From Isolated Pools to Intelligent, Intent-Based Execution
Early decentralized markets were built around a simple idea: liquidity lives in pools, and trades happen against those pools directly. This model made markets permissionless and easy to deploy, but it also introduced fragmentation. As ecosystems grew, liquidity spread across countless pools, chains, and venues—often leaving capital underutilized and execution inefficient.
As a result, focus began to shift from where liquidity is stored to how liquidity is accessed.
Onchain liquidity routing emerged as a response to this fragmentation. Instead of relying on a single pool, routing systems scan across multiple venues to assemble the best execution path for a given trade. The goal is not to move liquidity into one place, but to coordinate existing liquidity intelligently. By splitting orders, sequencing routes, or selecting optimal venues in real time, routing improves outcomes without requiring more capital.
This evolution reframes capital efficiency. In pool-centric models, efficiency depends on how much liquidity is locked and how well it’s distributed across price ranges. In routing-centric models, efficiency depends on how effectively capital is mobilized at the moment of execution. The same underlying liquidity can serve more volume if it is accessed and combined intelligently.
A further step in this direction is intent-based execution. Rather than specifying exact transaction steps, users express an outcome—such as exchanging one asset for another within certain constraints. Execution systems then determine how to fulfill that intent, choosing routes, timing, and venues that best satisfy the objective. This separates user intent from execution mechanics, allowing infrastructure to optimize dynamically.
From a technical perspective, this shift reflects growing maturity in decentralized market design. Markets are no longer defined solely by static liquidity containers, but by coordination layers that sit above them. These layers handle complexity—fragmentation, timing, and path selection—while exposing simpler interfaces to users.
Importantly, intelligent routing does not eliminate the need for liquidity; it makes existing liquidity work harder. Capital efficiency improves not because more funds are locked, but because less friction exists between intent and execution.
As decentralized markets scale, the bottleneck increasingly lies in coordination rather than capacity. Moving beyond pools toward routing and intent-based systems acknowledges this reality. It suggests that the future of onchain liquidity is not about accumulating capital in one place, but about connecting capital wherever it exists, efficiently and adaptively.
