Intent Based Smart Contracts: Definition, Types, Examples, and Challenges
MC² Finance Team
3 min read
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You’ve likely used apps where you set everything once, and the rest happens like magic.
But what if that level of ease could be applied to every move you make in the DeFi world?
In this article, we’ll understand how intent-based smart contracts simplify DeFi tasks like automated trading, cross-chain transfers, yield farming, NFTs, and lending. Plus, we’ll cover the challenges and how MC² Finance has got your back.
What are intent-based smart contracts?
An intent-based smart contract is a type of automated agreement that carries out specific actions based on your stated intentions or goals, without needing manual intervention.
Traditional smart contracts on steroids = Intent-based smart contracts. Source: X
How they differ from traditional smart contracts?
In traditional smart contracts, all the terms and execution logic must be fully defined upfront, and the contract executes automatically once specific conditions are met.
Limitations of traditional smart contracts. Source: X
However, intent-based smart contracts allows you to express high-level goals (or “intents”), with the contract dynamically interpreting and executing the necessary actions across various platforms, often involving complex multi-step or multi-chain operations.
Types of intent-based smart contracts (with examples)
Below are some of the most common types of intent-based smart contracts:
Automated trading contracts
Cross-chain contracts
Yield farming contracts
NFT marketplace contracts
Lending/borrowing contracts
1. Automated trading contracts
Automated trading contracts let you set up rules for buying or selling tokens based on price targets, so you wouldn’t need to monitor the market constantly.
Example:
pragma solidity ^0.8.4;
// SPDX-License-Identifier: MIT
contract AutomatedTrading {
address public owner;
uint256 public targetPrice;
address public tokenAddress;
// Initializes contract with the owner and the target price for automated trading
targetPrice = _targetPrice; // Price at which trade will execute
tokenAddress = _tokenAddress; // Token to trade
}
// Function to execute trade if the target price is reached
function executeTrade(uint256 currentPrice) public view {
require(currentPrice >= targetPrice, "Target price not reached");
// Execute trade logic here
// For example: Buy or sell tokens based on predefined strategy
}
}
In the example above, you set a target price (via the constructor function), and once the market hits that price, the contract automatically makes the trade for you (executeTrade).
2. Cross-chain contracts
Cross-chain contracts allow you to move your tokens across different blockchains (e.g., Ethereum → Binance).
Example:
pragma solidity ^0.8.4;
// SPDX-License-Identifier: MIT
interface ICrossChainBridge {
function transfer(address to, uint256 amount, address tokenAddress) external;
}
contract CrossChain {
ICrossChainBridge public bridge;
// Initializes the cross-chain bridge
constructor(address _bridge) {
bridge = ICrossChainBridge(_bridge);
}
// Function to send tokens across chains
function crossChainTransfer(address to, uint256 amount, address tokenAddress) external {
bridge.transfer(to, amount, tokenAddress); // Transfer tokens to a different chain
}
}You don’t need to worry about managing separate wallets or complex transfers—the contract connects to a cross-chain bridge (via constructor) and handles the transaction (crossChainTransfer).
3. Yield farming contracts
Yield farming contracts automatically move your tokens between platforms to maximize your potential growth.
Example:
pragma solidity ^0.8.4;
// SPDX-License-Identifier: MIT
interface IYieldProtocol {
function stake(uint256 amount) external;
function withdraw(uint256 amount) external;
}
contract YieldFarming {
IYieldProtocol public protocol;
// Initializes the yield farming protocol
constructor(address _protocol) {
protocol = IYieldProtocol(_protocol);
}
// Function to automatically stake funds
function autoStake(uint256 amount) external {
protocol.stake(amount); // Stake the specified amount in the yield protocol
}
// Function to withdraw staked funds
function autoWithdraw(uint256 amount) external {
protocol.withdraw(amount); // Withdraw the specified amount from the yield protocol
}
}
Instead of manually searching for the best opportunities, the contract stakes your tokens in the platform offering the most favorable conditions (via autoStake) and withdraws them when necessary (autoWithdraw).
4. NFT marketplace contracts
Similarly, NFT marketplace contracts automate processes like buying, selling, and auctioning NFTs based on your intent.
Example:
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.4;
interface INFTMarketplace {
function listNFT(uint256 tokenId, uint256 price) external;
function bidOnNFT(uint256 tokenId, uint256 bidAmount) external;
}
contract NFTMarketplace {
INFTMarketplace public marketplace;
// Initializes the NFT marketplace by linking to an existing NFT marketplace contract
constructor(address _marketplace) {
marketplace = INFTMarketplace(_marketplace);
}
// Function to list NFT for sale, interacting with the external contract
function listMyNFT(uint256 tokenId, uint256 price) external {
marketplace.listNFT(tokenId, price); // List the specified NFT for sale at a defined price
}
// Function to bid on NFT, interacting with the external contract
function placeBid(uint256 tokenId, uint256 bidAmount) external {
marketplace.bidOnNFT(tokenId, bidAmount); // Place a bid on the specified NFT
}
}
You set the rules, like the price at which you want to sell (via listMyNFT), and the contract lists or sells the NFT or set bids (placeBid).
5. Lending/borrowing contracts
Lending and borrowing contracts allow you to automatically manage loans within DeFi platforms.
Example:
pragma solidity ^0.8.4;
// SPDX-License-Identifier: MIT
interface ILendingProtocol {
function depositCollateral(uint256 amount) external;
function borrow(uint256 amount) external;
function repayLoan(uint256 amount) external;
}
contract LendingBorrowing {
ILendingProtocol public protocol;
// Initializes the lending protocol
constructor(address _protocol) {
protocol = ILendingProtocol(_protocol);
}
// Function to deposit collateral
function depositCollateral(uint256 amount) external {
protocol.depositCollateral(amount); // Deposit collateral to secure a loan
}
// Function to borrow funds
function borrowFunds(uint256 amount) external {
protocol.borrow(amount); // Borrow the specified amount of funds
}
// Function to repay a loan
function repayLoan(uint256 amount) external {
protocol.repayLoan(amount); // Repay the borrowed amount