Phase 2: Pattern Recognition
Our second phase focuses on “empowerment”.
Jigsaw’s second phase will be powered by “intents”, with the help of our partner Tsumori.
With intents a user only needs to define their desired end state and potential constraints. The user does not need knowledge about “how” to achieve said end state. This “how” is taken care of by professional entities, often in competition with each other, called “solvers”. All of this is possible while retaining crypto’s key properties of self-custody and trustlessness.
As a primer on intents we recommend reading Paradigm's article. We will not cover the basics of intents here.
The challenge of V1 will be centered around integrations. Every whitelisted protocol and action needs to specifically be implemented and maintained.
This also means that the degree of flexibility we can offer to our users has a ceiling. We need to specifically choose the details of the strategy implementation.
Let’s take a look at a simple practical example: compounding.
Jigsaw must be opinionated about the integration of compounding for available strategies.
For instance, a strategy can say that reward tokens are sold regularly and proceeds are compounded to increase the original position.
However, different users have different preferences. Some may prefer to not compound at all and rather hold the reward tokens. Others may want to hold until the value of their reward tokens surpasses a set threshold. And some users will want to compound as aggressively as possible and not be exposed to the volatility of the reward token at all.
In the current paradigm of vaults there’s no way in which we can realistically support all those preferences. Every such user preference setup would need to be represented as one individual strategy. Each requiring development, maintenance, testing, auditing and obviously also an integration into the UI that is not overwhelming.
Now imagine that we would need to even replicate this for every protocol.
Obviously, this is infeasible and keeps us from truly achieving our goal of unparalleled flexibility
Meet Jigsaw V2
Jigsaw V2 will be powered by intents, which allows us to transcend the aforementioned limitations and lets us to double down on Jigsaw’s unique differentiators – positioning Jigsaw as a true innovator of the next wave of intent-powered DeFi protocols.
Unlimited Technical Scalability
Let us go back to the basics of intents. A user only needs to express a desired end state and optionally additional constraints, while the “how” gets taken care of by professional entities called “solvers” in a fully self-custodial and trustless manner.
Jigsaw users are able to use their collateral for any type of DeFi action, including lending / borrowing, swaps and more.
It is imperative to understand that solvers are now the ones maintaining integrations. Jigsaw will only output an intent, which then gets solved for. Solvers take care of all output actions such as moving funds into new protocols and routing across DEXs for the most optimal execution quality.
Through the usage of solver auctions, effectively a competition between multiple solvers, Jigsaw will be able to guarantee users optimal execution.
All of this increases scalability massively by removing technical bottlenecks. Effectively, allowing Jigsaw to very quickly scale to new chains and integrate new protocols.
Highly Customizable Automation Flows
As shown earlier, we want to be able to offer users full flexibility. This boils down to offering users individual custom strategies. Every user may have different preferences, especially around risk.
Intents allow us to stay fully flexible and allow users to specifically express highly customizable preferences.
Effectively, users should be able to fully express detailed parameters, defining the automation flows of their personalized strategy.
Let us dive into an example to clarify this:
User A and B both hold USDC as collateral in Jigsaw and deploy it into the same strategy on Arbitrum. Said strategy pays out USDC yield plus yield in the form of the respective protocol’s native token.
Both users have different preferences about how to handle the token yield component.
User A: “On a daily basis, I want to sell my token rewards and compound into my USDC position.”
This is relatively straightforward and a risk averse strategy.
User B: “I only want to sell my token rewards whenever the total value of my token rewards is equal or higher than $5,000. I also want to sell 50% of my token rewards whenever the price of the token increases by 75% in a day. Every time my tokens are sold, please use 50% of the funds to top up my connected crypto debit card and the other 50% to buy ETH. Then take out more jUSD against the ETH and leverage into my original farming position.”
This showcases the unparalleled flexibility we talk about.
Keep in mind that this is only one example.
Imagine being able to apply such surgical precision to every single parameter of a strategy:
How to optimize and rebalance your portfolio between multiple yield farming strategies, even across multiple chains
When to take profit for positions and allocate between multiple tokens or positions
Under which conditions to exit a potentially risky farm
And much more. The only limit is your imagination and definitely not a technical bottleneck anymore
As you can see, this requires an advanced automation protocol that supports conditional intents. For this, we are partnering up with Tsumori, who are building a domain agnostic execution engine that supports advanced data dependencies, fully powered by intents.
The execution engine will enable the simplest cross-chain transactions all the way to more complex automations where users can chain actions together to create novel logic chains with unique conditionals
Summary of Phase 2
In summary, intents allow us to move from an integration-heavy bottlenecked paradigm to one where we can not only scale way faster, but also fully realize our vision of dynamic collateral. All while maintaining optimal execution quality for users.
All of this means that Jigsaw can fully focus on scaling demand for jUSD and partners, without having to worry about technical scalability limits.
Jigsaw will be uniquely positioned and push the frontier of money markets by rethinking the role of collateral.
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