Foresight Ventures: Intent asset—Web3 asset large-scale application entry point

Author: Mike@Foresight Ventures

The Revolution of Idle Assets

In 2013, Alibaba's Yu'e Bao emerged, bringing asset management into a whole new era. Before this, ordinary users found it difficult to find a safe and efficient way to manage their idle funds. Bank savings rates were low, and financial products were complex and hard to understand. The birth of Yu'e Bao changed everything.

The Birth of Yu'e Bao

It was a time when internet finance was just rising, and the Alipay team realized that users often had idle funds in their payment accounts. If these funds could be invested, it would not only bring returns to users but also enhance their experience. Thus, they partnered with Tianhong Fund to launch a product called "Yu'e Bao."

Yu'e Bao is easy to operate; users just need to click a few times in the Alipay app to transfer their account balance into Yu'e Bao and start enjoying daily settlement returns. This transparent and convenient way of managing finances quickly won users' favor. Soon, the number of Yu'e Bao users surpassed ten million, and the scale of managed funds rapidly increased.

Opportunities in Web3

With the development of blockchain technology and Web3, a new era of asset management is on the horizon. Products similar to Yu'e Bao are also emerging in the Web3 space.

The Web3 version of Yu'e Bao has enormous potential because it can fully leverage the many advantages brought by blockchain technology and the vast market opportunities provided by the current large amount of idle assets on-chain:

1. Hundreds of Billions of Idle Assets On-chain

There are a large number of underutilized assets in the blockchain ecosystem, with a total value reaching hundreds of billions of dollars. Many users store their cryptocurrencies in wallets, waiting for market prices to rise, while these assets do not generate any returns during the idle period. The Web3 version of Yu'e Bao can effectively utilize these idle assets by providing functions similar to money market funds in traditional finance, offering users stable returns. This model not only increases the utilization of user assets but also promotes liquidity and activity in the entire blockchain ecosystem.

2. Decentralization and Transparency

The Web3 version of Yu'e Bao is based on blockchain technology, which has the advantages of decentralization and transparency. Unlike traditional financial institutions, users can directly invest through smart contracts without relying on intermediaries. This decentralized model reduces intermediaries, lowers operational costs, and improves investment efficiency. Additionally, all transactions and fund flows are recorded on the blockchain, allowing users to view and verify at any time, enhancing user trust.

3. High Liquidity and Convenience

Compared to traditional financial products, the Web3 version of Yu'e Bao typically offers higher liquidity. Users can deposit or withdraw funds at any time without worrying about lock-up periods or early redemption penalties. This high liquidity makes the Web3 version of Yu'e Bao more flexible, catering to users' diverse needs. Furthermore, with a user-friendly interface and simple operational processes, the Web3 version of Yu'e Bao can provide users with a convenient investment experience.

4. Diversified Sources of Returns

The Web3 version of Yu'e Bao can utilize various decentralized finance (DeFi) protocols on the blockchain to provide users with diversified sources of returns. For example, users can earn returns by participating in lending protocols, liquidity mining, staking, and more. Unlike traditional money market funds, these sources of returns may include not only interest but also platform token rewards, making users' investment returns richer and more diversified.

5. Broader User Coverage

Blockchain technology allows the Web3 version of Yu'e Bao to reach global users without being constrained by geographical and national limitations. Any user with internet access can participate in investments, bringing vast market prospects. Especially in regions where traditional financial services are underdeveloped, the Web3 version of Yu'e Bao can provide users with a new way to manage their finances, filling the gap in financial services.

In the Web3 space, the emergence and development of LST (Liquid Staking Tokens) and LRT (Liquid Re-staking Tokens) demonstrate the enormous potential and opportunities in this market. Although most products can generate stable returns, their application scenarios remain relatively limited. Yu'e Bao not only supports peer-to-peer transfers but also allows shopping on Taobao, providing an experience almost indistinguishable from a bank account. However, the existing Web3 products in the market have not yet reached the level of widespread application like USDT or ETH.

The Traditional TVL Model is Stalled

During the bull market in the crypto market in the first half of this year, "Total Value Locked" (TVL) became the core metric for promoting various projects. TVL is typically used to measure the total amount of assets locked in DeFi projects, reflecting user participation and market trust in a project. It has been a relatively effective metric in past crypto market cycles because TVL represents actual "real money," and the cost of falsifying it is much higher compared to other data metrics like address counts or social media followings. Therefore, projects with high TVL have a clear advantage in market promotion and attracting investors.

Against this backdrop, many projects attracted users by offering high yields and airdrop incentives to store assets on their platforms, rapidly boosting their TVL data. This strategy aimed to showcase the project's strength and appeal; however, it has exposed some issues in this cycle.

The Stagnation of TVL

As the market evolved, investors discovered significant problems with the TVL narrative in this cycle. Many projects saw their TVL rapidly decline after issuing tokens and listing on exchanges. These TVLs were not contributed by a broad base of crypto users but were instead quickly inflated by a few large holders or pre-arranged partners through "mining, withdrawing, and selling" to cash out in the short term. This "stagnant TVL" does not represent the true vitality of the project's ecosystem but rather reflects artificially manipulated short-term data spikes.

This phenomenon has triggered broader industry issues, such as some high TVL projects repeatedly delaying airdrop distributions or unlocking user assets due to concerns that once cashed out, these TVLs would quickly dissipate. As a result, TVL's credibility and effectiveness as a measure of an on-chain ecosystem's vitality have come into question.

Why Does TVL Stagnate?

The stagnation of TVL stems from the fact that, for ordinary crypto users, the absolute returns from participating in these projects are limited, and once market fluctuations occur, the costs for users to withdraw assets or convert them are relatively high, or they may need to wait a long time, potentially missing market opportunities. In other words, the opportunity cost of participating in these projects is too high for ordinary users, leading to low participation willingness, which results in TVL being dominated by large holders, becoming a tool for their cashing out.

In-depth Discussion: TVL Projects Struggle to Meet Users' Asset Utilization Needs

Project teams have recognized this issue and attempted optimizations, but these measures often yield limited results and fail to truly meet user needs. Current TVL projects mainly offer two ways for users to exit their assets: one is for users to actively apply to the project team for asset redemption, and the other is to exchange through derivative assets (like xxETH) on decentralized exchanges (DEX).

However, regardless of the method, ensuring that users have a good liquidity experience requires someone to bear high maintenance costs. For example, in the redemption scheme, the project team needs to bear ongoing maintenance costs, which often leads to users having to wait a long time to redeem their assets; in liquidity pool schemes, liquidity providers (LPs) also need to bear costs, which often results in insufficient pool depth, high slippage, and even significant price differences between derivative assets and native assets during market fluctuations.

Therefore, when liquidity solutions require specific parties to bear high maintenance costs, these costs ultimately get passed on to users, leading to a poor user experience. To solve this structural problem, fundamental reforms are needed at the underlying level. After in-depth research, we found that the Intent Assets recently launched by dappOS can effectively address this challenge.

dappOS Intent Assets: Making Yield Assets Available On-chain Anytime

dappOS is an intent execution network that has received investments from top institutions like Binance Labs and Polychain, with a latest valuation of $300 million, making it a leading project in the intent space. The intent assets launched by dappOS allow users to enjoy high asset yields while ensuring their assets are always available on-chain, whether withdrawing intent assets in the form of native assets to exchanges or purchasing new MEME tokens on-chain, users can use them directly. Users can directly use intent assets for trading and transferring without long wait times or high slippage.

The reason intent assets can achieve this is due to the dappOS intent execution network behind them. This network consists of numerous decentralized service providers. When users express a need to "convert intent assets," the network queries these service providers for quotes and finds the most suitable one to complete the task. Each service provider can quote based on their situation and fulfill user needs at the lowest cost. The network does not care about the specific methods used by service providers but focuses on whether the task can be completed within the specified time.

In this way, the dappOS intent execution network eliminates the need for a single service provider to bear high maintenance costs, achieving a dynamic balance between liquidity maintenance costs and actual demand. Since the network allows service providers to use on-chain or off-chain solutions, such as utilizing tools from centralized exchanges, this further reduces liquidity maintenance costs and optimizes user experience.

What is Intent Asset?

Intent Asset is a new type of asset supported by dappOS that can automatically adapt to different scenarios and generate interest when idle. Similar to the principle of Yu'e Bao, it aggregates yield generation and application scenarios such as Pendle, Babylon, Benqi, Berachain, BounceBit, Ether.Fi, GMX, KiloEx, Manta, Puffer, Pendle, QuickSwap, Taiko, Zircuit, etc., and executes them through the intent network's nodes in the backend, allowing intent assets to generate yields while having a wide range of application scenarios.

Taking stablecoins as an example, dappOS provides a flexible asset called intentUSD. This asset can not only be used as currency but also generate interest when idle. This innovative approach allows stablecoins to automatically convert between different forms based on user needs. For instance, when USDT is needed, intentUSD can be used as USDT; when trading USDC, intentUSD can convert to USDC.

dappOS helps users handle staking, unstaking, and conversion of yield-generating assets through its intent execution network, ensuring direct availability in different scenarios. As a result, intent assets functionally align with native assets like USDT or ETH, while continuously generating yields when idle.

Key advantages include:

• Instant Redemption: No waiting period or lock-up period.
• High Yield: For example, the annual yield for USDT/USDC is 12%, and for ETH, it is 7%, with yields distributed in real-time without waiting for token issuance.
• Convenient Use: When interacting with dApps or withdrawing to exchanges, USDT/ETH balances load directly, providing an experience indistinguishable from native USDT/ETH.

In this way, intent assets not only match the functionality of native assets but also continuously generate yields when idle, significantly improving the efficiency and yield level of user assets.

Interaction Example:

The following image shows the interface of intent assets generating normal yields after being created in dappOS.

When we switch to Benqi, we find that Benqi automatically recognizes intentUSD as USDT and can be used normally.

When we go to the syncswap interface, intentUSD is also recognized as USDT/USDC. In different dApps, intentUSD can be used as the USD asset supported by that dApp.

The application scenarios for Intent Assets are very broad, with unique advantages in different customer groups and scenarios:

DeFi Player: Alex

Alex is an experienced DeFi player familiar with various decentralized finance protocols and tools. One day, he discovered dappOS's Intent Assets and thought it was a great opportunity to utilize his existing assets.

Alex has some idle ETH, and he decides to convert this ETH into intentUSD to generate yields. He stakes intentUSD in dappOS's liquidity pool to start earning staking rewards. Later, he sees a new liquidity mining project offering high returns, so he transfers some intentUSD to that project's liquidity pool for additional rewards.

Soon after, Alex needs some stablecoins to participate in an emerging DeFi project. He converts some ETH into intentUSD and directly uses it in this DeFi project. This way, he maintains asset flexibility while maximizing returns across different DeFi platforms. Alternatively, if Alex wants to add margin on GMX in Arbitrum for perpetual contract trading, he finds he can directly use intentUSD as USDC without additional conversion steps.

New Player: Lisa

Lisa is not very familiar with Web3 and cryptocurrencies, but she has heard many stories about digital assets and DeFi, so she decides to give it a try. She buys some USDT but doesn't know how to better utilize these assets.

Through a friend's recommendation, Lisa learns about dappOS's Intent Assets. She decides to convert her USDT into intentUSD. Initially, she just keeps intentUSD in her wallet, checking the interest it generates daily. She is satisfied with this simple and convenient way of managing finances, as the returns are significantly higher compared to traditional bank deposits, and she doesn't need to convert to other assets or deal with complex cross-chain or staking operations.

One day, Lisa wants to withdraw some interest to buy groceries. Unfamiliar with on-chain operations, she tries to withdraw IntentUSD directly to an exchange and then use the exchange's debit card for purchases. Because she is not well-versed in on-chain operations and has faced difficulties before, she is pleasantly surprised to find that IntentUSD can be smoothly withdrawn to the exchange and magically converted into USDT/USDC, with gas fees settled using IntentUSD.

Institutional Investors

Imagine a traditional large investment institution responsible for managing billions of dollars in assets. They have a strong interest in blockchain and DeFi and are looking for stable and efficient investment methods.

They notice dappOS's Intent Assets and see it as a good opportunity to optimize fund management. The institution decides to allocate part of its funds to intentUSD to achieve stable returns without affecting liquidity. They utilize dappOS's Intent execution network to convert and diversify investments in intentUSD across different chains to reduce risk.

The institution also uses intent assets to participate in various high-yield DeFi projects. For example, they allocate some intentUSD for liquidity mining to earn additional rewards. Meanwhile, in the event of market fluctuations, they can withdraw intent assets at any time, ensuring they can quickly convert to fiat currency for emergency handling, guaranteeing immediacy and flexibility in entry and exit, achieving stable return growth. Additionally, due to the characteristics of the intent network, security is also ensured, allowing for efficient management and optimization of their asset portfolio.

Whether experienced DeFi players, new Web3 entrants, or large institutional investors, dappOS's Intent Assets provide solutions that adapt to different needs. Through these stories, we can see the wide application and enormous potential of Intent Assets in various scenarios, helping users achieve efficient asset management and maximized returns in the blockchain world.

The Principle of Intent Assets

Intent Assets leverage the unique capabilities of the dappOS execution network, taking users' ordinary or intent assets as input and outsourcing complex settlement tasks to the network's service providers to achieve the desired results. Users do not need to worry about the underlying operational processes; they can focus on the final outcomes of their transactions, such as earning yields, completing interactions with dApps, and withdrawing to centralized exchanges.

The OMS (Intent Management System) mechanism of dappOS grants nodes a high degree of freedom to optimize costs and efficiency without compromising user security. The OMS mechanism assigns a predetermined value to each intent task, allowing nodes to flexibly adjust resources based on actual conditions to achieve optimal performance and cost-effectiveness. This way, users' intent tasks can be executed at the fastest speed and lowest cost, ensuring a smooth and efficient user experience while maintaining a high level of security for user assets.

The dappOS Intent execution network not only handles different types of intent tasks but also ensures these tasks are seamlessly compatible across different blockchains and decentralized applications. Users can freely use Intent Assets in a multi-chain environment without worrying about compatibility issues between different assets. For example, users can withdraw intentUSD as USDT from exchanges when needed or use it as USDC on GMX in Arbitrum. This flexibility and compatibility allow Intent Assets to be flexibly applied in a wide range of scenarios, providing unparalleled convenience.

Users holding intent assets (such as intentUSD, intentETH, intentBTC) earn yields based on USDT, ETH, and BTC. These yields primarily come from the stable appreciation of underlying assets (such as wstETH, sUSDe, sDAI, and stBBTC) and yield-generating activities in decentralized finance (DeFi) protocols. The underlying assets are designed for steady appreciation, ensuring the stability and growth of yields, allowing users to maximize returns while maintaining asset liquidity.

Potential Future Challenges

Despite the enormous potential of dappOS Intent Assets in on-chain liquidity and global access, their success faces challenges in user acceptance, technical complexity, market competition, regulatory compliance, liquidity management, and user experience. Only by continuously optimizing and improving in these areas can they truly achieve widespread application and long-term development in the blockchain financial ecosystem.

1. Regulatory Pressure

As the scale of funds expands, regulatory agencies will impose higher requirements on the risk management of Intent Assets. As a new type of on-chain fund, Intent Assets attract a large number of individual investors, meaning that their liquidity and risk management need to be more stringent. To prevent systemic risks, regulatory agencies may introduce more restrictive measures, such as limiting individual user investment amounts or increasing liquidity requirements, which could affect the yield and user experience of Intent Assets.

2. Intensifying Market Competition

As Intent Assets gradually gain attention, they will attract a large number of competitors. Various ecosystems may launch their own Intent Assets to capture the market, offering higher APYs and strategies, or even airdrop expectations to attract users. However, dappOS's first-mover advantage in the intent network and the foresight of its team will raise this barrier.

3. Declining Yields

With market changes and the expansion of fund scales, the yields of Intent Assets may experience some fluctuations. Although the yields of Intent Assets remain competitive, the downward trend compared to earlier high yields may dampen user investment enthusiasm, leading to capital outflows. dappOS can maintain its yield leadership by aggregating more protocols or seeking new yield opportunities off-chain. dappOS's advantage lies in the fact that whenever new opportunities arise, eager MEV searchers will actively fill market gaps, capture new yields, and feed them back to users' wallets.

4. Liquidity Management

As a high-liquidity fund-type asset, Intent Assets need to respond to users' withdrawal demands at any time. This requires maintaining a certain yield while ensuring there are enough high-liquidity assets. Balancing this is a complex challenge, especially during significant market fluctuations, where ensuring sufficient liquidity is a key focus for Intent Assets.

5. Diverse User Needs

As the number of users increases, their financial management needs have become more diverse. Different users have varying preferences regarding risk, yield, and liquidity, which requires Intent Assets to provide more diversified financial products and services. However, an excess of product choices may increase operational complexity and risk, making it a challenge for Intent Assets to find a balance between meeting user needs and controlling risks.

6. Technical and Security Risks

As a financial product relying on the Solver network, Intent Assets face technical and security risks. With the increasing number of hacking incidents on-chain, rug pulls in DeFi protocols, and the resulting MEV, ensuring the safety of users' funds has become a crucial challenge for Intent Assets. Additionally, the rapid development of technology requires dappOS to continuously upgrade its Solver system to maintain competitiveness.

7. User Acceptance and Education

Although Intent Assets provide flexible yield generation methods, users need time to understand and accept this new type of asset, especially those unfamiliar with crypto assets and blockchain technology. In the long-term development of Web3, dappOS still needs to conduct extensive user education and promotional activities to help users understand how to use Intent Assets and their advantages.