross-chain interactions.

This trust fragmentation has spurred innovation across the blockchain industry, driving the search for new paradigms to bridge these divides while preserving the unique strengths of individual networks.

As we evaluate existing solutions and design new ones, we must keep sight of interoperability's ultimate goal: a seamless, unified blockchain ecosystem that spans heterogeneous trust domains. This vision challenges us to conceive an architecture where the complexities of diverse trust environments become transparent to all participants.

I summarized it in this X post:

These objectives represent the pinnacle of blockchain interoperability - a future where the boundaries between chains dissolve, unlocking the full potential of a truly interconnected digital economy.

Moreover, interoperability is not limited to traditional “cross-chain projects”. It permeates every aspect of blockchain infrastructure. Whether it's scaling solutions syncing with their base chains, privacy protocols reconciling hidden and public data, liquidity pools bridging isolated assets, or user interfaces streamlining fragmented user experiences – each challenge fundamentally involves harmonizing diverse trust assumptions and operational models. This broader view transforms our understanding of interoperability from a specific technical challenge to an overarching design principle shaping the entire blockchain ecosystem.

Fragmentation and Challenges of Multi-Chain Ecosystems

To fully grasp the challenge of unifying multiple blockchains, we must first understand what we've lost in transitioning from a synchronous, consistent state machine to a network of blockchains. These losses manifest as “fragmentations” - the key challenges that interoperability solutions must address:

1. Composability Fragmentation

• Single Chain: Apps seamlessly integrate with any other app on the chain.

• Multi-Chain: Apps across different chains require intermediaries (provers, relayers, solvers) for integration.

• Implication: Developers face increased complexity in app design and deployment decisions.

2. Liquidity Fragmentation

• Single Chain: All apps share a common pool of liquidity protocols.

• Multi-Chain: Liquidity is siloed within individual chains.

• Implication: Capital efficiency decreases, and liquidity providers face challenges in optimizing their strategies.

3. Settlement Fragmentation (aka. the "train and hotel problem")

• Single Chain: Transactions touching multiple apps either fully succeed or fail together.

• Multi-Chain: Cross-chain transactions risk partial execution, leading to inconsistent states.

• Implication: Developers must implement complex rollback mechanisms and users face increased transaction risks.

4. UX Fragmentation

• Single Chain: Users enjoy a unified interface to see all their assets and interact with all applications

• Multi-Chain: Users must navigate multiple interfaces and wallet connections to be able to both manage their assets and interact with applications.

• Implication: Increased cognitive load on users, potentially hindering adoption and usability.

These fragmentations present distinct challenges:

For Developers (1 & 3): The challenge lies in optimal app deployment and managing cross-chain transaction consistency. How can they ensure both seamless inbound app integrations and handle the 'train and hotel problem' when they integrate other apps where multi-chain transactions must collectively succeed or fail?

For Liquidity Providers (2): How do they efficiently supply capital and earn fees across multiple, fragmented liquidity domains while managing the associated risks and complexities?

For User Experience (4): Wallet developers and front-ends face the challenge of creating 'single-click' user experience across heterogeneous trust environments. How can they abstract away complexities like bridging, gas tokens, and reverted transactions, to provide a fast and secure experience for users?

Addressing these fragmentation challenges is crucial for achieving the vision of a seamlessly interconnected blockchain ecosystem. As we explore potential solutions, we must consider how each approach tackles these fundamental issues of composability, liquidity, settlement, and user experience.

Review of Existing Solutions

Let's examine some of the industry's current solutions and evaluate how they address the interoperability challenges we've identified.

App-Centric Approach

The app-centric approach believes that interoperability should be solved at the application level. This method requires applications to deploy on all chains where they want to meet users, with various deployments communicating via cross-chain messaging.

Fundamentally, this approach places the burden of managing cross-chain complexity on developers. They must select trust vendors that underwrite cross-chain finality risk, and handle cross-chain reverts caused by state contention.

This approach excels in flexibility, allowing developers to choose external trust vendors to scale to different trust domains. However, it comes at the cost of self-managing complexity. While it addresses composability fragmentation to some extent, it significantly increases the developer burden and may not fully solve other fragmentation issues like liquidity or user experience.

Infrastructure Stack Centric Approach

The infrastructure stack centric approach believes interoperability should be solved at the chain infrastructure level. Architecturally, it provides in-protocol interoperability solutions for blockchains built with the same software stack, abstracting away the complexity from developers and users.

This is one of the oldest blockchain interoperability solutions, dating back to the original days of Cosmos and Polkadot. These solutions tend to form ecosystem clusters, with recent zk-rollup ecosystems joining this race, offering ecosystem-specific zk-provers and proof-aggregator layers with shared bridges.

This approach excels at abstracting away complexity and optimizing for the best developer experience. While it doesn't inherently solve the "train and hotel" problem, this burden is not placed on the developer. Each ecosystem tends to converge to ecosystem-specific shared sequencers to help with cross-chain execution atomicity. In many cases, these "infrastructure clusters" solve cross-chain liquidity problems through a shared bridge, typically integrated with a proof aggregator in hub-and-spoke topologies, or by routing through liquidity hubs in more peer-to-peer topology (e.g., IBC).

On-chain Liquidity-Centric Approach

The on-chain liquidity-centric approach posits that in the cross-chain context, it's almost always assets being passed across chains. Therefore, interoperability should be solved as a multi-chain liquidity layer. Applications can be built on top of these liquidity protocols to achieve multi-chain interoperability. The liquidity hub may take the form of an independent blockchain or smart contract-based reserves with pricing mechanisms on each connected blockchain.

This approach excels at unifying and allowing the formation of unified cross-chain liquidity markets, optimizing for the best capital experience. It directly addresses liquidity fragmentation, potentially improving capital efficiency across the ecosystem. However, they may require developers to integrate with a specific liquidity protocol, and it doesn’t completely remove the complexity of “train and hotel problem” when cross-chain execution extends beyond token swaps.

Off-chain Liquidity Approach with Intents

The cross-chain intents approach takes an off-chain centric interaction model, having users send their orders to solver networks. The protocol functions as a multi-chain intent settlement system between users and solvers to facilitate cross-chain asset swaps.

Intents offer strong user-perceived atomicity with a binary outcome - either the swap happens exactly as expected, or nothing happens for the user. This provides a solution to the "train and hotel" problem, but with a narrowed focus on cross-chain swaps.

Intents are UX primitives, providing end-to-end UX abstraction to users. Additionally, intent-based swaps offer the best latency in execution and a more seamless, "single chain" like user experience.

This approach excels at latency and cross-chain atomicity but relies on the existence of off-chain solvers. Intent protocols typically don't come with liquidity markets and require solvers to carry inventory and price liquidity, making the cost of running solvers higher than other off-chain agents in alternative solutions.

Shared Sequencing / Block Building Approach

The shared sequencing / block building approach suggests that interoperability should be solved at the coordinated sequencing or block building level. Architecturally, it requires blockchain validators to opt into a block building market. When a builder wins the right to build blocks for two blockchains simultaneously, they can provide a strong guarantee of including and executing transactions on both blockchains.

This approach excels at providing cross-chain atomicity, directly addressing the settlement fragmentation issue. However, it requires that sequencers or proposers opt into a specific shared sequencer or builder market, making the barrier to integrate higher. While it offers strong guarantees for cross-chain transactions, it may lead to centralization concerns and might not fully address other fragmentation issues like liquidity or user experience.

Zero Knowledge Proof Based Approach

The Zero Knowledge Proof (ZKP) Based Interoperability approach is a variation of the message passing approach, focusing on using ZKPs to prove either consensus-based or state-based zero knowledge proofs. This method excels at safety, providing high-security guarantees for cross-chain interactions.

However, the current cost and latency of proving remain issues, although rapid progress is being made in this area. For chains that are not built with a ZK infrastructure stack, manual integration on both the proving side and the verifying side may still be required.

ZKP based interoperability offers a promising path for future interoperability solutions, especially when it could be combined with atomicity solutions like intents and shared sequencing, or liquidity based solutions such as a shared bridge. However, just like the message passing approach, it’s not opinionated in providing a unified liquidity market, optimization for user experience, or cross-chain atomicity for developers.

Account-Centric Approach

The account-centric approach, also known as the user-centric approach, believes that interoperability must be solved at the account or wallet level. Architecturally, it provides a user-centric solution that abstracts away user balances across blockchains and offers a chain-abstracted way for users to interact with applications on any blockchain through intents and solvers fulfilling those intents.

From the user's point of view, it feels like a magic wallet that allows them to author transactions with their assets from any blockchain to interact with applications on any blockchain as if they were all on the same chain. This approach excels at providing the best user experience, significantly addressing UX fragmentation. However, it may involve complex backend implementations with secure attestation and verification networks, and might not directly solve other fragmentation issues like liquidity or composability.

Hybrid Approaches

While each approach offers unique strengths in addressing specific interoperability challenges, they also come with inherent limitations. Recognizing that no single solution fully resolves all aspects of interoperability, developers have also adopted hybrid approaches.

Notable hybrid examples include:

• Applications launching on their own infrastructure-stack based application rollups, while utilizing message passing solutions or intents solutions to connect with out-of-cluster blockchains. This hybrid approach leverages the benefits of ecosystem-specific optimizations while maintaining broader interoperability.

• Account-centric solutions working in tandem with intent-based solvers to ensure atomicity in cross-chain execution. This combination enhances user experience while addressing the settlement fragmentation issue.

• Infrastructure-stack clusters with tightly integrated cross-chain liquidity protocols, providing both in-cluster developer ergonomics and out-of-cluster turnkey liquidity solutions for applications. This approach combines the strengths of infrastructure stack centric and liquidity-centric solutions.

Trust: The Ultimate Fragmentation

The quest for an endgame interoperability solution that combines the best of all worlds faces a fundamental challenge: trust. All solutions we’ve mentioned ultimately rely on either normalizing cross-chain trusts or depending on specific trust vendors. This trust fragmentation is at the core of why integrating all solutions isn't straightforward.

The Dilemma of Trust Scaling

Permission-based trust scaling approaches, such as event or state based attestation with a shared hub chain’s consensus nodes, aim to "normalize trust assumptions." However, this method faces an anti-network effect. As state from heterogeneous domains is curated as fungible, risk grows exponentially with each new chain added. Consequently, the centralizing entity becomes increasingly conservative, as a single mistake could be catastrophic. This growing risk aversion can stifle innovation and limit the ecosystem's growth potential.

On the other hand, permissionless trust scaling, while avoiding the pitfalls of centralization, faces its own set of challenges. The primary question becomes: how can all participants - users, developers, and capital - effectively build and transact over heterogeneous trust environments?

The Universal Challenge

The fundamental challenge for all interoperability solutions lies in their ability to scale across any trust domain without relying on specific infrastructure or vendors. This represents the core hurdle in achieving truly permissionless scaling.

However, this challenge also illuminates a path forward: a flexible, adaptable framework for trust management could be the key to integrating diverse approaches and achieving genuine interoperability. Such a framework would allow solutions to seamlessly span multiple trust domains, paving the way for a more interconnected blockchain ecosystem.

Towards a Potential Solution with Permissionless Trust Projection

Trust projection is an architectural pattern that emerges from a critical question: If normalizing trust zones with a trust vendor doesn't scale, how can we build applications and provision liquidity in a heterogeneous trust environment? This concept seeks to embrace the diversity of trust models rather than attempting to homogenize them.

A Global State Layer with Permissionless Trust Projection

The most basic implementation of this pattern is a permissionless projected global state layer. This approach provides a unified view of the external blockchain state, allowing developers and liquidity providers to interact with state from multiple chains. However, it's not without its drawbacks.

Figure 1: A Global State Layer with Permissionless Trust Projection

This approach allows anyone to become a counterparty for remote state, typically implemented by bridge protocols. These protocols hold collateral on one blockchain, mint wrapped assets on another, and use relayers to manage cross-chain withdrawals.

During the "bridge wars" era, competing protocols vied to establish their wrapped assets as the canonical representation on various platforms. While this method creates a unified platform for developers and a consolidated cross-chain liquidity market, it shifts significant risks to users and protocol governance. Users bear risk by holding wrapped assets, while protocols (and token holders) assume risk by accepting these assets as collateral.

Moreover, this approach requires users to transact directly on this global state layer, effectively making it their "home chain" for all cross-chain interactions. This creates a UX burden for users and hurts its adoption.

A Global Intent Market with Permissionless Trust Projection

The solution to the challenges for the global state layer lies in reimagining its role: not as an application platform, but as a market where solvers collaborate over permissionless state projection with an overlay of intents.

This shift transforms the architecture in several key ways:

1. It becomes a layer solvers interact with, rather than one users transact on directly.

2. It functions as a collaboration platform for solvers, not an application platform for developers.

3. It provides structures around and facilitates transaction over settlement focused liquidity markets instead of transaction focused liquidity pools.

Figure 2: A Global Intent Market with Permissionless Trust Projection

Let's break down the components of this architecture:

1. Solver-projected State as Trust-embedded Collaboration Intents. Solvers can project state from any external domain to this market, but not as pieces of state. Instead, they present their capabilities as "collaboration intents". For example:

I have 3000 USDT on Chain A, and can be a counterparty for any settlement request that accepts IBC light client proof, UMA optimistic proof, or plonky3 based zero knowledge proofs that spends up to 3000 USDT on Chain A, and accepting USDC or USDT as payments on Chains B, C, and D.

This approach allows for flexible, dynamic representation of cross-chain settlement capabilities.

2. Trust-embedded Intents as User Transaction Primitives. Applications, wallets, or front-ends can encode trust semantics directly in the user transaction primitive as intents. For instance:

I want to swap 1000 USDT on Chain A for at least 999 USDT on Chain B, facilitated by an IBC light client proof based settlement oracle.

This allows users to specify their trust requirements explicitly within their transaction requests.

3. Trust-embedded Credible Commitments as Long Running Intents. Liquidity protocols evolve into risk-aware credible commitments, functioning as long-running, market-making intents.

4. Automated Collaborative Solving with Remote Chain Settlement. Solvers become the key facilitators in this new paradigm. They:

• Observe the intents markets

• Match compatible intents with trust constraints

• Facilitate transaction outcome delivery

• Generate settlements and proofs

• Help users operate over heterogeneous trust environments

This architecture allows for a more flexible, scalable, and trust-agnostic interoperability solution. By shifting the complexity to solvers and encoding trust requirements in intents, it reduces the burden on users and developers while enabling seamless cross-chain interactions.

The intent market approach represents a significant evolution in blockchain interoperability. It addresses the challenges of trust fragmentation by creating a collaborative environment where diverse trust models can coexist and interact efficiently.

Embracing Trust Diversity and Complexity

Rather than attempting to abstract away trust domains, this architecture embraces and surfaces risk within the very fabric of transaction structures. It presents these risks to sophisticated operators who are equipped to manage them. Instead of internalizing and managing complexity, the system strives to scale complexity, allowing for more nuanced and efficient cross-chain interactions.

Inversion of Control for Stakeholders

For developers, users, and capital, this architecture represents a classic inversion of control. Traditionally, wallets, applications, and capital had to live on and inherit the rules of the underlying infrastructure. Now, we're encapsulating all infrastructure concerns as proof obligations and injecting them as transaction dependencies. These obligations are then farmed out to settlement counterparties, effectively connecting all trust domains.

An Open and Scalable Substrate to Integrate All Interoperability Solutions

The true strength of this architecture lies in its ability to serve as a connective tissue for all other interoperability solutions we discussed earlier. Its power stems from its peer-to-peer market structure, which doesn't require other protocols to opt into an intermediary.

Figure 3: A Global Intent Market as Integration Point for All Interoperability Solutions

1. Cross-chain messaging and ZKP based solutions: These can integrate as provers for external trust zones through relayers. They provide the necessary proofs to validate state across different chains. On the other hand, intent markets complement the messaging or ZKP based interoperability solution as a unified liquidity layer and relaying infrastructure that scale with the proving domains.

2. Infrastructure stack based interoperability solutions: These can integrate through relayers and provers to act as state counterparties. They can leverage their existing infrastructure to provide trusted state ownership to intent markets. On the other hand, intent markets complement the infrastructure stack based interoperability solution as a scalable intent-based interoperability solution connecting all other infrastructure stack based clusters.

3. Account-centric interoperability solutions: These can integrate through solvers as liquidity takers and owner of cross-chain settlement requests. They can use intent markets to facilitate cross-chain transactions for their users. On the other hand, intent markets complement the account centric interoperability solution as a unified off-chain liquidity and solver infrastructure that scales to future blockchains.

4. Intent-centric interoperability solutions: Similar to account-centric solutions, these can also integrate through solvers as liquidity takers, leveraging intent markets to fulfill user intents across chains. On the other hand, intent markets complement the intent-centric interoperability solution as a unified solver infrastructure that can scale with the intent settlement protocols.

5. On-chain liquidity protocols: On-chain liquidity protocols can integrate through rebalancing operations of intent markets. On the other hand, intent markets complement the on-chain liquidity protocols both as a unified relaying infrastructure, connections to new trust domains, as well as an atomicity primitive for more sophisticated cross-chain interactions beyond token swaps.

6. Shared sequencers or builders: These can integrate either through solvers or by participating directly in shared intent markets. On the other hand, intent markets complement the shared sequencers and builders as a unified off-chain liquidity and solver marketplace that can respond to partial block building requests, and scale with the builder markets themselves.

By providing a framework that can both incorporate and complement these diverse solutions, intent markets offer a path towards a more unified and interoperable blockchain ecosystem. It allows each solution to play to its strengths while addressing the overarching challenges of trust fragmentation and complexity in cross-chain interactions.

Optionality Beyond Trust

Intents distinguish themselves by offering optionality at the transaction level. While we've observed intent markets functioning as interoperability protocols with trust embedded in their transactional structure, this is just one facet of their potential.

The true power of intents lies in their ability to introduce optionality across arbitrary dimensions. Beyond trust, we can extend this flexibility to aspects such as latency, privacy, reputation, compliance, and even more we've yet to explore. This expansive capability stems from the fully expressive nature of intents and the fully programmable nature of collaborative solving, opening up a world of possibilities.

Unify Trust Domains with Intent-Driven Interoperability

Our journey through the landscape of blockchain interoperability has brought us full circle to our ultimate goal: a seamless, unified blockchain ecosystem that spans heterogeneous trust domains. The proposed intent markets based approach represents a paradigm shift in this pursuit, and aligns with our vision of making trust complexities transparent to all participants.

By shifting cross-chain interaction complexities to sophisticated solvers, it simplifies experiences for users and developers while fostering a robust capital ecosystem. The intent-driven, risk-aware framework not only integrates existing solutions but also paves the way for future innovations.