DeFi Users Face Threats from MEV Bots; Intent-Based Protocols Offer a New Solution

Decentralized finance (DeFi) users often believe they interact directly with automated market makers when swapping tokens on platforms like Uniswap or SushiSwap. However, this model has a significant problem: it makes DeFi transactions vulnerable to MEV bots that monitor pending transactions and execute sandwich attacks.

MEV bots extract value from the spread between the price of a transaction before it's executed and after. By 2023, cumulative profits from MEV extraction on Ethereum exceeded $600 million, with a significant share coming from sandwich attacks on retail swaps. To address this issue, intent-based protocols have been developed.

Intent-based protocols restructure the flow of transactions by allowing users to sign an intent, a declarative statement of their desired result, rather than specifying every execution detail. A network of solvers then competes off-chain to fill that intent at the best possible price without exposing the order to the public mempool.

Two prominent protocols implementing this model are CoW Protocol and UniswapX. CoW Protocol pioneered batch auctions, where solvers compete to fill all orders simultaneously within a window (approximately 30 seconds). This format helps gas costs being amortized across the batch.