Composable’s ecosystem-agnostic intent settlement framework, MANTIS (Multichain Agnostic Normalized Trust-minimized Intent Settlement) strives to ensure that all participants are incentivized and properly rewarded for participation. Of course, solvers, users, and other individuals within the system have a rewards scheme. However, we also want to implement a more unique form of incentive: enabling protocols to bid for orderflow for transactions being settled from MANTIS.
Thus, we introduce the concept of protocol bidding to MANTIS. Essentially, protocols are able to provide a bid in the form of tokens to the MANTIS protocol. The size of this bid is considered by solvers in the algorithm that they use to determine an optimal settlement route for the user transaction intent. The bid volume is also taken into account when potential solutions are being scored, with solutions including protocols participating in bidding being ranked higher. As a result, protocols that bid to MANTIS increase their chances that MANTIS intent transactions will be settled using their platforms. The tokens bidded by these protocols will be used to offset user gas fees, as described in this previous forum post.
In the current post, we explore the concept of protocol bidding and the benefits that it delivers to various stakeholders in MANTIS and the Composable ecosystem.
We want protocols to have an opportunity to influence order flow routed through their platforms from MANTIS, to the mutual benefit of themselves and users (i.e. by providing tokens). Therefore, one component solvers must consider in the auction process of determining an optimal solution is whether or not protocols have preloaded tokens to the MANTIS problem smart contract, effectively “bribing” for order flow. The solver algorithm must take these preloaded tokens/incentives into account. Thus, protocols can essentially bid on or “campaign” for order flow; this can be done by new or existing protocols.
Protocols would participate in bidding via a 3-step UI process, loading tokens for solvers, and then loading up tokens for gas rebates for users. Then, the relayer (and solvers, if both roles are combined) can take from the contracts post-settlement (once they have proof of fulfillment).
An example of how this would work would be:
Imagine USDC/ETH is roughly trading at the same price on multiple DEXes:
Any new/recently-launched DEX (let this be called “X new DEX”)
Let’s assume that X new DEX is located on Solana. They just recently launched and are interested in driving their volume up. Instead of putting up liquidity mining incentives, they could instead bid for orderflow on MANTIS, as shown in the diagram below:
As long as the value of the bid is less than the value of the volume multiplied by swap fees, then it is a profitable trade for the DEX protocol. I feel as though new protocols would use this often to drive volume to their DEX. Moreover, this could be generalized to other protocols like perps, lending, and essentially any other on-chain activity, including NFT purchases.
Overall, this would work as follows:
Protocols (such as DEXes) top up the problem smart contract with certain tokens into certain pools
Solvers take the above into account in their solution calculations
If protocols are successfully chosen as a component of the solution for the solver (and this solver has presented the best solution out of all solvers), then the order flow is routed through the protocol
One interesting extension of this could be that applications could be allowed to bribe specific teams on the MANTIS application that are constantly on the leaderboard. These teams could be run via KOLs.
This requires a problem smart contract within MANTIS, which would be able to receive pre-loaded tokens.
Our “problem” contract would have xc-account
All solutions will be routed by MANTIS from the problem origin contract so it will have access to xc-account
on each chainSo, the problem contract will have access to any tokens on that account
Reasonably, these accounts would have to have at least native tokens for gas fees and bridge fees
Or, the protocol can have xc-account
and do extended allowance to MANTIS sent from the problem origin so the solution can peek into the allowance and pay fees
This would also require the UI for protocols to (1) initiate and submit tokens for their campaigns, and then to (2) subsequently monitor these campaigns.
There are a number of benefits from protocol bidding. First, protocols participating in campaigns will benefit from increased order flow (in fees, liquidity, etc.). This solution also improves the chances that a user’s transaction will be fulfilled, given that there are tokens readily available from these campaigns. Bidded tokens can also offset user gas fees, making the transaction less expensive for the user (or for the solver, if the solver is paying for users’ gas). Composable itself will benefit as well, as we can use this process to earn revenue before the rest of the stack is fully built up, allowing us to optimally continue to build our ecosystem.
In developing our novel ecosystem-agnostic intent settlement platform, Composable is able to introduce a novel incentive scheme, which we refer to as “protocol bidding”. In protocol bidding, various DeFi protocols (such as exchanges like Uniswap, Astroport, etc.) can submit bids in the form of tokens to the MANTIS problem smart contract. These bids are then taken into account by solvers as a part of their optimal solution generation algorithm. Solutions including settlement along protocols that participated in protocol bidding are ranked higher in our scoring system for potential solutions. Thus, protocols are able to incentivize solvers to create solutions that route orderflow through these protocols. This benefits all participants, including users, solvers, and of course the protocols themselves.