Architecture
Clip Finance's decentralized node network comprises numerous independent nodes operated by community members. This distributed architecture enhances the system's resilience, ensuring no single point of failure can compromise the network's integrity or performance.
Validation Layer: Before any intent-triggered action is executed on the blockchain, it undergoes validation by the decentralized validation nodes. This process involves verifying and ensuring that only legitimate actions are taken on the chain.
Execution Layer: Nodes oversee the execution of validated intents, monitoring the blockchain for successful completion and correct implementation of the intended strategies. This oversight function serves as a safeguard against execution errors or discrepancies.
Incentivization: Node operators are incentivized through a reward mechanism that distributes tokens for their participation in validation and oversight activities. This incentivization ensures active and continuous engagement from the community, maintaining the network's operational integrity and responsiveness.
Adaptability: The infrastructure is designed for adaptability, allowing for the integration of new nodes, the updating of strategies, and the evolution of consensus mechanisms in response to changing market conditions and technological advancements.
Scalability: With scalability in mind, the node network can expand to accommodate increased transaction volumes and more complex strategies, ensuring that Clip Finance can grow alongside the DeFi ecosystem without compromising on performance or security.
Approach
Clip Finance's approach to intents deviates from the proposed standard EIP-7521 by focusing specifically on liquidity management and strategy execution within the DeFi space. Unlike the broad application of intents for various user operations as outlined in the standard, Clip Finance specializes in automating and optimizing DeFi strategies through a proprietary standard. This involves using blockchain primarily as a settlement layer, where the execution logic is not fully embedded in smart contracts but rather a community operated node layer, offering flexibility and efficiency. Instead of relying on a general MEV network, Clip Finance operates its own network of nodes running predefined algorithms, ensuring strategy adjustments and executions are aligned with its objectives and secure for its users. Signed intent-to-earn messages to Clip Finance decentralized node service. Transactions are collected to be settled in batches. For each transaction, a set nodes to find the best execution by finding the best path receiving “solver reward”.
In this scenario with USDT-USDC:
Staker 1 initiates a deposit of $10,000 USDT into Clip Finance.
Staker 2 requests a withdrawal of 4,980 shares, equivalent to $5,000 USDT.
The process unfolds as follows:
4,980 shares are transferred from Staker 2 to Staker 1 for $5,000 USDT
The $5,000 USDT is then partially exchanged for USDC, ensuring the best possible exchange route based on liquidity pool ratios.
The exchanged USDC, along with the remaining USDT, is allocated into the strategy, yielding new shares and compounding earnings for existing depositors.
This streamlined interaction encapsulates multiple operations such as finding paths, token prices, and calculations, significantly optimizing transaction costs. Clip Finance system blends the advantages of both permissionless and permissioned networks, focusing on liquidity management and strategy execution rather than open transaction orders. This hybrid approach allows for efficient intent sharing and execution within a secure environment, relying on Clip Finance's proprietary node network. This network ensures high-quality execution by leveraging off-chain computations for strategy adjustments, with the blockchain serving primarily as a settlement layer. This method not only streamlines transactions but also safeguards against the vulnerabilities associated with open mempools, like DDOS attacks, and price manipulation, without heavily relying on trust-based intermediaries. Clip Finance's model maintains the decentralization ethos by minimizing reliance on a central authority, aiming to offer a balanced solution that promotes efficient, secure, and trustless execution of liquidity management strategies.
Coming soon - Instructions to acquire a node operation right & installation guide to operate a node a validator and executor node
Last updated
