Market Context

The Evolution: From Isolated Pools to Active Intelligence

The history of onchain trading is not merely a sequence of products, but a struggle to coordinate liquidity under increasingly complex constraints.

The Era of Fragmentation (DeFi 1.0)

It began with the architecture of isolation. Automated Market Makers (AMMs) like Uniswap operated as disconnected silos. Each DEX required independent liquidity depth to support trading for any single asset. To bootstrap this, protocols relied on brute-force incentives: liquidity mining and governance models, turning users into passive capital providers to sustain these fragmented silos. While revolutionary, this model was capital inefficient by design.

The Era of Connectivity (DeFi 2.0)

As the market matured, the focus shifted to connecting these islands. Ecosystems like Curve and Convex demonstrated the power of composability, stacking yield and utility. Simultaneously, DEX Aggregators like 1inch emerged to unify execution. They streamlined the frontend experience by routing orders across multiple DEXs to optimize rates. However, this created only a layer of connectivity; it did not fundamentally alter the passive, reactive nature of the underlying liquidity. The aggregator merely finds the "least bad" path through existing inefficient pools.

The Intent-Based Era

In pursuit of gas efficiency and MEV protection, recent architectures like CoW Swap and 1inch Fusion introduced intent-based mechanisms. While these systems addressed specific pain points through batch auctions, they introduced new structural flaws by outsourcing execution to third-party offchain solvers. Specific pain points emerged:

• The Principal-Agent Problem: Solvers optimize for their own profit margins, not necessarily the user's best execution price.

• Structural Latency: Mechanisms often require waiting periods, creating a "Free Option" for solvers to exploit market movements against the user before settlement.

• Opaque Liquidity: The reliance on private inventory makes the actual source of liquidity unverifiable.