TL;DR
- Launch of an intent-based protocol to combat MEV attacks, which have generated nearly $17 billion in profits in the past month.
- Allows users to define their trading intent instead of exposing raw transactions to mempools.
- Includes intent preprocessing, auction execution strategies and final execution through the Portikus Swap module.
ParaSwap has taken a major step in the fight against MEV attacks with the launch of its new intent-based protocol.
MEV, or maximum extractable value, attacks have proven to be a significant source of illicit profits in the world of decentralized finance (DeFi).
🚀 We’re excited to bring ParaSwap Delta to life: the ParaSwap intent-based trading protocol is now LIVE!
No more gas fees or front-running attacks, just seamless, secure trades 🔐https://t.co/0E3H15nFjZ
👇 Here's why you need to experience this next-level DeFi trading. 🧵 pic.twitter.com/7NNNnI0bR3
— ParaSwap (@paraswap) August 19, 2024
According to recent data from EigenPhi, these attacks have generated nearly $17 billion in profits for the attackers in the past month.
The most common attacks, such as sandwich transactions, have allowed attackers to manipulate user transactions to gain profit at the expense of market efficiency and fairness.
ParaSwap’s new Delta protocol is designed to provide an effective solution to this problem.
Unlike traditional methods that expose raw transactions to mempools, facilitating MEV mining, the intent-based protocol allows users to clearly define their trading intention.
This means that instead of sending transactions directly to the mempool, users can specify their target, such as a desired price range, and this target is used to execute the transaction in a more protected and efficient manner.
The Delta protocol execution process takes place in three stages.
First, preprocessing is performed in which the user’s intent is defined.
This intention is put up for auction in which artificial intelligence agents compete to find the most effective execution strategy.
Finally, the winning agent executes the transaction using the Portikus Swap module, following the user’s intention and minimizing the risk of MEV exploitation.
The introduction of this protocol is a direct response to the MEV mining boom that occurred during the DeFi boom in 2021.
During that period, certain protocols, such as Uniswap, were frequently targeted by automated attacks that raised concerns about market manipulation.
While ParaSwap’s new model does not completely eliminate the risk of exploitation by miners and validators, it represents a significant step towards greater fairness and efficiency in the DeFi ecosystem.
Progress in Paraswap MEV protection
ParaSwap’s innovation aligns with the efforts of other players in the decentralized finance space who are also working to mitigate the negative effects of MEV.
For example, other liquidity aggregators, such as 0x, have developed mechanisms to combine transactions into a single batch, which helps reduce opportunities for attack, and prioritize transactions based on criteria other than profitability.
ParaSwap’s Delta protocol not only seeks to address current MEV-related issues, but also represents a step towards improving user experience and fairness in the DeFi ecosystem at large.
With a track record that includes over $76 billion in transactions since its launch in 2019, ParaSwap continues to evolve and expand its support to more chains and automated strategies.
The integration of AI-powered agents promises to add an additional layer of sophistication in transaction management, reinforcing the platform’s commitment to greater security and efficiency in the marketplace.
