30s Summary

Intent-based trading, a simplified way to engage with DeFi, could significantly change how we interact with it. It allows investors to set their goals and lets automated systems handle trading to achieve those goals, across different blockchains. This approach was born out of previous rule-based and signal-based trading systems, and smart contract automation that faced challenges in flexibility and cross-blockchain management. MC² Finance has developed an intent-based trading system which uses smart contracts, advanced algorithms and cross-chain compatibility to optimize yields according to user’s intents. It simplifies DeFi, making it more accessible to everyone.

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Let’s break it down — decentralized finance (DeFi) can be pretty tricky to get your head around. Switching between platforms, trying to understand all those complex rules, and managing your assets across different blockchains can be tough. But what if there was a simplifier and super convenient way to engage with DeFi? What if you could set your financial goals, and one app took care of all the trading to meet them? That easier way is called intent-based trading, and it could be a game-changer in the way we interact with DeFi.

We’re here to take a closer look at intent-based trading and whether it’s just a hot trending topic or the next big leap in financial tech.

Intent-based trading is a smarter approach to investment where you set your goals (maybe you’re investing in eco-friendly coins or aiming for high returns) and let an automated system handle the trading to meet those goals. In the past, as an investor, you had to handle different wallets, hop between platforms, and track many tokens and strategies. But with intent-based trading, the system executes your investment plan across different blockchains, expanding your assets while you chill.

Let’s get a little history lesson. It all began with simple, rule-based trading systems around 2016-2018. These systems used rules like “buy this token if its price drops by 10%” or “sell that token if it gains 20% profit”. Trading bots or custom scripts helped automate these actions. But these bots only worked on a single blockchain, say Ethereum, and weren’t quite flexible enough to respond to a rapidly changing market. This led to the need for more flexible and competent systems that could manage risks across different blockchains.

That’s where signal-based trading came in, around 2017-2019. It improves on rule-based systems by using market signals like alerts driven by algorithms and social media trends. This is kind of like getting expert investment advice or using apps that tell you when a token’s price might go up or down. DeFi platforms like TokenSets and dYdX even allowed traders to follow the signals of more experienced traders. But managing trades across different blockchains was still a bit of a pain, and many signals didn’t cater to individual needs.

Smart contract automation (which has been popular from 2018 till now) changed the game by allowing traders to automate complete investment strategies directly on the blockchain. This removed the need for manual participation. Platforms like Uniswap and Balancer introduced Automated Market Makers (AMMs), which automatically gave users liquidity and earned them fees whenever others traded tokens. No more endless market monitoring or manual trading! Others, like Yearn.finance, enhanced automation even more by letting users deposit tokens into smart contracts that automatically scoped out the best yield farming opportunities. Despite these advances, the systems still struggled to work with each other across different blockchains.

This is where intent-based trading steps up. Born in 2022, it aims to resolve the issues of other systems by creating goal-oriented automation that takes care of the trades. The folks at MC² Finance have created a system that allows users to set their investment goals and then automatically carries out strategies across multiple blockchains to achieve them. Their system uses advanced algorithms, smart contracts, and cross-chain compatibility to trade and optimise yields according to the user’s instructions. By simplifying the complexities of DeFi, intent-based trading could make the ecosystem more accessible to everyone, whether you’re new to investing or a seasoned trader.

There’s a lot to love about intent-based trading. For one, it offers a simple user experience. One of the main issues with DeFi is managing assets across different blockchains. Every blockchain has its unique needs and interfaces. MC² Finance makes this easier through account abstraction, basically bringing all blockchain interactions under one, user-friendly roof.

Next up, you get smarter investment strategies. Most of today’s automation is tied to one blockchain and can’t operate across several ones, so it’s not as adaptable as it could be. MC² Finance uses crowd-sourced intelligence, allowing you to create and follow self-executing, purpose-driven smart portfolios that have crazy-good cross-chain capabilities.

Also, cross-chain liquidity (the ability to switch tokens smoothly no matter which blockchain you’re using) is a common problem in traditional trading. Token prices often vary across platforms, and this becomes even more complex in DeFi, as tokens can exist on multiple blockchains, each with its separate liquidity pools. MC² Finance addresses this issue through cross-chain liquidity aggregation, ensuring you always get the best price for your trades no matter which blockchain you’re on.

In conclusion, intent-based trading is a massive step towards making DeFi more straightforward and user-friendly. It allows you to set your financial goals and leverages smart systems to meet those goals. This opens up complex financial strategies that were once reserved for professional traders to everyone.

Before we go, remember that this informationis for general purposes and that you should do your own research or consider seeking advice before making any investment decisions. Do what’s best for you! And always – happy trading!

Source: Cointelegraph