Empowering Solvers with Solvers Protocol
Understanding Solvers and their Significance.
Solvers Protocol is an essential infrastructure solution designed to support and streamline the operations of solvers in the De Fi space. To understand the significance of this platform, it is crucial to grasp the role and requirements of solvers.
Solvers are individuals , softwares and algorithms to assist De Fi users and traders in finding optimal routes for their transactions, ultimately saving them money on gas fees and potentially uncovering profitable trade opportunities. Solvers are not limited to defi and can be extended to any requirements over time provided its reasonable.
There are various types of solvers in the ecosystem.
- Solvers that provide routes for profitable trades: For example, if a user wants to sell 1 ETH for 3000 USDC, a solver might discover that by routing the transaction through 1 ETH → 3100 DAI → 3080 USDC, the user could gain an additional 80 USDC.
- Solvers can provide route not just for token trading, but for NFT trading, new token discovery, strategy execution and much more.
- Solvers that protect users from MEV by providing routes that are safer that are not exposed to front running, back running and sandwich attacks
- Solvers that provide liquidity on demand, ensuring that users can execute their desired trades by sourcing the necessary liquidity from various pools, AMMs and protocols.
and the list goes on and on..
Solvers compete to provide the best routes and are rewarded for their efforts. Having a larger number of solvers in a protocol significantly benefits users by ensuring they receive the most advantageous routes for their intention.
But the infrastructure overhead is too much for normal people to even test out begin solvers. Some of them are as follows
- Setting up and maintaining RPC connections for various networks like Ethereum or Gnosis.
- Ensuring 24/7 uptime of their solvers to capture order flow.
- Developing code to monitor order history and profits using external services like Etherscan or Nansen.
- Keeping track of wallet status, health, and potential tax implications on profits.
- Tracking solver rewards and successful trades.
This is just the surface in terms of DevOps, provided user already knows what he's doing. And they have dedicated team to do this.
Going beyond this, making sure they have the entire blockchain state of liquidity pools, pricing info, exposure to market making etc adds even more cost making solvers not participate in the competition.
Now going cross chain goes beyond this and adds up even more cost for maintenance. Hence the solvers protocol.
Introducing Solvers Protocol with an infrastructure layer
Solvers protocol aggregates requests from all intent protocols and gives it to the solvers, solvers can run the aggregator themselves, it is customizable whitelisting as to what all protocols they want to listen to.
Once they get their orders streamed to their service, they can now focus on solving for the order and check if its profitable to take the orders or provide more profitable routes.
Solvers are given an advanced infra layer which they can access staking solver tokens. Or they can attach their own infra providers. All of them are managed by the solvers protocol, and gives them an head start.
Once solvers have the solution, solution will go through the solver settlement layer which sends their solution to relevant protocols. They will be rewarded by the protocols + the winning solver will get rewarded with solver token as well. In future the reward can be extended with an NFT too which they can trade.
Solvers will be needed to do KYC or stake a relevant amount specified by the protocol to be a solver, in future solvers protocol aims to partner up with the protocols themselves and have the reputation layer.
tldr;
The protocol still in its early designs and will go through multiple pivots based on new information and challenges.
More updates coming soon!