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This series is based on questions submitted by the Bancor community and answered by Project Lead, Dr. Mark Richardson, in a recent Q&A session.
Part 1 focuses on execution architecture, intent-based systems, protocol upgrades, and how Carbon DeFi fits into an evolving wallet and AI-driven landscape.
Q: As wallets move toward offering both crypto assets and tokenized real world assets in a single interface, users increasingly interact with outcomes rather than individual protocols.
Given Carbon’s intent-based design, do you view this trend as reinforcing the original thesis behind Carbon, or as an opportunity for intent-based systems to support a wider set of execution patterns over time?
https://medium.com/media/4728cfd8fec318c0345e414cb3372a00/href
Mark:
I think it does reinforce the thesis, the motivation behind Carbon’s design. And it is an astute observation that whoever posed this question is making. I agree.
Users don’t really care about specific protocols they interact with, only the objective that they have and the thing they want to achieve.
I think what’s changing very rapidly is the interfaces that users are interacting with to achieve the majority of onchain transactions representing users specific ambitions, is largely going to be governed by the emerging AI paradigm. I have this hunch that by this time next year a huge amount of activity onchain, maybe all of it, or close to all of it, will be performed by AI agents acting on a user’s behalf according to the instructions the user provided it.
We’re already seeing things like Open Claude where this repository of skills that you can impart to AI agents is really taking off.
I heard just today that the number of commits to that repo is higher in volume than Linux commits, which is amazing for an open source project.
I think that kind of agent based interaction, where we’re not even assuming anymore that users are navigating to a front end and inspecting a protocol before using it, but rather they have communicated to an agent that represents them what it is that they want to achieve, and then the agent has to try and figure out which protocols it’s going to interact with to best accomplish a certain goal,
I think Carbon is going to fit really, really well into that specific paradigm.
Not only is it reinforcing the original thesis behind Carbon but I am taking a very broad, very stern position that this is something we actually need to lean into.
Not just Bancor specifically, but as an industry. This idea that agents will be the predominant users of blockchains in the very near future.
Specifically for the reason that this user has written into their question.
I don’t think DeFi protocols, their branding or community, are as important as the thing that it allows a person to do.
In that vein, I’d say Carbon is already very well positioned to make use of that kind of pragmatism.
We will go to significant effort to make sure that we lean as hard into that emerging paradigm as we can.
Q: How does Carbon fit into a future where wallets and brokers default to protected or intent-based execution rather than public mempool execution?
https://medium.com/media/10f5649fa3715fc3ab1bd4d9623b2ef8/href
Mark:
Protected execution and intent-based execution, both kind of rely on public mempools. As long as you’re interacting with a blockchain, the transaction has to go through the mempool eventually. Let’s not make the mistake of separating these two things too quickly, but I understand what the person who asked this question means.
And intent based execution is always something I’ve taken issue with because I consider all protocols to be intent based. But I think in the modern context, what it really means is someone says, I want to achieve this, and whoever can get me that result, I will pay them this amount or something like that.
I do consider Carbon to be a really intent aligned protocol. You don’t actually need to interact with a secondary, abstract, or third party intents based solution because you get it out of the box while interacting with Carbon in the first place.
Where wallets and brokers default to these things, the difference between those kinds of paradigms and the paradigm represented by Carbon is at the very least a bit blurry. Meaning that if these groups are specifically interested in those kinds of protections, then I would consider Carbon to be one of the intent based executions they would be attracted to. I don’t see that it’s competitive. I think Carbon specifically aligns itself with exactly that kind of mentality.
Q: What prevents Carbon style execution logic from being commoditized by wallets, chains, or other protocols implementing similar curve based or intent based systems internally?
https://medium.com/media/9a43c8ced7f4148b62d9654649ffd877/href
Mark:
Yeah, it’s a good question. In general, there’s nothing stopping anything. It’s going to come down to first, whether they even understand how our implementation of Carbon works and secondly, whether or not they’ve got the infrastructure to actually make it operate.
It’s always a risk in this space that you have a good idea, you show people how to implement it, and they become inspired by your example and then decide to compete with you by releasing an identical product. That’s just the unfortunate reality of the space that we live in.
But what I will say is that Bancor continues to have a strong intellectual property policy, such that if there are players that deliberately and knowingly plagiarize our protocols, we can then take legal action against them. If it’s an anonymous group, if they’re relatively small, unfortunately there’s just not much we can do to prevent it.
Copyright and plagiarism and patent infringement. All of these things fall under a certain umbrella. It really just comes down to whether or not you think people are going to be so disrespectful that they feel they can do that to you. Or whether or not they’re going to be compelled to come up with their own ideas.
Q. Do you have any updates on the protocol upgrade you mentioned earlier, and when the community might expect to learn more?
https://medium.com/media/15ea0612729accc54dbb023f198f1dbe/href
Mark:
For those who are unaware, I’ve been working on the next feature set for Carbon, if we can call it that.
It’s been a long time in the works, and it really represents a pretty significant generalization of the protocol I think is immensely powerful. There is a process whereby we file a provisional patent application to protect our intellectual property on these kinds of things.
That process has been a little bit more protracted than I expected simply because of the scale and scope of what it is I’ve done this last year.
It’s a significantly more complicated invention and so it’s taking a little bit longer than I had expected.
However, we are now basically right at the end of that process. I had to educate the contributors. I had to educate our attorneys.
And that’s required a lot of attention and care. But happy to report that it’s now right at the end of that process.
I have a very thorough document written up that details exactly what these features will be and how they operate, including the full mathematical elaboration of the theory that underpins it.
And I would expect that it’s probably only a few weeks away now. But rest assured that with respect to its development that actually began a long time ago.
It’s not like this is step one and we need to wait to publish.
I need to do a huge amount of implementation and feasibility studies and fixed point arithmetic precision and accuracy tests and potential gas considerations, contract size and all that kind of stuff.
So that development process has already began and is getting quite mature now. So the period of time between actually publishing this thing and getting a chance to speak about it with community members, and those features actually being available to use, is going to be much shorter I think, than anyone realizes.
Q: Could you explain the time in the price decay of the new Vortex?
https://medium.com/media/2af448838e83d6d7507e63a34ff37737/href
Mark:
The shortest answer I can give is that essentially the vortex accumulates a whole bunch of tokens because the protocols will trade with whatever makers ask to be traded with. This includes both the quote and base assets of each strategy on all different chains.
So the way the Vortex 2.0 works is there’s a vault that accumulates all of those tokens.
Because the smart contracts don’t know what these tokens are, and because we don’t rely on oracle feeds, which introduce a very specific exploit vector that we were determined to avoid, what it does is it sets all of the tokens it accumulates to the highest possible price the smart contract can store.
So whatever token it’s got, let’s just call it meme token A, and it’s got meme token B, meme token C through Z, because it doesn’t know what they’re worth it says, okay, I’m going to value these tokens at 34 times 10 to the 37.
So that’s a 34 with 37 zeros after it, usually denominating this in ETH. It will also sometimes do it in whatever the native gas token is of the chain that it’s on.
So we’ll say, okay, if you want this one meme token from me, it’s going to cost you 34 with 37 zeros following it, which is a prohibitively high price.
Then it slowly reduces that asking price as a function of time. We use what’s called exponential decay. Exactly the same as the radioactivity half-life of radioactive elements.
So it starts at 34 times 10 to the 37, and it decreases smoothly such that every six hours the asking price will have halved.
So I want to make this clear. It is a smooth decay, so it’s not like it’s a certain number and then six hours later it suddenly drops to half that number.
Rather, it very slowly over that six hour period will approach 50% of the original value. And it does that with every block.
It uses the timestamp of the block that’s being mined to measure that decay. The design principle here is that eventually the asking price will be basically on par with whatever the liquidity for that token exists on the chain where that auction is occurring.
And at that point someone who either wants to buy those tokens because it’s a good price will trade with it, or an arbitrageur will take notice and then trade those tokens and perform an arbitrage transaction with them, which is totally fine. And I should point out that Bancor’s Arb Fast Lane can also take the responsibility for completing that transaction at the same time.
So that’s basically it. We start at the highest possible value for all tokens in the contract, and we smoothly let the price drop from that maximum value such that the asking price is halved every six hours.
Continue the Series
This conversation continues in Part 2, where Dr. Richardson addresses regulatory developments, tokenized real world assets, and how Carbon DeFi fits into evolving market structure.
Part 3 explores governance, privacy design, institutional alignment, and what long-term success actually means for Bancor.
Bancor
Bancor is a pioneer in decentralized finance (DeFi), established in 2016. It invented the core technologies underpinning the majority of today’s automated market makers (AMMs) and continues to develop the foundational infrastructure critical to DeFi’s success — focusing on enhanced liquidity mechanics and robust onchain market operation. All products of Bancor are governed by the Bancor DAO.
Website | Blog | X/Twitter | Analytics | YouTube | Governance
Carbon DeFi
Carbon DeFi, Bancor’s flagship DEX, enables users to do everything possible on a traditional AMM — and more. This includes custom onchain limit and range orders, with the ability to combine orders into automated buy low, sell high strategies. It is powered by Bancor’s latest patented technologies: Asymmetric Liquidity and Adjustable Bonding Curves.
Website | X/Twitter | Analytics | Telegram
The Arb Fast Lane
DeFi’s most advanced arbitrage infrastructure powered by Marginal Price Optimization, a new method of optimal routing with unmatched computational efficiency.
Website | Research | Analytics
Carbon DeFi’s Execution Architecture and What Comes Next was originally published in Bancor on Medium, where people are continuing the conversation by highlighting and responding to this story.
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