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George Hristov

[MEV bots](https://www.blocknative.com/blog/mev-and-creating-a-basic-arbitrage-bot-on-ethereum-mainnet)  monitor pending transactions in the mempool and place their transaction ahead of others, capitalizing on the order of transactions within a block. This approach allows them to gain a significant edge, profiting from traders placing transactions. Frontrunning occurs when an MEV bot monitors the mempool for a trader’s pending transaction. Spotting a potential trade, the bot quickly duplicates the users transaction so that they can be the one to get the tokens or the opportunity that the user detected.

This issue permeates various blockchain ecosystems — from decentralized exchanges to non-fungible token (NFT) marketplaces.

According to recent  [data](https://dune.com/jhackworth/mevmevmev), over 2.7 million MEV transactions have been processed on Uniswap alone. This alarming statistic underscores the widespread and high-stakes nature of MEV exploitation.

## How frontrunning works

Frontrunning takes advantage of the open nature of the blockchain mempool, as anyone can view transactions. MEV Bots exploit this transparency to hijack trades. Here’s a basic rundown of the process:

1.  **Monitoring Pending Transactions:**  The first step involves monitoring the blockchain network’s mempool, a holding area for pending transactions. Here, frontrunners, who are often sophisticated bots, scan the mempool to identify transactions that can carry significant value that they want to snatch away or that could influence the price of a particular asset
2.  **Selecting Profitable Transactions:**  The frontrunner will analyze the potential market impact once such a transaction is identified. For instance, if a large buy order for a specific token is detected, the frontrunner knows that this transaction could increase the asset’s price once processed
3.  **Placing a New Transaction:** The frontrunner will initiate their buy order for the same asset, intending to get their transaction processed before the initially detected transaction. They typically give the validators a higher “tip” to execute their transaction first in the block in comparison to the target transaction

### Frontrunning examples

A notable example of DeFi frontrunning involves the notorious MEV bot named “[jaredfromsubway.eth](https://www.theblock.co/post/230218/jaredfromsubway-mev-bot).” In one case, a user,  [0x3a7822](https://zeromev.org/block?num=17508508), intended to trade 2 ETH for another token, $BOB. This trade was noticed by the bot jaredfromsubway.eth, which continuously monitors the mempool for transactions it could take advantage of.

Once the transaction entered the mempool, Jaredfromsubway.eth quickly executed its own transaction to buy $BOB with ETH, strategically placing it as the first in the block, and knowing that he would get the assets at a discount as the transactions behind will pamp the pricer. MEV allows validators to prioritize transactions that are of the most value to them. Consequently, the bot’s transaction, being the first one in the block, was confirmed ahead of the user’s transaction.

![1-frontrunning.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_frontrunning_6077287d3c.webp)

The frontrunning attack triggered an increase in the price of $BOB tokens due to the additional demand created before the user’s transaction was processed. When the user’s original order of 145M $BOB was executed, it was conducted at this now-inflated price, leading to user 0x3a7822 receiving way fewer $BOB tokens, hence losing out on the value they could have otherwise captured.

Jaredfromsubway.eth completed its MEV attack by  [selling](https://etherscan.io/tx/0xff31ba1a8a61933e0093bc4afba95018929e9e1599fec204a3f503c6b7851cb1)  its $BOB tokens at an increased price, resulting in a profit, a second move that made this MEV attack a  [sandwich attack](/learn/what-is-a-sandwich-attack-and-how-can-you-protect-yourself). In this scenario, the price slippage triggered by the frontrunning bot meant that user 0x3a7822 encountered a worse trade-off, ultimately making a loss while the MEV bot profited — an estimated gain of 0.1 ETH.

Another form of frontrunning would have been for example, if user, 0x3a7822 identified an liquidation opportunity faster than anyone else and sent its transaction to the mempool to get the discounted assets from the liquidation in the first place, then Jaredfromsubway.eth would have seen this and would have replaced the users transactions with the transaction of its own, but with a higher gas fee, and thus more likelyhood to get processed faster, and effectively stealing the opportunity of capturing value away from the user.

### How Harmful is Frontrunning?

While frontrunning may seem harmless or even clever to some, it can adversely affect individual traders and compromise the overall integrity of the Ethereum network. Here’s how:

1.  **Impact on Traders**: Frontrunning disrupts the fair operation of financial markets. By exploiting pending transactions, frontrunners manipulate market conditions to their benefit. This can lead to distorted prices, impacting regular traders who abide by market rules. What’s more, these traders miss out on the value they would have otherwise derived from their trades. But most importantly, frontrunning attacks prevent users from receiving the value of the trading opportunity they identified
2.  **Long-term Market Consequences**: Over time, persistent frontrunning can erode market confidence. As traders realize they are consistently at a disadvantage due to frontrunning, they may lose faith in the integrity of the market and choose to leave. This could result in diminished market participation and liquidity, both of which are critical for overall market health and efficiency
3.  **Network Effects**: Frontrunning can also have wider implications for the underlying network. It can cause network congestion, since unnecessary transactions in a block slow down transaction processing times

CoW Swap takes a firm stance against all forms of Maximal Extractable Value (MEV), including frontrunning, as they are detrimental to traders and the wider Ethereum ecosystem. CoW Swap was built to cultivate a fair and transparent trading environment that best serves the interests of all market participants.

### How to protect against frontrunning?

Mitigating frontrunning and other forms of MEV can pose a challenge, given the transparent and permissionless nature of the Ethereum blockchain. However, CoW Swap gives traders the necessary tools to outsmart the MEV bots:

1.  **Batch Auctions**: Instead of executing orders immediately, CoW Swap orders are gathered and grouped into collections known as “batches.”  [Solvers](https://docs.cow.fi/cow-protocol/tutorials/solvers), or the algorithms that provide an order settlement solution for a batch, compete to deliver optimized solutions. This batch auction method ensures all trades within a batch share the same uniform clearing price, preventing MEV Bots from reordering trades. Through batch auctions, CoW Swap affords traders the opportunity to pool liquidity among their orders, enabling users to trade directly with each other or access specialized markets to complete transactions that would otherwise be impossible to do in a peer-to-peer manner — this is known as  [Coincidence of Wants](/learn/what-are-cows-on-cow-swap)  (CoW)
2.  **MEV Blocker**:  [MEV Blocker](https://mevblocker.io/)  is a straightforward solution to the MEV problem. It is an RPC endpoint that protects all types of transactions from MEV. MEV Blocker organizes an auction among searchers, who are given the chance to backrun your transactions and forward up to 90% of the backrun value to the user. In exchange, they protect you from both frontrunning and sandwich attacks
3.  [**Use CoW Swap**](https://swap.cow.fi/#/swap?utm_source=medium&utm_campaign=frontrunning-article)**:** CoW Swap is a meta DEX aggregator that uses batch auctions and facilitates an efficient trading process, preventing all forms of MEV, including frontrunning

### The CoW approach to frontrunning

CoW Swap distinguishes itself in the trading ecosystem with its innovative and comprehensive approach to combating frontrunning and other MEV tactics, thereby creating a safer trading environment for users. The platform has meticulously crafted multiple layers of protection, each targeting a distinct aspect of the MEV issue.

The initial line of defense is  **Delegated Trade Execution**. In conventional DeFi platforms, every transaction a user initiates is instantaneously visible in the public mempool, providing an opportunity for searchers to exploit it. As opposed to other exchanges, on CoW Swap, users sign an “intent to trade” which protects them from directly interacting with the mempool. CoW Swap directs all intents through a network of decentralized ‘[solvers](https://docs.cow.fi/cow-protocol/tutorials/solvers).’ These solvers are responsible for securing the best execution price for your trades, while also shielding you from direct exposure to the public mempool, effectively making you undetectable to MEV bots. Moreover, CoW Swap harnesses the power of  [‘Coincidence of Wants](/learn/what-are-cows-on-cow-swap)’ (CoW). This allows the platform to match orders off-chain, fostering peer-to-peer trades that not only save on gas and liquidity provider fees but also substantially reduce the risk of MEV attacks by circumventing public liquidity pools. CoWs that don’t rely on on-chain liquidity pools eliminate a key opportunity for MEV exploits.

The platform also introduces a  **Uniform Clearing Price**  for all orders in a batch. In a typical decentralized exchange, simultaneous trades clear at marginally different prices in the same block due to sequential transaction processing. This provides an opening for MEV attacks. CoW Swap counters this by ensuring all orders within the same batch auction are settled at the same clearing price within a block. As a result, the order of transactions within a batch becomes irrelevant, effectively preventing MEV attacks and giving users in the batch a fair price.

CoW Swap’s strategy to tackle frontrunning hinges on eliminating opportunities for searchers to exploit trades. This helps maintain the integrity of user transactions and safeguards user value. By leveraging its unique batching technology, CoW Swap remains resilient against frontrunning and other MEV attacks.

### Trade safe from MEV on CoW Swap

Given the severity and frequency of MEV attacks, protecting your trades from MEV should be a top priority. CoW Swap offers unparalleled protection with its pioneering anti-MEV features, making it an invaluable tool for every trader.

Get started with CoW Swap by  [placing your first trade](https://swap.cow.fi/#/swap?utm_source=medium&utm_campaign=frontrunning-article)  and enjoy the freedom and peace of mind of the best prices and the best MEV protection!

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Frontrunning is a crypto strategy exploiting blockchain’s transparency to extract value from a transaction.


What is Frontrunning

Surplus notifications are now live on CoW Swap! Just navigate to your account page to see the total amount of price surplus CoW Swap has generated across all your trades.

Surplus notifications will also pop up after each trade, showing you how much extra you’ve earned for that trade!

![announcing-cow-swap-surplus-notifications-cover-photo.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/announcing_cow_swap_surplus_notifications_cover_photo_dbb7d409c9.webp)

## What is Surplus?

On CoW Swap, we call any improvement over your quoted price “surplus”.

-   **Positive Slippage**: Sometimes the market moves to your advantage and the asset you’re trading becomes cheaper between the time you’re quoted and the time of execution. On CoW Swap, that price savings is passed on to you
-   **Coincidence of Wants (CoWs)**: If your order is matched peer-to-peer with someone else, you save on gas costs and LP fees. That price surplus is also passed along to you
-   **Any other price improvement**: If the solvers can find a better source of liquidity than they originally quoted, or improve the price in any other way, this price improvement is forwarded to you.

## CoW Swap Passes Along the Most Surplus

CoW Swap is the only exchange that passes along all types of price improvements. Positive slippage, gas savings, and other optimizations usually end up in the protocol treasury for most DEXs and DEX aggregators. At CoW, we put our users first, so you can rest assured that if we find a better price, it’ll be you we tell first.


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Announcing CoW Swap Surplus Notifications

CoW Protocol is proud to announce the launch of CoW Hooks. You can now implement custom-coded DeFi actions that execute directly before and/or after your trades.  **CoW Hooks can be used to chain together complex actions such as trading, bridging, staking, depositing, and much more.**

The best part?  **CoW Hooks execute your entire sequence as a single transaction and, true to the CoW Protocol model, you pay gas fees in your sell token if, and only if, your transaction succeeds.**

> If you are interested in #BUIDLing, reach out, grants are available for great ideas @  [https://grants.cow.fi/](https://grants.cow.fi/)

## Background

In recent months, the crypto industry has been absorbed in discussions on “intent” messages on Ethereum and the new possibilities that this innovation unlocks.

So far, the only production-ready intents system live on Ethereum is CoW Swap. The rest has only been theory and research papers covering the possibilities of intents. What’s more, these papers frame the user transaction as an “intent” but they don’t usually allow for composability. This is why the CoW Swap model asks the user to sign the trade instead of executing it directly on chain… This allows solvers to optimize the order by composing it with other strategies and optimizations. Composability unlocks the real power of intents, as they are meant to abstract the user away from complex interactions.

CoW Swap has been the leader in the intent space for a while and has built one of the most widely-used intent-based models. On CoW Swap, users delegate their trade execution to a network of solvers that complete the transaction on their behalf. This delegated trading model makes way for composability as solvers can batch trades together, find  [Coincidence of Wants](/learn/what-are-cows-on-cow-swap)  (CoW) matches, update the trading path at the moment of execution (rather than the moment of creation) and more.

Today, CoW Swap is proud to announce the launch of an overhauled intents system that allows for composability of a wide range of actions before and after a swap.

It’s called CoW Hooks.

## What are CoW Hooks?
![1-cow-hooks.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_cow_hooks_801e54dabe.webp)

CoW Hooks are arbitrary Ethereum “calls” that attach to an order and execute before and/or after the order. Developers and advanced traders can use code to express an intent that performs some action before a swap (pre-hooks) and after a swap (post-hooks).

**Pre-hooks**  can be used to “set up” conditions for an order. Examples include executing the code necessary for validating an on-chain signature, or setting the required approvals through an EIP-2612 permit.

**Post-hooks**  execute after a swap takes place and the receiver address receives the funds. Post-hooks provide an opportunity to put the funds to use immediately through staking, liquidity providing, bridging tokens to L2s, and much more.

## How do CoW Hooks work?

CoW Hooks let you do anything you can imagine. You can use whatever you can encode on-chain as a pre or post hook. The only requirement is that your action includes a trade on CoW Swap.

With CoW Hooks, users define:

-   A list of pre-hooks intents
-   The swap intent
-   A list of post-hooks intents

The flexibility of creating CoW Hooks opens up a world of possibilities — all you need to do is encode your actions in the right order for your particular use-case.

### Fresh Address Receives tokens: Permit, Swap & Bridge

Let’s say that you receive USDC and you would like to bridge the funds to another chain. You can use CoW Hooks to execute a token approval, swap, and bridge all at once.

-   **Pre-hooks**: Use a pre-hooks action to approve the token for a swap
-   **Swap**: Use CoW Swap to swap your USDC to the token you would like
-   **Post-hooks**: Send your new tokens to the bridge contract as a post-hook

And just like that, you have received, swapped, and bridged your tokens to a different chain all in one set of transactions. As a bonus, all of your gas fees will be charged in your sell token (USDC in this case,) which means that you can move your received funds without first sending ETH to cover gas costs.

If you are interested in learning more about the code behind this example, we’ve created a walkthrough on how to reproduce this exact set of actions in our CoW Hooks  [documentation](https://docs.cow.fi/overview/cow-hooks), as well as on YouTube:

### Flash Loan payback adapter for CDPs via Stop loss orders

You can also use CoW Hooks to repay debt or manage collateral levels. In this case, your hooks actions might look like this:

-   **Pre-hooks**: Approve the tokens you would like to swap
-   **Swap**: Use CoW Swap to swap for the tokens you need to service your debt
-   **Post-hooks**: Repay your debt and close your position, or use your tokens to add collateral so as to not be undercollateralized

We’ve also put together a walkthrough for how to code this set of hooks, you can view it here:

## Use CoW Hooks for everything

The examples illustrated above are just some of the uses of DeFi assets, but the possible use-cases for CoW Hooks are really endless. Here are some more examples:

-   **Repaying a debt & staking**: You could use CoW Hooks to repay a debt, close a position, swap assets for a yield bearing token, and stake your tokens all-in-one. To do this, you would set your pre-hook action to repaying the debt and closing the position, then you would use CoW Swap to swap your assets, and finally use a post-hook to deposit your new assets into a staking vault.
-   **Opening an LP position**: You can also work with only a pre-hook and a swap or only a post-hook and a swap. For example, if you wanted to open an LP position, you could first swap some assets for ETH, and then use a post-hook for the rest. If you wanted to do this via a CDP, you could deposit your ETH as collateral, borrow stablecoins, swap some stables to the other LP token side, and open a liquidity provider position.
-   **JIT (Just-in-time) smart orders**: Say that you want to leverage the benefits of programmable smart contract wallets to deploy a Safe and also trade via the composable CoW framework (ERC-1271). Using CoW Hooks, you can express the entirety of your transaction sequence at no cost. Connect the deployment of the Safe, execute your custom smart contract approval and swap, and even add on another post-swap action all in one. The entire sequence is conditional on every step being able to execute, otherwise none of it goes through.
-   **NFT sniping & selling:** CoW Hooks also come in useful in the NFT world. You can, for example, sell an NFT and encode a CoW Hooks action to immediately swap those funds for a token of your choice. Or, alternatively, you could place a limit order to purchase crypto at a certain price and then buy an NFT directly after.
-   **Bridging to another chain**: If you want to swap some tokens and bridge them to another chain, you could use CoW Hooks. In your flow, you would first swap your tokens and then send them to a bridge contract in order to combine both the approval and the bridging.
-   **Claiming airdrops**: While they’re not as common as they used to be, airdrops are a core part of many Ethereum projects. You can use CoW Hooks to sell your airdrops without spending any ETH on gas. Simply approve the token in your wallet and add a swap transaction to sell it. Your gas fees will be taken in the sell token, so you can enjoy holding on to your precious ETH.
-   **Unstaking and restaking**: If you’re an Ethereum validator and you want to claim your rewards, you’ll first need to unstake your 32 ETH in order to perform any action with them. With CoW Hooks, you can unstake your ETH, approve and swap to a token of your choice, and then re-stake your new assets somewhere else, all in a single set of encoded transactions.
-   **Automatically growing your LP position:** Let’s say that you’re a liquidity provider for a EUR — USDC pool on Gnosis chain that rewards you in GNO tokens. You can use CoW Hooks to automatically convert your GNO to EUR/USDC in a 50/50 split through CoW Swap and then use each of the assets to increase your LP position.

## What are you going to build with this anon?

The best part about CoW Hooks? They’re fully-featured and already live at the protocol level! So, if you are a developer or an advanced technical user, get your wallets ready and step into a new era in DeFi!

To get started, check out our  [documentation](https://docs.cow.fi/overview/cow-hooks). We’re really excited about all the possibilities with CoW Hooks so if you need help implementing them or have an exciting idea, please reach out on  [Twitter](https://twitter.com/CoWSwap)  or by  [joining CoW Protocol Discord](https://discord.com/invite/cowprotocol).

Happy hooking!



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The CoW Protocol intent language just got enhanced through CoW Hooks, making a single intent matching engine into a multi purpose intent execution engine!


CoW Hooks: You are in control!

A cow is a large, domesticated animal that’s been used as livestock for centuries…

But a CoW — now that’s a totally different thing!

The acronym “CoW” stands for “Coincidence of Wants” and it’s the founding mechanism behind the creation of CoW Swap, as well as the inspiration for our cow theme! A Coincidence of Wants is an economic phenomenon where two parties swap assets with one another peer-to-peer. On CoW Swap, a Coincidence of Wants occurs when two (or more) traders swap cryptocurrencies with each other without having to use on-chain liquidity.

To illustrate the concept better, let’s look at an example.

## How to Have a CoW

Let’s say Meredith wants to buy 0.5 ETH in exchange for $1,000 DAI. At the same time, another trader, Eli, wants to swap 0.75 ETh for $1,500 DAI.

On a traditional exchange such as Uniswap, Meredith and Eli would both tap an ETH / DAI liquidity pool in order to make their trades.

![1-how-to-have-a-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_how_to_have_a_cow_40e7bc1ad9.webp)

On CoW Swap, however, there’s another possibility. CoW Swap orders start out as signed “intent to trade” messages that get batched together before getting sent to on-chain liquidity sources like Uniswap. As a result, CoW Swap can match orders peer-to-peer when the opportunity arises.

If you notice, Meredith and Eli each have what the other wants. This means that Meredith can give her ETH to Eli directly, and he can give his DAI to her in return as a peer-to-peer trade that does not need to go through a liquidity pool. In this way, Meredith can have her trade fully filled without having to ever use on-chain liquidity! This saves on liquidity provider fees and gas costs, avoids slippage, and prevents MEV attacks.

![2-how-to-have-a-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_how_to_have_a_cow_80b25b7aea.webp)

So Meredith walks away with $1,000 of Eli’s DAI, and she gives him her 0.5 ETH.

You’ll notice here that Eli is seeking $1,500 DAI — which is $500 more than what Meredith gave him. In this case, assuming there is no one else in Eli’s batch who can do a second CoW trade with him, Eli’s trade will have to be routed to an on-chain liquidity pool through a service like Uniswap or Balancer in order to fill the remainder of his trade.

CoW Swap automatically matches Coincidences of Wants and routes unfilled orders through the most optimal on-chain liquidity. CoWs are possible due to CoW Swap’s delegated trading model that uses  [solvers](https://docs.cow.fi/cow-protocol/tutorials/solvers)  to execute your trades through the most optimal trading path.

## The Benefits of CoWs

CoWs do a lot: they protect you from MEV, and you save on all kinds of fees including liquidity provider fees, gas fees, and slippage …all with no methane released into the atmosphere ;)

### Lower Fees

The main advantage of CoWs is that they bypass liquidity provider fees and save on gas fees, meaning you get a better price for your trades. When you’re swapping an asset directly with another trader, you are not tapping into on-chain liquidity from a protocol like Uniswap, so you do not have to pay their LP fees and your peer-to-peer trade costs less in gas than interacting with smart contracts. Additionally, certain types of CoWs bundle orders together in order to send them to an on-chain liquidity source, meaning that your gas is also cheaper.

On CoW Swap, these savings get passed on to you in the form of lower prices for your trades!

### MEV Protection

MEV, or “maximally extractable value” is a hidden tax on Ethereum trades that can result in failed transactions and unfavorable prices. Any time you submit a transaction to the blockchain, it may get re-ordered and hijacked by opportunistic traders looking to make a buck off your alpha (learn more about how CoW Swap solves MEV  [here](/learn/how-cow-swap-solves-the-mev-problem)).

CoWs protect you from MEV because they are peer-to-peer swaps that don’t rely on on-chain liquidity. This means that there are no opportunities for your trade to get hijacked, since you’re interacting with another trader, rather than going through a liquidity pool. In other words, CoWs make transaction ordering irrelevant when interacting with AMMs as they are simple, peer-to-peer trades among traders themselves.

### Less Price Impact

Price impact is a major concern for large trades or for assets with relatively low liquidity. Whenever a trade impacts a liquidity pool enough to change the prices of the assets in the pool, it causes a “price impact”.

If you attempt to purchase $5,000 worth of BNB tokens, for example, but there isn’t enough liquidity to fill your entire order at a fixed market price, you may experience a price impact that causes you to get $4,950 worth of BNB tokens for the $5,000 that you pay.

CoWs alleviate price impact for large trades. If part of your trade is matched peer-to-peer with another trade, you will need to use less on-chain liquidity, thus reducing the impact that your trade will have on asset prices.

## Types of CoWs

CoWs are possible thanks to CoW Swap’s delegated trading model. On CoW Swap, users sign an “intent to trade” message, rather than submitting a transaction, when initiating a trade. This signed message allows for all sorts of order optimizations including CoWs, price improvements, gas optimizations, and much more that’s not possible when directly submitting transactions.

There are several different types of CoWs, each with varying complexity and levels of price savings.

### Simple CoW

![3-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_benefits_of_cow_150c8f788e.webp)

The example of Meredith and Eli at the beginning of this article is an instance of a simple CoW. In a simple CoW, two traders that each have an asset the other wants come together to execute a peer-to-peer swap.

In contrast, on Uniswap this trade would require using a liquidity pool:

![4-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_benefits_of_cow_281b830815.webp)

### Batching CoW

![5-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/5_benefits_of_cow_68a360bd82.webp)

Another type of CoW is the “batching” CoW trade that occurs whenever two traders are trading the same asset. For example, if two traders are looking to buy ETH in exchange for USDC, CoW Swap batches their trade together and executes a single on-chain transaction from a liquidity pool like Uniswap for the combined amount of ETH for both trades.

This saves on fees since, instead of having to execute the transactions individually and spend gas twice, the protocol batches the trades together into a single transaction, reducing the overall gas cost.

Here is what this trade would look like on a traditional liquidity pool through Uniswap. As you can see, there is a redundancy that’s saved when trading on CoW Swap.

![6-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/6_benefits_of_cow_3391fc0925.webp)

### Intermediate CoW

![7-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/7_benefits_of_cow_79e8dd4812.webp)

CoW Swap’s delegated trading model allows for gas optimizations through “intermediate CoWs.”

An intermediate CoW is similar to a simple CoW, but with the caveat that it is not a perfect A-B and B-A settlement. This type of CoW uses intermediate “hops” that both trades have to do in order to complete.

For example, in order to exchange COW for USDT, your trade might first have to go COW to ETH and then ETH to USDT. If, at the same time, another trader is trading USDT for CRV, they will go through the opposite trading route: USDT to ETH and then ETH to CRV. In both cases, there is an opportunity for a Coincidence of Wants in the intermediate leg (ETH to USDT and USDT to ETH).

Here is what this trade would look like on a traditional liquidity pool through Uniswap.

![8-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/8_benefits_of_cow_2e078ec2ef.webp)

### Multidimensional CoW, AKA a “Ring Trade”

In some batches, there are multiple orders which can all combine together in multiple Coincidences of Wants. In fact, one of the most interesting use cases of CoWs is what’s known as a “ring trade”. Ring trades enable a true barter-economy style of swapping. Traders can swap unrelated assets without relying on external liquidity.

Let’s take a look at an example of a Ring Trade:

![9-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/9_benefits_of_cow_96c53012be.webp)

In the above scenario, we have four parties:

-   Eli
-   Edith
-   Lily
-   Chow

Trading four assets

-   ETH
-   USDT
-   COW
-   DAI

As you can see, each party wants to swap one of their assets for one of the others in the batch. In this case, however, there is no “perfect” Coincidence of Wants — where one party has exactly what the other party needs — instead, we can get everyone what they want by trading around the “ring”.

Eli wants to trade his ETH for DAI. He sends his ETH to Edith, who gives her USDT to Lily who gives her COW to Chow, and finally, Chow gives his DAI to Eli. In this way, Eli’s trade is filled by going through a three-party Coincidence of Wants ring trade. This logic holds for the other three participants as well:

1.  Edith gets her ETH from Eli, even though she has no DAI (the asset he really wants) to give him in return
2.  Lily trades COW for USDT using Chow, Eli, and Edit as proxies
3.  Chow does the same thing for his DAI to COW trade

Ring trades are a powerful use-case of CoWs that can occur whenever a batch of orders gets large enough.

On Uniswap, this trade would be much more complicated (and expensive!)

![10-benefits-of-cow.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/10_benefits_of_cow_924199f399.webp)

## CoWs: Your Ticket to Better Prices

CoW Swap turns economic theory into reality by utilizing CoWs (Coincidences of Wants) to optimize prices and enable safer trades.

The protocol relies on Order Flow Auctions which allow users to sign composable intents to trade rather than committing to a specific transaction. Through intents,  [solvers](https://docs.cow.fi/cow-protocol/tutorials/solvers)  can use multiple sources of liquidity, compose trades together, and perform all sorts of optimizations. This is what makes CoWs possible!

Give CoWs a shot by  [using CoW Swap for your next trade](https://swap.cow.fi/#/swap?utm_source=medium&utm_campaign=cow-article). Happy trading!

large_what-are-cows-on-cow-swap-cover-photo.webp

medium_what-are-cows-on-cow-swap-cover-photo.webp

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thumbnail_what-are-cows-on-cow-swap-cover-photo.webp

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An overview of Coincidences of Wants (CoWs) & the benefits they bring to CoW Swap traders — it’s not just a meme!


What are CoWs on CoW Swap?

![1-tally-gif.gif](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_tally_gif_0192363076.gif)

DAO trading presents a unique set of challenges when compared to retail trading. While small trades can easily access the liquidity necessary to execute quickly and efficiently, DAOs have to go through a complex proposal and voting process to simply initiate a trade. When actually placing the trade, DAOs also have to worry about optimizing liquidity sources, reducing price impact, avoiding MEV, fine-tuning slippage, and much more.

The DAO governance process ensures that all stakeholders get a say, but when it comes to executing trades, it forces DAOs into a difficult choice:

1.  **Announce and commit to the trade in advance to collect votes**: This exposes the trade to significant MEV risk since the DAO makes the exact trade details known in advance… or,
2.  **Elect a treasury management team to execute the trade**: This keeps trade details private, but bypasses the regular governance process and requires trusted third parties

This choice between losing money to MEV or having to delegate treasury decisions leads many DAOs to avoid making trades unless absolutely necessary. This causes more problems since regular trades are necessary for effective treasury diversification.

Today, [CoW Swap](https://cow.fi/)  and [Tally](https://www.tally.xyz/), two of the most trusted names in the DAO space, are putting an end to this tradeoff once and for all.

We’re excited to announce the launch of the Tally Recipe for CoW Swaps: a combined governance & swap mechanism that eliminates the need for precise trade timing and gives DAOs the best of both worlds.

## CoW Swap & Tally Present: The Tally Recipe for CoW Swaps
![2-cow-swap-and-tally-present.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_cow_swap_and_tally_present_a1c0a92d1d.webp)

**The Tally Recipe for CoW Swaps relies on** [**Milkman**](https://github.com/charlesndalton/milkman)**, a CoW Grants-funded project developed by contributors from** [**Yearn.fi**](https://yearn.fi/)**, to enable easier DAO trading.**

Milkman is a trading mechanism that uses a real-time price checker instead of a fixed slippage tolerance for executing trades. It has quickly become a critical tool for DAOs, as it encodes a guaranteed price on-chain at the time of the trade execution, rather than during the proposal process. The Milkman smart contract uses a bot that places trades on behalf of the DAO based on the parameters encoded in the DAO’s signed message.

Rather than including a fixed price and slippage tolerance in the governance proposal for an upcoming trade, DAOs can instead use a price checker (such as a Uniswap v3 price oracle) to complete the trade based on whatever the price is at the time of execution (within some slippage deviation).

Previously, DAOs had to run Milkman via scripts and code, but  [CoW Swap](https://cow.fi/)  and [Tally](https://www.tally.xyz/)  have created an easy-to-use operational UI interface for Milkman through the Tally Recipe for CoW Swaps.

## How the Tally Recipe for CoW Swaps Works

The Tally Recipe for CoW Swaps makes DAO trading super simple.

![3-how-the-tally-recipe-works.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_how_the_tally_recipe_works_335fcb4e85.webp)

When creating a governance proposal through Tally, DAO managers can add a “swap” action, in which they can specify:

-   The assets that the proposal will trade
-   The price checker that will be used to guarantee that the price at the moment of execution won’t deviate from the market price by more than the specified slippage tolerance
-   The slippage amount that the DAO is willing to accept

Once the governance proposal for the DAO trade passes, the Milkman bot automatically picks up the transaction, checks the signature, and forwards the order to CoW Swap. Thanks to an  [EIP-1271](/learn/tutorial-creating-smart-orders-with-cow-protocol)  integration, CoW Swap can verify that the attached signature is valid and contains all the necessary trade parameters, even if it comes from a smart contract. The transaction then moves to the CoW orderbook and the solvers compete to find the best price and execution path for the order.

## Tally & CoW Swap for Your DAO

DAOs have lots of options when it comes to governance and treasury management. Tally and CoW Swap are both committed to creating tools for enhancing the DAO trading experience.

### Tally makes DAO governance management a breeze. DAOs can use Tally to:

-   Create a home page for existing members and new visitors
-   Create and manage DAO proposals
-   Allow participants to vote on DAO proposals or delegate their voting power through a personal profile
-   Allow delegates to advocate for receiving more votes by making a profile and showcasing their past voting activity

### CoW Swap offers DAOs:

-   The best prices from all available on-chain liquidity and through peer-to-peer swaps
-   MEV protection through a network of solvers
-   Forwarding of positive price surplus (your quoted price is the worst price you’ll pay)
-   EIP-1271 smart orders that find the best price at the time of execution
-   And  [much more](/learn/cow-swap-for-daos)

For DAOs large and small, the Tally Recipe for CoW Swaps takes treasury swaps to a whole new level. Enjoy trading with the peace of mind of a retail trader — regardless of how big your trade is.

To use the Tally Recipe for CoW Swaps for your DAO, sign up with Tally through [their website](https://www.tally.xyz/).

Happy trading!


large_Tally-recipe-for-cow-swaps-cover-photo.gif

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Bring your DAO trades to the next level with governance-initiated swaps

Tally Recipe for CoW Swaps

Maximal Extractable Value (MEV) is a serious problem in the Ethereum ecosystem that accounts for more than $1.3 billion in lost value for traders just over the last few years. While there are different types of MEV, most extracted value comes from the dreaded sandwich attack.

![1-mev-cumulative.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_mev_cumulative_5be731696a.webp)

[_MEV Cumulative Gross Profit_](https://dune.com/queries/2259793/3703605)

Sandwich attacks occur when a user’s transaction gets trapped, or “sandwiched,” between two hostile transactions — one before and one after. As a result, the original transaction executes at a much higher price than necessary, leading to an inflated price for the original trader and a profit for the malicious trader placing the two extra trades (known as a “searcher”).

## How a sandwich attack works

When a searcher spots an opportunity to sandwich a transaction, they place a trade before (known as “frontrunning”) and a trade after (known as “backrunning”) the transaction in order to manipulate the price of the trade.

Due to the design of Automated Market Makers (AMM) such as Uniswap, these trades strategically manipulate the price of the assets, leaving room for profit. To really understand how sandwich attacks work, though, we first need to understand some core concepts.

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">If you don&#39;t know what <a href="https://twitter.com/hashtag/MEV?src=hash&amp;ref_src=twsrc%5Etfw">#MEV</a> (Miner/Maximal Extractable Value) is and how it can hurt your swaps, make sure to watch this video! 🐮<a href="https://twitter.com/hashtag/CoWGMI?src=hash&amp;ref_src=twsrc%5Etfw">#CoWGMI</a> 🐄 <a href="https://t.co/2g1cFLYvAL">https://t.co/2g1cFLYvAL</a></p>&mdash; CoW DAO | CoW Swap &amp; MEV Blocker (@CoWSwap) <a href="https://twitter.com/CoWSwap/status/1498678005777973249?ref_src=twsrc%5Etfw">March 1, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

### Core concepts at play

**Automated Market Makers (AMM)**: Automated Market Makers are trading mechanisms that allow traders to buy and sell assets in real time. Unlike traditional “orderbook” trading, which relies on counterparties for every transaction (you need a seller in order to buy and a buyer in order to sell), AMMs work by maintaining a constant ratio between the prices of two assets. For example, ETH and COW. AMMs use the formula “x*y = k” to determine a fair price based on the ratio between two assets (x and y) in the liquidity pool.

Any time a trade alters this ratio by depleting the supply of one asset and increasing the other, the prices of the assets adjust in order to preserve the established ratio. For instance, if a trader buys COW and sells ETH, the COW price rises, and the ETH price falls. The opposite happens when traders sell COW and buy ETH.

**Slippage Tolerance**: When placing a trade, traders set a “slippage tolerance” for their transactions, which represents the maximum price difference they’re willing to accept for their trade. For example, if ETH is trading at $2,000 and you place an order to buy ETH with a 5% slippage tolerance, you’re willing to buy ETH at up to $2,100. If ETH goes above $2,100, however, your trade will fail, as it’s outside your slippage tolerance.

Some slippage tolerance is always necessary because the prices of crypto assets are constantly fluctuating, so by the time your trade executes, the price may have moved. Setting your slippage tolerance too high, however, leaves room for searchers to sandwich your trades.

**Price Impact**: Crypto markets, like all markets, are based on supply and demand. AMMs maintain “liquidity pools” of assets that they use to fill trades. Each trade drains some amount of this liquidity, moving the price of the asset. This price movement is known as “price impact.”

The larger the trade, the bigger the price impact. A trade of $100 ETH will not move the price of ETH very noticeably, since it makes up a tiny fraction of the available liquidity. A trade of $1,000,000 ETH however, will noticeably move the price of ETH.

**Transaction Reordering:** Blockchain transactions do not always enter the block in the order that they were submitted. Searchers can “bribe” the validators responsible for creating the block to get them to arrange transactions in a specific sequence. This transaction reordering is what makes all of MEV, including sandwich attacks, possible.

## The sandwich attack: Step by step

Let’s examine a sandwich attack through a step-by-step example. In this example, we’re trading ETH and COW.

![2-the-sandwich-attack-step-by-step.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_the_sandwich_attack_step_by_step_3a443571e9.webp)

**Step 1**: Bessie wants to buy COW using her ETH. She goes to a decentralized exchange (DEX) like Uniswap, and places an order for 4,000 COW. This should cost her around 1 ETH, but due to significant market volatility, Bessie decides to set a 10% slippage tolerance. This means she’s willing to pay up to 1.1 ETH for 4,000 COW.

**Step 2**: Bessie’s trade enters the Ethereum mempool (the pending order queue), and a lurking searcher spots an opportunity. Springing into action, the searcher places a trade just before Bessie’s large enough to push the COW price up to her slippage tolerance. In this case, the searcher buys 4,000 COW for exactly 1 ETH. As a result of this first trade’s price impact, Bessie’s 4,000 COW purchase now costs 1.1 ETH — the maximum she’s willing to pay.

**Step 3**: Once the searcher’s transaction clears, Bessie’s transaction also goes through and she receives her 4,000 COW in exchange for 1.1 ETH. The searcher takes advantage of this price impact and sells his original COW at this new rate — 4,000 COW for 1.1 ETH.

In the end, the searcher buys 4,000 COW for 1 ETH and sells it for 1.1 ETH, earning a profit of 0.1 ETH (before gas and fees) for not much effort.

It’s easy to see how lucrative sandwich attacks are!

Bessie, on the other hand, ends up with a bad deal. She could have purchased 4,000 COW for just 1 ETH, but her slippage tolerance left room for a sandwich attack that forced her to pay an extra 10% for her trade.

## The consequences of sandwich attacks

Sandwich attacks siphon millions of dollars from everyday Ethereum traders. Every dollar captured by searchers is a dollar stolen from the pockets of traders.

![3-consequences-of-sandwich.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_consequences_of_sandwich_bda8ad0cdd.webp)

[_EigenPhi_](https://eigenphi.io/)_, a website tracking on-chain data, offers a dashboard displaying the latest sandwich attacks._

At the time of writing, sandwich attacks on AMMs and aggregators alike generate over $1 million in profit for searchers  **each week**.

## How can you protect against sandwich attacks?

There are several steps traders can take to protect themselves from sandwich attacks.

### Reduce Slippage

A simple way to reduce your exposure to sandwich attacks is to decrease your slippage tolerance. Sandwich attacks rely on a high slippage tolerance that leaves arbitrage for searchers to exploit.

Lowering your slippage tolerance decreases the chance of falling victim to a sandwich attack, but, on the other hand, it means there’s a greater chance that your transaction will fail. Failed transactions can be frustrating and costly, since you still have to pay a gas fee even for failed transactions.

It can be difficult to know exactly what slippage to use. This is why using a trading mechanism solution that optimizes slippage tolerance on your behalf and doesn’t make you pay for failed transactions, such as CoW Protocol, can be useful.

### Use a DEX Aggregator

Decentralized exchange aggregators scan multiple on-chain liquidity sources to offer you better prices for your trades. Spreading out a single trade across multiple liquidity pools means a reduced price impact, and thus less room for searchers to profit.

In addition, DEX aggregators often provide an “auto-slippage” option to algorithmically determine the appropriate slippage for your trade, reducing the chances of sandwich attacks.

### Use a Custom RPC Endpoint

For advanced MEV protection, consider using a custom RPC (remote procedure call) endpoint for your wallet.

RPC endpoints act as intermediaries between your wallet and on-chain transactions. Most RPC endpoints (such as the default ones on your wallet) simply do the technical work of routing your trades to the chain. Others, however, will also provide protection from MEV.

A notable RPC endpoint that provides MEV protection is  [MEV Blocker](https://mevblocker.io/). When using RPC’s like this, users are protected from MEV for a wide range of transactions including DeFi trading, NFT minting, liquidity providing, and more.

Changing your wallet’s RPC endpoint in order to take advantage of these benefits is relatively straightforward. For Metamask users, instructions can be found  [here](https://support.metamask.io/hc/en-us/articles/360043227612-How-to-add-a-custom-network-RPC).

### Use CoW Swap

For the most comprehensive MEV protection, it’s a good idea to use dApps that are specifically optimized to protect you from MEV.

CoW Swap is a meta-DEX Aggregator that combines all of the benefits of price-optimized trading with the safety features of an MEV-resistant protocol. Cow Swap matches your order against the best prices for on-chain liquidity, and protects your trades from MEV.

For a comprehensive dive into how CoW Swap protects traders from MEV, check out “[_How CoW Swap solves the MEV problem_](/learn/how-cow-swap-solves-the-mev-problem).”

## CoW Swap’s approach to sandwich attacks

Trading on CoW Swap is similar to using a platform like 1inch or Uniswap. You simply navigate to the swap interface, select the tokens you want to trade, specify your trade amount, and click “Swap.”

![4-cow-swap-approach-to-sandwich-attacks.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_cow_swap_approach_to_sandwich_attacks_701174b9d6.webp)

Behind the scenes, however, CoW Swap is quite different.

First, your order submission is no order at all, it’s actually a signed “intent to trade” message. This message gets sent to a network of “solvers” who find the best route for your trade, optimizing price and slippage tolerance in the process.

This delegated trading model means that your transaction is protected from MEV. If there is a sandwich attack that takes place, it will be the solvers getting sandwiched, not you. And the CoW Swap solver are some of the toughest bulls in the pasture, so they’re not easy to sandwich!

But there’s more: CoW Swap also utilizes Uniform Clearing Prices (UCP) to protect you from MEV.

CoW Swap groups orders into batches and executes them all at the same clearing price per asset. This approach makes transaction reordering ineffective as an MEV strategy since all orders in a CoW Swap batch trade for the same price.

## Don’t end up lunch meat

Sandwich attacks pose a constant threat to Ethereum AMM (DEX) users who may fall victim to searchers looking to make a quick buck. Trades with high slippage tolerances are most susceptible to sandwich attacks and other types of MEV. The bigger the trade, and the bigger the slippage tolerance, the higher the chance that you’ll end up as lunch meat.

Thankfully, innovations such as DEX aggregators and custom RPC endpoints have made it much easier to protect yourself from all types of MEV.

For the most comprehensive MEV protection, however, whales, DAOs, and traders of all sizes turn to CoW Swap. Built from the ground up with MEV protection in mind, CoW Swap puts users first and protects every transaction from searchers… And  [we’ve got the data to back it up](https://drive.google.com/file/d/1zNGPeYx9sDVBiuSjCyYtkCjPt3VLZ6Vb/view?usp=sharing).

So try  [CoW Swap](https://swap.cow.fi/#/swap)  for yourself and leave MEV in the past.


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Sandwich attacks make up the majority of harmful MEV extraction


What is a sandwich attack and how can you protect yourself?

## TL;DR

-   For the month of  **May**, CoW Protocol handled a volume of $770M, generating a total surplus of $**5M**
-   In exciting news, CoW Protocol launched dump.services and Safe bundling of transactions, improved the metamask approval process, and more
-   WE ARE HIRING! Find our latest job openings for engineering and businesss here:  [https://cow.fi/jobs](https://cow.fi/jobs)

## Protocol Stats

This month, CoW Protocol settled a total of $770M.

![1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_protocol_stats_94885cd3ee.webp)

This month, the top 3 batches worth highlighting are the following:

-   Batch with the highest % of CoW trades ([Transaction details](https://explorer.cow.fi/tx/0x695b908715e6e11c30478bb3853a2ffbc29ecec4513ecfea78619c5f4079bf49?tab=graph)): The total batch volume was $104K, and it was created by two traders who were perfectly CoWed for  **94**% of their volume. One trader was buying $**53K** of **USDC**, while the other trader was selling $**48K** of  **USDC**.

![1-1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_protocol_stats_d49f5ce6b7.webp)

-   Batch with the highest volume ([Transaction details](https://explorer.cow.fi/tx/0xcb0c9611522985fc293f7223fc3eafc43868fc69aca931e46d0b710b5dcca82b?tab=graph)**)**: The total batch volume was $**7.6M** and it was created by a single trader who was swapping $**7.5M** of **USDT**  for $**7.6M** of **USDC**.

![1-2-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_protocol_stats_4df89e1dff.webp)

-   Batch with the highest amount of surplus (Transaction details**)**: The total batch volume was $**1.4M** and it was created by a single trader who was swapping  **ETH**  for  **USDT**. This trader generated the most surplus volume in a trade for the month of  **May**, by getting $**28.5K USDT** extra (**2**% surplus).

![1-3-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_protocol_stats_4d2f0931df.webp)

During the month of  **May**, the top 10 traders traded a total of $128M.

![1-4-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_protocol_stats_c2f2104fe7.webp)

In the table below you can see the number of trades that CoW Swap traders executed, as well as their total volume. Our most active trader made a whopping 235 trades with CoW Protocol in  **May** (PS: The top trader is not counted since it’s the CoW Swap ETH Flow Contract).

![1-5-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_protocol_stats_d318ecaf07.webp)

## Solvers

In  **May**, we had one external team add a new solver to our production environment. This solver is named Propeller Heads and the CoW Protocol team is looking forward to seeing how it performs in the competition.

![2-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_solvers_a7642b2d51.webp)

You can find all of the solver statistics in the following table. Looking at this table, we can see that on average, for the month of  **May,**  solvers generated a total of $**5M** in surplus, which is money in the pockets of traders. The highest generated surplus by a single solver was $**1.2M**.

## Governance

It was a quiet month in terms of governance! The CoW was just chilling.

### Executed Proposals

No proposals were executed this month.

### Draft Proposals

There were  **2**  new proposals asking for feedback before moving into the next phase, a final CIP, in their current form.

-   [CIP-25: Operational CoW DAO Safe](https://forum.cow.fi/t/cip-25-operational-cow-dao-safe/1708)
-   [CIP-26: Solver bond funds switch](https://forum.cow.fi/t/cip-26-solver-bond-funds-switch/1709)

### Technical Discussions

As an “agora” for technical topics on batch auctions or CoW Protocol related topics, the forum surfaced some very interesting posts.

1.  [Towards a stronger price estimation competition](https://forum.cow.fi/t/towards-a-stronger-price-estimation-competition/1699)

Make sure to read them and leave comments — your feedback is highly appreciated and will help move forward these important topics. If you are interested in submitting a proposal to the CoW DAO, make sure to use the following  [template](https://forum.cow.fi/t/cip-0-template/28).

## CoWmunity News

-   Integrated  [Keystone wallet](https://twitter.com/CoWSwap/status/1653399147997962241?s=20)  in our wallet modal
-   CoW Grants Program funded the creation of  [DUMP.SERVICES](https://twitter.com/CoWSwap/status/1653761691442872330?s=20), a project developed by the Yearn Finance team that allows anyone to sell all their tokens in their wallet directly to a single asset
-   Improved the  [Metamask approvals](https://twitter.com/CoWSwap/status/1654125911246245890?s=20)  experience in light of their recent changes in the approval modal. With this new change, users can again easily approve tokens like before
-   Exactly 1 month ago, CoW Protocol, in collaboration with a number of partners, launched  [MEVBlocker](https://twitter.com/koeppelmann/status/1654498401206120449?s=20). It has since protected 231,361 tx from frontrunning
-   CoW Protocol and CoW Swap were covered by the  [Blockworks research team](https://twitter.com/blockworksres/status/1654509591374462978?s=20)!
-   [Stablecoin yield backed by tokenized exposure to US Treasuries](https://twitter.com/CoWSwap/status/1655593638158647297?s=20)  just got even more accessible! CoW Swap users can now efficiently zap to and from fTokens, made possible by the powerful combination of CoW Swap and the Seasolver by [@yearnfi](https://twitter.com/yearnfi)
-   [MEV Blocker protected ~5% of all transactions on Ethereum](https://twitter.com/CoWSwap/status/1656092763119837186?s=20). This is *without* any major wallet integrations
-   Organized a Twitter space alongside Bloxroute, Paraswap, Castle, and VirtueSwap titled: [To MEV or not To MEV](https://twitter.com/CoWSwap/status/1656252809476734976?s=20)! Find the recording  [here](https://twitter.com/CoWSwap/status/1656683332090966016?s=20)
-   [Eigenphi released a report analyzing the impact of MEV in CoW Protocol](https://twitter.com/CoWSwap/status/1656326439216488449?s=20)  and found that MEV is one magnitude lower in CoW Protocol than in any other trading venue
-   [DRPC integrated MEV Blocker](https://twitter.com/drpcorg/status/1656604561132470272?s=20)
-   CoW Swap  [launched Fortune Cookies](https://twitter.com/CoWSwap/status/1657016809491693570?s=20)  to cheer up your day :)
-   A great article was posted on  [Hackernoon](https://twitter.com/CoWSwap/status/1658529055883288578?s=20)  on why CoW Swap is a superior method of trading in L1s
-   CoW Grants Program funded a study on  [surplus-capturing AMMs](https://twitter.com/CoWSwap/status/1658863473261187072?s=20)
-   CoW Swap team published an article titled “[How CoW Swap solves MEV](https://twitter.com/CoWSwap/status/1659559640194240513?s=20)”
-   Partnered with a great set of teams to include  [Degenscore](https://twitter.com/DegenScore/status/1661043341750943753?s=20)  as a criteria for hiring new team members
-   [Safe Bundling](https://twitter.com/CoWSwap/status/1661371643371962369?s=20)  of transactions was released
-   The CoW Swap team published an article: “[CoW Swap for DAOs](https://twitter.com/CoWSwap/status/1661800441099829248?s=20)”
-   The CoW Swap team published an article: “[CoW Grants Program Wave 1](https://twitter.com/CoWSwap/status/1662458640975151104?s=20)”
-   The CoW Swap team published an article: “[How CoW Swap solves MEV](https://twitter.com/CoWSwap/status/1659559640194240513?s=20)”
-   Major development from  [BalancerDAO, as it passed a proposal to offer LP fee Discounts for CoW Protocol solvers in return for forwarding their non toxic flow volume](https://twitter.com/CoWSwap/status/1663181883931230208?s=20).

## Product Updates

**Backend**

The backend team has been working hard to improve the product infrastructure. In  **May**, we:

-   Started working on custom pre and post interactions for the Composable CoW Framework
-   Kicked off a grant for implementing automatic indexing of smart contract orders
-   Implemented a change to allow external solvers to return multiple solutions and have the driver pick the best valid one once the driver is maintained by solvers
-   Worked on the custom order interaction progress
-   Supported several teams during the EthLisbon Hackathon
-   Worked on the autopilot side of things for CIP-20
-   Reviewed brahma integration
-   Made progress on “verified quotes”, which are quotes (price estimates) verified by a simulation

**Frontend**

The frontend team published several improvements to the UI, as well as the overall UI infrastructure. In  **May**, we:

-   Improved the approval context in CoW Swap after a new Metamask release broke our flow of gas-less transactions
-   Improved confirmations for Safe users and mobile wallets that were experiencing issues with blocked confirmations. A nicer UX now prevents these issues
-   Launched the 🥠 Fortune Cookie
-   Worked on the TWAP Order Implementation, specifying architecture design for trade interfaces (Swap, limit orders, advanced orders)
-   Launched the first feature of bundling transactions for Safe users
-   Started specification New API for “Backend for frontend”
-   Fixed USDT token approval (it required an initial transaction with an amount of 0; now it’s back to normal)

## Open Job Positions

The CoW Protocol team is currently hiring for:

### Business Development

[Business Development Team Lead Remote or Lisbon](https://boards.eu.greenhouse.io/cowswap/jobs/4159675101)

### Engineering

[Software Engineering Team Lead Remote or Lisbon](https://boards.eu.greenhouse.io/cowswap/jobs/4167869101)

For more information on our latest job openings, visit:  [https://cow.fi/jobs](https://cow.fi/jobs)


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Welcome back to another CoW Update, where we break down the most notable developments of the last few weeks at CoW Protocol.


CoW Protocol May 2023 Highlights

A Decentralized Autonomous Organization (DAO) treasury refers to the pool of funds that a DAO holds and manages. These funds are often collected through token sales and other fundraising efforts and are used to finance the operations, initiatives, and goals of the DAO.

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### What is a DAO treasury?

The treasury within a DAO is a critical component of its ecosystem, acting as a financial backbone to its operations. It provides the resources necessary for the DAO to function effectively and to fund its projects, grants, rewards, and other expenditures. The management of these funds, therefore, is of utmost importance to the overall health and sustainability of the DAO.

An ideal DAO treasury is expertly managed, with its features and functions geared towards efficient utilization of resources, risk management, and alignment with the DAO’s objectives. This entails strategic budget allocation, effective governance mechanisms, robust risk management protocols, and transparent operations. Through these features, a well-managed treasury supports the resilience and longevity of a DAO, while promoting trust and accountability within its ecosystem.

### DAO treasury management tasks

The management of a DAO treasury involves various tasks, each essential to its effective operation:

-   **Budget Allocation**: This involves the strategic distribution of funds towards activities and initiatives that align with the DAO’s objectives, ensuring the efficient and effective use of resources
-   **Governance**: Treasury governance involves the establishment and implementation of decision-making processes related to the treasury’s operations, ensuring that tokenholders are able to vote on proposals and have a hand in the operation of the DAO
-   **Risk Management:**  This involves the identification, assessment, and mitigation of financial risks that could impact the treasury’s holdings, such as market volatility, regulatory changes, and security threats

### Challenges for DAO treasuries

Managing a DAO treasury comes with unique challenges. Qualities that help tackle these challenges include diversity, liquidity, and transparency.

-   **Diversity**: A diverse treasury portfolio reduces risk by spreading exposure across a variety of assets. Diverse portfolios are more resiliant to market volatility and therefore more protective of the DAO’s holdings. Failure to achieve a diversified portfolio may expose the DAO to heightened risks associated with specific asset classes or market trends
-   **Liquidity**: Ensuring sufficient liquidity is key for the smooth functioning of a DAO, enabling it to quickly mobilize funds for operations, projects, and emergency situations. A lack of liquidity can hinder the DAO’s ability to meet immediate financial obligations, potentially jeopardizing its operations and credibility
-   **Transparency**: Transparency in treasury operations fosters trust and accountability within the DAO’s community. It allows members to monitor the DAO’s financial health and decision-making processes, promoting engagement and participation. Without transparency, a DAO risks eroding trust and participation, which could ultimately undermine its sustainability and success

### How to allocate budgets for DAO treasuries

The allocation of budgets for a DAO treasury is a complex task that requires a solid understanding of the DAO’s goals and strategic planning. Goals may include a diverse set of objectives, such as profit generation, public goods funding, development of a protocol or product, and grant provision. In this context, budget allocation serves four primary goals:

-   **Aligning DAO Expenses with DAO Objectives**: Resources must be directed efficiently to achieve specific goals related to the DAO’s overall mission. This process involves prioritization of expenditures according to their relevance to the DAO’s objectives
-   **Ensuring Efficient Use of Resources**: Regular budgeting and expense control form a feedback loop, which allows for constant review and improvement of resource allocation. This process helps in identifying and correcting issues such as over-spending or under-spending
-   **Promoting Transparency and Accountability**: In DAOs, transparency is of utmost importance. The traceability of expenses fosters a sense of accountability for fund allocation and results. This, in turn, generates public information and reinforces trust in the DAO’s operations
-   **Risk Management:**  In treasury management, thoughtful asset allocation is a key factor in determining the amount of systemic risk taken on by the portfolio. Properly planned asset allocation can reduce overall treasury financial risk

The core tasks of budget allocation include identifying the overall mission and objectives, building financial statements, forecasting financials, and allocating funds:

-   **Identifying Overall Mission and Objectives**: These dictate the needs to be satisfied and serve as the foundation for all further steps in the budget allocation process
-   **Building Financial Statements**: An understanding of the DAO’s operations, financial position, and cash flows needs to be established. Though formal financial statements may not be required, special focus should be given to revenues and expenses as these determine the viability of the operations along with treasury composition and management
-   **Forecasting Financials**: This task can be tricky due to the impact of market cycles and sentiment. However, historical data and past experiences can be valuable resources in this process
-   **Allocating Funds**: Funds available should be distributed to activities or objectives that align with the DAO’s objectives, prioritizing by importance. The expected availability of funds is dictated by financial forecasts

The elements and factors of budget allocation depend largely on the nature of the DAO. Whether it’s for profit, a public good, or any other purpose, the DAO’s specific value proposition should guide budget allocation. In general terms, key categories to consider may include development (in-house or contracted), maintenance, marketing, audits, and governance. This list, however, is not exhaustive and can vary significantly depending on the DAO’s objectives and operational context.

### How to manage governance for DAO treasuries

Core tasks of treasury governance include understanding the DAO’s goals and objectives, defining asset allocation and strategies, risk management, performance reviewing/reporting, and updates:

-   **Understanding DAO Goals and Objectives**: Effective treasury governance starts with a comprehensive understanding of the DAO’s mission, activities, organizational structure, processes, and desired risk/return profile. Knowing the DAO’s risk tolerance, unique circumstances, and constraints helps tailor the treasury governance to the specific context of the DAO
-   **Defining Asset Allocation and Strategies**: After acquiring a deep understanding of the DAO’s context, needs and desires can be translated into specific asset allocations and yield generation strategies. These should be designed to fulfill the DAO’s requirements and align with its risk tolerance
-   **Risk Management**: Risks associated with treasury management in DAOs include market risk, protocol risk, technical risk, governance risk, among others. Effective risk management involves identifying, measuring, and mitigating these risks. Regular monitoring ensures that the DAO’s treasury remains within its risk tolerance
-   **Performance Reviewing/Reporting**: Regular reviews of treasury performance against desired metrics facilitate accountability. Performance reporting also allows for adjustments in the DAO’s strategies to improve future performance
-   **Updates**: The blockchain and cryptocurrency landscapes evolve rapidly. Regular reviews and updates are essential to ensure that treasury management practices remain aligned with the current environment. Changes in governance, regulations, market conditions, and technology are just some factors that necessitate regular updates in treasury management practices

DAO governance management is a cornerstone of effective DAO operations and should include all DAO stakeholders working together towards the common good of the DAO.

### How to manage risk for DAO treasuries

Risk management is a crucial part of DAO treasury management, and risk assessment in DAO treasuries typically encompasses several factors:

-   **Market Risk**: This includes price/asset risk, where changes in the value of assets held in the treasury can impact its wealth, and interest rate risk, which refers to the potential impact of changes in interest rates on the treasury’s assets or liabilities
-   **Counterparty Risk**: This pertains to the risk that a counterparty fails to fulfill their contractual obligations, potentially leading to a loss for the treasury
-   **Liquidity Risk:**  Liquidity risk involves the possibility that the treasury may not be able to quickly convert its assets into cash without incurring significant losses
-   **Protocol Risk**: DAOs often rely on blockchain protocols, which can sometimes be vulnerable to various issues such as bugs or governance disputes
-   **Technical (Smart Contract) Risk**: DAO treasuries usually interact with smart contracts. These can be vulnerable to bugs, hacks, or failures, potentially leading to substantial losses
-   **Legal/Regulatory Risk**: Lastly, changes in legal or regulatory environments can also present a risk to DAO treasuries. These can arise from changes in laws related to cryptocurrencies or DAOs or from broader changes such as shifts in tax laws or regulations governing financial transactions

DAO managers have a duty to their stakeholders to be aware of and to carefully manage all risks relating to the DAO using the above outlined strategies.

### How Karpatkey manages DAO treasuries

Many DAOs, including CoW DAO, have partnered with  [Karpatkey](https://www.karpatkey.com/)  for their treasury management needs. Karpatkey retains a team of web3 professionals who provide financial, risk management, business development, legal, and other services to DAOs, with a focus on treasury management.

Karpatkey helps DAOs make the most out of their treasury funds in several ways:

-   **Generating Yield**: An idle treasury comes with significant opportunity cost. Karpatkey regularly rotates DAO treasury funds into yield-bearing crypto assets to maximize earnings
-   **Risk Management**: While generating yield is important, treasury funds must, above all, stay secure and protected from risk exposure. Karpatkey’s team of risk experts helps DAOs make smart fund allocation decisions
-   **Training a Core Treasury Team**: Karpatkey mentors internal DAO team members on best practices around treasury management including wallet signature decentralization, liquidity providing, and more
-   **Facilitating Liquidity**: Karpatkey sometimes helps provide liquidity for DAO tokens to be traded easily at any time

Karpatkey counts some of the most well-respected DAOs among their clients, including Gnosis, Balancer, ENS, and CoW Protocol. Their non-custodial assets under management total close to $400,000,000, so they know how to take care of large treasuries. To learn more about Karpatkey, check out their  [official website](https://www.karpatkey.com/).

## How CoW Swap can help your DAO

![2-how-cow-swap-can-help-your-dao.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_how_cow_swap_can_help_your_dao_f3be5b2caf.webp)

Managing a treasury is a complex task with lots of moving parts. When it comes to making trades using DAO funds, many DAOs go straight to AMMs like Uniswap. This can cause problems as liquidity pools expose trades to MEV bots, experience significant price impact, and are generally sub-optimal for the needs of DAOs — resulting in worse prices overall. CoW Swap, on the other hand, is  [optimized for DAO trading](/learn/cow-swap-for-daos).

On CoW Swap, DAOs can:

-   **Forget about timing trades**: Rather than locking your price in when you first sign your multi-sig, CoW Swap actually finds you the best price at the time of execution, so you get the best deal without having to worry about timing your trade
-   **Automatically manage price impact**: CoW Swap spreads your order across different liquidity sources including peer-to-peer swaps and multiple on-chain liquidity pools
-   **Outsmart the MEV bots**: On CoW Swap, all of your trades are always protected against MEV through  [sophisticated trading algorithms](https://cow-protocol.medium.com/how-cow-swap-solves-the-mev-problem-fd35b0127390)
-   **Enjoy more price surplus than anywhere else**: On CoW Swap, your quoted price is the worst price you’ll have to pay. Between Coincidence of Wants matches, gas optimizations, and MEV protection, there’s lots of room for CoW Swap to find price surplus on your trade to forward to you
-   **Custom-tailor every order**: Support for EIP-1271 signatures is now live on CoW Swap, meaning that any DAO with engineering resources can code any custom order type they’d like
-   **And more**: DAOs can enjoy a range of advanced order types for streamlining token launches, buyback programs, or any other special types of transactions

CoW Swap is a top choice for DAOs making trades. In fact, one out of every three DAO trades in DeFi takes place on CoW Swap.

To learn more about how your DAO can trade on CoW Swap,  [join our Discord](https://discord.com/invite/cowprotocol)  or  [check out CoW Swap for yourself](https://cow.fi/).


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Analyzing DAO treasury management strategies and challenges


Effective Treasury Management for DAOs

**TL;DR**

-   The GrantsDAO has significantly impacted the growth of the CoW Swap community by funding several import
-   CoW Protocol’s GrantsDAO played a key role in funding community driven projects and growing the reach of the protocol with technical improvements as well as marketing initiatives
-   The “CoW Swap Golang SDK/Client and TWAP/DCA CLI Bot/App” project, funded by GrantsDAO, created a ready-to-use client for integrating CoW Protocol into Go applications.
-   The project “dump.services” aimed to enhance the utility of CoW Protocol by allowing users to efficiently sell multiple tokens for another token.
-   The “Rotki’s CoW Swap Trading History Support” project integrated CoW Protocol’s trading history into the Rotki platform, enhancing transparency and the user experience.

In the rapidly evolving world of DeFi, CoW Protocol and its community have made notable strides, driven by the force of the GrantsDAO. This article provides a comprehensive overview of some of the most significant projects that the GrantsDAO ([reelected in January 2023](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fcip-8-cowdao-grants-program-cgp%2F314%2F41&sa=D&ust=1685373873240912&usg=AOvVaw3YU8HiWgFjmooQH7nONcXk)) has successfully funded and completed.

These initiatives, ranging from feasibility studies to protocol enhancements, demonstrate the commitment of CoW Protocol’s community to fostering innovation, enhancing transparency, and driving efficient value distribution within the DeFi space.

Let’s take a detailed look at the grants we funded in the second half of the period. The first half is covered in part 1.

## Surplus-capturing AMMs — a feasibility study

Andrew, Evan, and Mohammed proposed the grant “[Surplus-capturing AMMs — a feasibility study](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-proposal-surplus-capturing-amm-study%2F1357%2F4&sa=D&ust=1685373873242282&usg=AOvVaw02ECqTV8cG_5js3WjhZA2P)” which successfully addressed a prevailing issue in the constant function market maker (CFMM) model. The issue revolved around surplus value captured by arbitrageurs and Maximal Extractable Value (MEV) searchers, often disadvantaging users and liquidity providers (LPs).

The team proposed a distinctive automated market maker (AMM) design that would custody its own liquidity while using pricing discovered by CoW Protocol’s solvers. This AMM aimed to provide improved pricing for CoW users and yield for LPs from passive liquidity provision without the usual exposure to adverse selection.

The project, which ran over a 6–8 weeks timeline, was fully funded by the GrantsDAO, and the team successfully completed their research. They developed a high-level candidate architecture for the “surplus-capturing” AMM and a quantitative model of the additional value that could be delivered to LPs and users.

The final deliverable was a comprehensive technical report and a GitHub repository containing the code used for the studies. The completion of this grant marked a significant step forward in refining the dynamics of AMM designs and highlighted ways AMMs can be improved.

## CoW Protocol Golang SDK/Client and TWAP/DCA CLI Bot/App

In a successful initiative by @itsahedge, the GrantsDAO funded the creation of a CoW Protocol Golang SDK/client and a  [CoW Protocol TWAP/DCA CLI bot/app](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-proposal-cow-swap-golang-client-dca-twap-order-system-w-interface%2F1192%2F12&sa=D&ust=1685373873243901&usg=AOvVaw2SApQfovX-xAzNJWywYOBq). This project aimed to simplify the integration of CoW Protocol into Go applications, providing developers with a ready-to-use client and eliminating the need to create their own API.

The grant was structured in multiple milestones, with the first, the CoW Protocol Golang SDK/client (funded at $10k) delivered in two installments. Upon completion, the grantee delivered a comprehensive Golang SDK with documentation and example implementation code. This  [completed project](https://www.google.com/url?q=https%3A%2F%2Fgithub.com%2Fitsahedge%2Fgo-cowswap&sa=D&ust=1685373873244577&usg=AOvVaw3eTS1oBgIeNxi0xljHcZzU)  now paves the way for future applications and tools within the CoW Protocol ecosystem, fostering its continued growth.

## Time-Weighted Average Price (TWAP) Orders

Undertaken by mfw78, this grant implemented advanced TWAP order types for CoW Protocol via EIP-1271 smart contract orders. This unique feature in the DeFi market enhances CoW Protocol’s utility and increases order concentration.

The grant was structured with key milestones, including the implementation of a user-upgradeable proxy contract with TWAP logic, a factory contract for users to deploy from, a comprehensive test suite for contracts, an example script for submitting TWAP orders off-chain to CoW Protocol, and relevant documentation for integrators/developers.

CoW DAO funded this project with $10,000 distributed in two installments and oversaw its completion in January 2023. This initiative has successfully enhanced the CoW Protocol with advanced order types, contributing to its ongoing growth and utility of CoW Protoocol.

## dump.services

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Anon, dumping tokens has never been this easy. 😘<br><br>Thanks to <a href="https://t.co/RVNxwDT9CI">https://t.co/RVNxwDT9CI</a>, a project developed by <a href="https://twitter.com/yearnfi?ref_src=twsrc%5Etfw">@yearnfi</a> &amp; funded by the CoW Grants Program, token dumping has evolved into fine art. 🐮 🖼️ 🐰 <a href="https://t.co/PYMoZiOYxB">pic.twitter.com/PYMoZiOYxB</a></p>&mdash; CoW DAO | CoW Swap &amp; MEV Blocker (@CoWSwap) <a href="https://twitter.com/CoWSwap/status/1653761691442872330?ref_src=twsrc%5Etfw">May 3, 2023</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

Completed by the team of Majorfi, Saltyfacu, and Poolpitako, who are experienced developers with various successful deployments such as ape.tax, bowswap.finance, smold.app, and rarityextended.com. This project aimed to enhance CoW Protocol’s utility by launching  [dump.services](https://www.google.com/url?q=https%3A%2F%2Fdump.services%2F&sa=D&ust=1685373873246168&usg=AOvVaw0cazLatfoiivCc78KWpfH7), a platform that enables users to efficiently sell multiple tokens in a single transaction.

![1-dump.services.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_dump_services_f08a9ef3d5.webp)

The main feature of dump.services is allowing users to consolidate their wallet contents into a single token. dump.services does this by listing the user’s tokens, showing balances and approval states, and enabling them to select which tokens they want to sell. The orders are then sent to the CoW Protocol API simultaneously.

The team also added functionality for SAFE users including token approval batching and pre-signed batches. This feature has helped increase the number of CoWs in the system, thus reducing costs and increasing surplus.

The project was completed within a month,  [following which the CoW Grant Committee](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-application-dump-services%2F1462%2F7&sa=D&ust=1685373873247545&usg=AOvVaw1dInXdCDfva8jOm1syj6ML)  reviewed it. CoW DAO funded the project with 40k xDAI: half paid upfront and the remainder upon the website’s production readiness. The funding covered domain and server costs, with the majority allocated for front-end development, design, and marketing salaries. This successful integration of dump.services has contributed to the growth and functionality of the CoW Protocol.

## Cowbot Twitter Bot

Developed by @YellowCurtain3, an experienced developer involved in various CoW Swap-related projects, including CoW Feeder and  [CoW Bot](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FMooingCowbot&sa=D&ust=1685373873248837&usg=AOvVaw0FdeGALAa3rxNKggz6UoLh). This project’s objective was to enhance CoW Protocol’s reach and engagement via a Twitter bot.

The key feature of this project was to develop a script capable of identifying COW transactions and building a Twitter bot to communicate this information. This tool adds significant value to the community by providing real-time updates on COW transactions. The project further contributes to the CoWmunity growth initiative by fostering engagement and keeping the community informed about the latest transactions.

![2-cowbot.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_cowbot_f7636df763.webp)

## Enhancing Transparency with Rotki’s CoW Swap Trading History Support

[The CoW Grants committee has successfully backed](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-application-integration-cow-swap-trading-history-into-rotki%2F1433%2F4&sa=D&ust=1685373873250804&usg=AOvVaw2JG2ckb3ROkgs74NF1jLRO)  a pioneering project led by @celkacelka, the founder of Rotki.  [Rotki](https://www.google.com/url?q=https%3A%2F%2Frotki.com%2F&sa=D&ust=1685373873251380&usg=AOvVaw3SLE_wdlXhgic-QEApZFc1), known for its open-source portfolio tracking, analytics, and tax reporting capabilities, has always placed user privacy above all else. The primary objective of this grant-backed project was to  [incorporate CoW Swap’s trading history](https://www.google.com/url?q=https%3A%2F%2Fgithub.com%2Frotki%2Frotki%2Fissues%2F5639&sa=D&ust=1685373873251904&usg=AOvVaw2DVmV6WYnQSogO29PG6TSQ) into the Rotki platform, enhancing the usability of the platform while promoting user experience.

This integration, made possible through the grant, offers users an easy way to view and manage their CoW Swap transactions directly within Rotki. A standout feature of this addition is the precise decoding of transactions, which offers an added layer of transparency. When users initiate a Profit and Loss (PnL) report, the report includes CoW Swap decoded trades, thereby comprehensively evaluating their on-chain activity.

![3-rotki.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_rotki_9ef83a1468.webp)

As part of the broader CoWmunity growth initiative, this grant-funded project emphasizes the importance of a trustworthy, auditable, and privacy-focused platform for CoW Swap traders to track their trade history. This increases CoW Protocol’s overall transparency and enables CoW Swap users to see their transactions within the Rotki app.

This grant-funded integration was strategically split into two key milestones. The initial stage involved implementing and testing transaction decoders for CoW Swap transactions on Ethereum mainnet. Following this, the second stage focused on the development of the user interface for the CoW Swap decoders within Rotki, culminating in their deployment in a Rotki production release. This project was made possible through a grant totalling $9k xDAI, with the CoW Swap Integration Grant contributing $6k and Rotki providing the remaining $3k.

## Promoting Transparency with ZeroMEV Data API

Led by Pmcgoohan of  [zeromev.org](https://www.google.com/url?q=https%3A%2F%2Fzeromev.org%2F&sa=D&ust=1685373873254411&usg=AOvVaw3Gvh1mOqCy2GOkFPcmgkaZ), an established developer with two decades of experience in automated trading systems, a significant project has been accomplished under the CoW Protocol’s Grant committee. The ZeroMEV Data API project emphasizes accessibility and transparency of Maximal Extractable Value (MEV) data on Ethereum, which was previously limited.

With the ZeroMEV Data API project, transaction granularity MEV summary data sourced from zeromev.org is now published via a public API. This data access is unrestricted for CoW Protocol, Zeromev, and their partners, with a minimum provisioning and maintenance period of 12 months.

![4-zeromev.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_zeromev_486a49a9e4.webp)

[The project’s main goal](https://www.google.com/url?q=https%3A%2F%2Finfo.zeromev.org%2Fapi.html&sa=D&ust=1685373873255887&usg=AOvVaw0SZjIFpfPGS_zqBXDT7puH) was to increase transparency and awareness around MEV’s problematic nature, and in doing so, promote sustainable solutions. Some potential use cases built on top of the proposed API include comparing value extracted from users by the DEX protocol, comparing the amount of MEV incidents for every MEV type split by DEX protocol, and providing educational snippets on CoW Swap to inform about MEV incidents when interacting with various DeFi protocols.

The project was funded with 30k xDAI, half paid upfront and the remaining upon completion. This funding ensured the successful development and maintenance of the integration, leading to a significant increase in the transparency and awareness of MEV issues in the CoW Protocol community.

## Advancing DeFi with Safe Composable Conditional Orders

Drawing upon his extensive experience with smart contract development, mfw78 has successfully led the development and implementation of the  [‘Safe Composable Conditional Orders](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-application-composable-conditional-orders%2F1451&sa=D&ust=1685373873257136&usg=AOvVaw12aMrNAdcZPSd_6P1I8es_)’ project, an initiative supported by the GrantsDAO.

The Safe Composable Conditional Orders project was built to address the challenge of creating a standard for the limitless options of EIP-1271 orders. This standard aims to reduce the number of contract deployments required, increase gas efficiency, and enhance the user experience. The solution mfw78 proposed was a “Conditional Order Router” Fallback handler, with Conditional Orders summarized in a merkle tree. The root of this tree is signed by the Safe to confirm its accuracy, enabling limitless simultaneous conditional orders to accommodate countless use cases.

The impact of this project is substantial. It not only enhances the utility of CoW Protocol through composable DeFi-market unique order types but also mitigates user experience friction for multiple conditional order types.

The project was completed in one phase over four weeks, with a budget of $10,000. The CoW DAO disbursed half of the payment upfront, and the remaining will be sent upon the satisfactory completion of the code, as determined by the CoW team.

## GrantsDAO’s Impact: Driving DeFi Forward with CoW Protocol

The GrantsDAO has proven to be a significant contributor to the CoW Swap community. Through its consistent funding and support of important projects, the GrantsDAO has played a crucial role in CoW Swap’s development, fostering a DeFi environment that’s more transparent, user-friendly, and equitable. By facilitating numerous innovative grants, the GrantsDAO has successfully expanded the functionality and reach of CoW Protocol. As we look to the future, the projects completed under the GrantsDAO highlight the ongoing growth and untapped potential of the DeFi sector.


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This is part 2 of a 2-part series measuring the progress of the CoW Grants Program from June 2022 to January 2023


CoW Protocol GrantsDAO: Grant Wave 2

**TL;DR**

-   CoW DAO introduced its grants DAO in June 2022 to propel the growth of the CoW Protocol ecosystem
-   The CoW Grants Council, consisting of team and community members, reviews grant proposals that align with the ecosystem’s needs
-   CoW DAO’s grants committee has approved various technical grants, including Milkman, a sophisticated but easy-to-use method for routing trades through CoW Protocol for Multi-Sig users
-   Grants Committee has approved Willy Ogorzaly’s proposed grant: integrating CoW Swap into ShapeShift DAO’s in order to enhance liquidity, provide MEV protection, and improve trade execution
-   The Grants Committee has enabled core contributors to work with the protocol, with two core contributors joining on a full-time basis

The CoW DAO introduced its grants DAO in June 2022 as a strategic effort aimed at enhancing operations within the DAO framework. The primary objective of this initiative is to harness and deploy crucial resources to propel the growth trajectory of the CoW Protocol ecosystem.

The grants DAO is comprised of both team and community members and undertakes the task of reviewing grant proposals. These proposals, open for discussion in a dedicated  [forum](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Fc%2Fcow-grants-program%2F10&sa=D&ust=1685118553682749&usg=AOvVaw0uKeTAtk3PIM81D313G8Er), are carefully scrutinized by the council to ensure that potential grants align with the ecosystem’s needs and objectives.

The grants initiative is not just about facilitating growth; it also focuses on creating public goods and developing products specifically for the DAO. Doing so broadens the reach and impact of CoW Protocol. Through public discourse and applications, the community can identify and respond to the ecosystem’s most pressing needs, and support innovative projects that further expand CoW Swap’s capabilities.

Let’s take a detailed look at the grants we funded in the first half of the period. The second half is covered in part 2.

## Milkman: Streamlining Smart Contract Routing

![1-milkman.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_milkman_772feceb4a.webp)

Charles N. Dalton, a contributor to Yearn Finance,  [proposed](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-proposal-milkman%2F1129%2F39&sa=D&ust=1685118553683691&usg=AOvVaw0FGWk4uvPEjbtFqIWkKRBX)  an innovative solution for improving the routing of smart contracts through CoW Protocol. The proposal revolved around ‘Milkman’, a smart contract system uniquely devised to optimize this process. The goal was to alleviate the inefficiencies encountered when swapping tokens via Gnosis Safe.

Milkman was conceived as a trustless, user-friendly layer within CoW Protocol, with its primary function being to simplify the routing of order flows for DAOs. Dalton requested a grant of $45,000 to fund the development of Milkman.

After approval of the proposal and allocating the necessary funds,  [Milkman](https://www.google.com/url?q=https%3A%2F%2Fetherscan.io%2Faddress%2F0x11C76AD590ABDFFCD980afEC9ad951B160F02797&sa=D&ust=1685118553684262&usg=AOvVaw2BbKLuG8RcQUbtTKzQXGb_)  underwent a successful audit. Subsequently, the ‘price checkers’ and testing suite were developed and integrated. Since the launch, the Milkman bot has proven stable and operational in production, handling swaps without issues. The Python SDK was successfully deployed to PyPi under the name ‘milkman_py 0.1.1’.

These accomplishments led to the  [full payout](https://www.google.com/url?q=https%3A%2F%2Fgnosisscan.io%2Ftx%2F0x9cc8529842f0f102ff3e011f35264aaaed78ee261140b0cff5d07a62e7ebf66a&sa=D&ust=1685118553684732&usg=AOvVaw38UKXHmPVjYVNAGAL475QC)  of the grant, marking the successful execution of this pioneering initiative within CoW Protocol.

## Privacy-Preserving CoW Swap Trader Leaderboard

Software developer alon.cow  [proposed](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fprivacy-preserving-cow-swap-trader-leaderboard-based-on-sismo-badges%2F1258&sa=D&ust=1685118553685311&usg=AOvVaw2Wk2SuFeAYX2EL1H1lb-UL)  the creation of a Privacy-Preserving CoW Swap Trader Leaderboard, an initiative based on Sismo Badges. Recognizing the significant privacy concerns of CoW Protocol’s traders, this proposal aimed to facilitate the generation of a Zero-Knowledge (ZK) cryptographic “Proof of Volume”. This solution allowed traders to  [mint a badge](https://www.google.com/url?q=https%3A%2F%2Fopensea.io%2Fassets%2Fmatic%2F0x71a7089c56dff528f330bc0116c0917cd05b51fc%2F10001239&sa=D&ust=1685118553685578&usg=AOvVaw1nsG6SuJQNxnjRHM-P2zEO)  to an unassociated account, thereby demonstrating their aggregate trading activity without disclosing the details of their actual wallets. In addition to its primary function, the badge is designed to feature in a “CoW Trader Leaderboard” and a dedicated snapshot space is known as the “CoW Trader Union”.

Following this proposal, the grants committee and the broader community conducted testing of the initiative. It proved its value and efficacy, and the grant was  [fully funded](https://www.google.com/url?q=https%3A%2F%2Fgnosisscan.io%2Ftx%2F0xe656d0e3559af163aff80316a4a623c74568da5775ee019c4398c43f81696b90&sa=D&ust=1685118553686033&usg=AOvVaw0u8zmo-C-yVYs0S_IXRwtj). This initiative now stands as a valuable asset to the community, providing a unique solution while encouraging active trading within the CoW Protocol ecosystem.

![2-privacy-preserving-cow-swap.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_privacy_preserving_cow_swap_654318d646.webp)

## ShapeShift DAO’s Integration with CowSwap

Willy Ogorzaly, a member of the ShapeShift DAO community, initiated a  [grant proposal](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-proposal-cowswap-shapeshift-integration%2F1201&sa=D&ust=1685118553686731&usg=AOvVaw2R99rtmLJUesohrvv6bYH6)  focusing on the integration of CoW Swap into ShapeShift’s operations. This strategic move was aligned with ShapeShift’s aim of becoming a leading interface within the decentralized finance ecosystem, offering users unparalleled liquidity, protection from MEV, and efficient trade execution.

The integration proceeded in several stages and successfully achieve the first volume bounty. This stage included the integration of CoW Swap as the default DEX protocol for Ethereum mainnet trades and the modification of the user interface to accommodate the differences between CoW Swap and 0x’s user experience. Moreover, ShapeShift’s Swapper library added CoW Protocol, thus broadening its roster of supported DEX protocols and aggregators.

The next stage, currently ongoing, is committed to refining the CoW Protocol integration, resolving issues identified by the CoW Protocol team, and extending the functionality offered by the protocol. This includes adding custom recipient addresses and promoting the CoW Protocol integration.

Future stages envision further developments, such as routing trades from unwrapped ETH to CoW Protocol, making CoW Protocol the default DEX protocol for Gnosis Chain, and compensating users who generate COW tokens for the DAO’s Treasury with FOX Tokens.

The grant proposal called for a two-step funding arrangement. The DAO paid out the first bounty of 5k xDAI and 50k COW. The same amount is slated for disbursement upon completion of the second bounty. Moreover, the DAO established volume-based bounties, offering rewards from 50k to 200k COW for achieving specific trade volumes by December 31, 2023.

![3-shapeshift-dao-integration.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_shapeshift_dao_integration_c8396d2684.webp)

The community accepted the grant proposal, and the DAO distributed the funds as planned. The integration of CoW Swap into ShapeShift’s operations should significantly boost the volume of trades routed through CoW Swap, further bolstering the growth and prominence of CoW Protocol.

![3-1-shapeshift-dao-integration.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_1_shapeshift_dao_integration_526df55c98.webp)

## UI/UX Designer Core Contributor Grant Proposal

Fairlighteth, an experienced UI/UX designer and front-end developer, previously  [submitted](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fgrant-aplication-core-contributor-ux-ui-designer%2F1223&sa=D&ust=1685118553690445&usg=AOvVaw05SuqaBctv1wETH3URFydo)  a grant proposal to continue his integral role as a core contributor for CoW Protocol. Since the project’s inception, Fairlighteth has played a significant role in its development, being responsible for the creation of the entire CoW Swap and CoW Protocol branding. His work also involved contributing to the design and front-end development of various CoW pages. To support his ongoing contributions for the period of May to October 2022, Fairlighteth requested a grant of 42,499.96 EURO, denominated in wXDAI token. The payment structure was divided into an initial upfront payment where the Grants DAO has paid out on a monthly basis.

Following approval, the DAO funded the grant, enabling Fairlighteth to continue providing high-quality graphic design services to the DAO. His subsequent contributions include significant additions such as a completely revamped grant website and the introduction of new features to the CoW Swap page.

![4-ui:ux-designer-core-contributor.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_ui_ux_designer_core_contributor_3b8cba9853.webp)

## Core Contributor — Business Development Grant Proposal

Max (zEniTH), who has over three years of experience in Business Development & Sales and an 18-month tenure in the web3 space, previously applied for a  [grant](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2Ft%2Fcore-contributor-business-development%2F1116&sa=D&ust=1685118553692347&usg=AOvVaw1wR1ZnQ5HlqaPd-Hzisvks)  to enhance the business development and user base growth of CoW Protocol. His proposed role involved establishing foundational frameworks for DAO collaboration, coordinating with potential prospects, and handling inbound inquiries.

A grant split between 1000 xDAI and 6700 COW was awarded to facilitate this three-month trial grant. The program’s success was measured based on the degree of successful integration, as evidenced by an increase in volume and community growth. The GrantDAO committee has approved the grant, enabling Max to contribute to CoW Protocol through his BD work.

Max has impressively surpassed many significant benchmarks during his tenure. He has been instrumental in broadening the influence of CoW Protocol and fostering strategic collaborations with other protocols and teams, most notably with Cryptotesters, where he remains an active participant. His contributions extend beyond just business development; he is a reliable resource for the community, addressing various queries related to CoW Protocol. Moreover, Max played a pivotal role in the recent launch of the MEV Blocker, demonstrating his commitment to the continuous growth of the CoW Protocol ecosystem.

## The Accomplishments of CoW DAO’s First Grant Cycle

The first wave of the CoW DAO’s Grant Initiative has been a resounding success. Each project, from the innovative Milkman system to the integration with ShapeShift DAO has contributed to the growth of Cow Protocol. The diverse range of funded proposals illustrates the community’s ability to identify and respond to the ecosystem’s needs, thus enhancing CoW Swap’s capabilities and user experience.

The contributions of individuals like Fairlighteth in UI/UX design and Max (zEniTH) in business development have been particularly notable, demonstrating the value of the grants program in attracting and nurturing talent.

Overall, the success of this initial wave underscores the potential of CoW DAO’s grant initiative, setting a strong foundation for future innovation and growth within the CoW Protocol ecosystem.


This is part 1 of a 2-part series measuring the progress of the CoW Grants Program from June 2022 to January 2023


CoW Protocol GrantsDAO: Grants Wave 1

CoW Swap allows all types of traders to make secure trades that are price-optimized and MEV-resistant, but the benefits of the exchange really shine when it comes to DAOs.

Decentralized autonomous organizations (DAOs) are blockchain-based collectives of individuals who come together to create a product, service, or social community. Many DAOs mint their own governance tokens and are responsible for allocating treasury funds. But when it’s time to make trades with these funds,  **DAOs face unique challenges not encountered by other types of traders**.

These issues stem from a variety of factors:

-   Placing and executing trades takes time
-   Trade details are public, and announced well in advance
-   Large trades create large price impact
-   Large trades sizes call for large slippage tolerances
-   DAOs need the best prices
-   DAOs need special order types

CoW Swap’s unique trading model addresses each of these concerns, making DAO trades easier, safer, and cheaper. Here’s how:

### Placing and executing trades takes time

Most DAOs rely on multi-signature wallets (like  [Safe](https://www.google.com/url?q=https%3A%2F%2Fsafe.global%2F&sa=D&ust=1685041403328994&usg=AOvVaw2CHqh-9PmNof96z8hOlGKi), which has a CoW Swap native app) to keep their treasury funds secure. This is a great idea, but collecting signatures can be a slow and tedious process when it’s time to make a trade. In the time needed to collect signatures, prices can fluctuate — meaning that DAOs must set a high slippage tolerance for their trade (thereby opening themselves up to MEV attacks) or risk their trade reverting. Whether it’s signing the multi-sig or waiting for governance votes, delaying a trade by even a little bit can alter the best-priced execution path for the trade quite substantially.

DAOs that trade on CoW Swap don’t need to worry as much about tight signature coordination, though. This is because CoW Swap trades are optimized at the time of execution, completing for the quoted price or better.

Here’s how it works: when a user submits an order on CoW Swap, they do not actually initiate a blockchain transaction with a fixed execution path (like they do on Uniswap or 1inch, for example). Instead, traders submit orders as signed “intent to trade” messages which include trade details like the amount and type of tokens to be traded. CoW Swap’s  [solvers](https://docs.cow.fi/cow-protocol/tutorials/solvers)  then find the best execution path for the trade and execute it on-chain for the user using this optimal path.

This means that DAOs can take their time collecting signatures, knowing that they will receive the best price for their trade once the last wallet has signed (and knowing that an artificially-high slippage tolerance will not be exploited by MEV bots).

### Trade details are public, and announced well in advance

The governance process is one of the more innovative aspects of DAOs. Unfortunately, public proposals that reveal the details of large trades are a gold mine for MEV bots.

![1-trade-details-are-public.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_trade_details_are_public_7d602bae01.webp)

DAO trades usually begin as forum proposals discussing the specifics of the trade such as how big the trade will be, what assets will be traded, what exchange will be used, when the trade will take place, and more. Exposing this information publicly allows opportunistic traders and MEV bots to intercept and exploit the transaction.

Fortunately, CoW Swap protects every trade from MEV in several ways:

-   **Delegated Trade Execution**: When traders submit an order to CoW Swap, algorithms known as “[solvers](https://www.google.com/url?q=https%3A%2F%2Fdocs.cow.fi%2Foff-chain-services%2Fsolvers&sa=D&ust=1685041403331334&usg=AOvVaw3grj40A6m2CgrYC9cHOP-m)” execute the trade on behalf of the trader. Solvers have sophisticated methods of fighting MEV and they take on the MEV risk themselves — so traders have nothing to worry about
-   **Batch Auctions**: CoW Swap batches trades together, providing an opportunity for peer-to-peer order matching through Coincidence of Wants (CoWs). If two traders in the same batch swap assets with each other, they don’t have to use on-chain liquidity sources to fill their order, meaning they save on protocol fees and bypass MEV bots lurking in the mempool
-   **Uniform Clearing Prices**: CoW Swap settles all trades in a batch at the same clearing price, so MEV bots cannot exploit the transactions by reordering them

These factors ensure that DAO transactions are routed in a way that prevents MEV bots from exploiting them, even if they know the trade details in advance.

### Large trades create large price impact

DAO trades are usually large transactions that move the market, leading to worse prices for the DAO overall. On CoW Swap, price impact is mitigated through several factors:

-   When CoW Swap finds a Coincidence of Wants opportunity, the order may be filled without accessing on-chain liquidity at all, and thus without creating a price impact
-   For trades that are not fully filled by a CoW, CoW Swap makes use of multiple on-chain liquidity sources and quotes from market makers to spread out the price impact
-   Special order types like partially fillable limit orders and TWAP orders spread trades out over time, further reducing price impact

The CoW Swap  [solvers](https://www.google.com/url?q=https%3A%2F%2Fdocs.cow.fi%2Foff-chain-services%2Fsolvers&sa=D&ust=1685041403333067&usg=AOvVaw1a_T4FLwxz-fBYMye6sKMV)  automatically search for Coincidences of Wants and optimize the routing of each order to on-chain liquidity. All DAOs have to do is simply place their order. Special order types have to be selected in the CoW Swap UI, however, it just takes a few clicks to add them to a trade as well.

### Large trades sizes call for large slippage tolerances

When it comes to DAOs, setting the right slippage for a large trade can be a complex problem.

The gap in timing between deciding on an order and actually placing it often requires DAOs to set a large slippage tolerance in order to anticipate and account for price movements. This, however, leaves room for exploitation by MEV bots.

Existing solutions like Uniswap and 1inch require DAOs to either:

1.  Set a tight slippage for their trades, making it likely that transactions will fail and potentially leading to a DAO re-vote.
2.  Set a large slippage, which leaves room for MEV attacks.

DAOs can lose thousands of dollars to MEV in a single transaction. Some real-world examples that we can look at using on-chain data include  [this 1,000 ETH to USDC swap from Gitcoin](https://www.google.com/url?q=https%3A%2F%2Fetherscan.io%2Ftx%2F0x0e3a1da511c715f1c2451da10086cffb93dfab461ea99786cacfadfe306a7b36&sa=D&ust=1685041403334196&usg=AOvVaw1uRdeO5tkSmJJD7iGgSUCL)  where the DAO lost  [over $10,000 to a sandwich attack](https://www.google.com/url?q=https%3A%2F%2Fzeromev.org%2Fblock%3Ftxh%3D0x0e3a1da511c715f1c2451da10086cffb93dfab461ea99786cacfadfe306a7b36&sa=D&ust=1685041403334457&usg=AOvVaw10EoaSCFsVJMKQLut6txix), as well as  [this swap from Rarible](https://www.google.com/url?q=https%3A%2F%2Fetherscan.io%2Ftx%2F0x7ed5ae69f16e01230884f0c6c7641cd135d8a2cf03169c9630d28309037c6495&sa=D&ust=1685041403334704&usg=AOvVaw3-Ss0Mrzi4_hW1w0yO5Ghw)  where the MEV damage  [totaled over $8,000](https://www.google.com/url?q=https%3A%2F%2Fzeromev.org%2Fblock%3Ftxh%3D0x7ed5ae69f16e01230884f0c6c7641cd135d8a2cf03169c9630d28309037c6495&sa=D&ust=1685041403334925&usg=AOvVaw0jvtZYYtQX6_It39kSVJ7j).

![2-large-trade-sizes.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_large_trade_sizes_c44fe851bf.webp)

As a part of delegated trade execution, CoW Swap’s  [solvers](https://www.google.com/url?q=https%3A%2F%2Fdocs.cow.fi%2Foff-chain-services%2Fsolvers&sa=D&ust=1685041403335479&usg=AOvVaw0qUT_t75RfA40G3vwclzPq)  automatically optimize the user-defined slippage tolerance during execution time to ensure that each trade completes without leaving money on the table (or any juicy arbitrage for those greedy MEV bots).

![2-1-large-trade-sizes.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_large_trade_sizes_644eb6a84f.webp)

[_Do CoWs slip-age less?_](https://www.google.com/url?q=https%3A%2F%2Fcow-protocol.medium.com%2Fdo-cows-slip-age-less-389150154f84&sa=D&ust=1685041403336018&usg=AOvVaw2KyS16CNfZYWrm4-LXg4Fd)

### DAOs need the best prices

DAO treasury managers have a duty to their stakeholders to execute trades at the best possible prices.  **According to** [**karpatkey**](https://www.karpatkey.com/)**, who works with ENS, Balancer, Gnosis, Lido and CoW treasuries,** fulfilling this obligation is easy on CoW Swap because all trades, whether large or small, almost always receive better prices than they would through individual liquidity pools or DEX aggregators. On CoW Swap, the  [solver](https://www.google.com/url?q=https%3A%2F%2Fdocs.cow.fi%2Foff-chain-services%2Fsolvers&sa=D&ust=1685041403336458&usg=AOvVaw3DpY3ndTh-JXcldfP_Rnlo)  that provides the most value to the user wins the right to settle the trade; this is in contrast to the default Ethereum model where the searcher that provides the most MEV profits to the validator decides how transactions should be ordered.

Coincidences of Wants bring down the overall fee cost of any trade. This is because CoWs bypass on-chain protocols that usually charge a fee, and also because a peer-to-peer swap costs less in gas than an on-chain liquidity pool swap. For retail traders, this is an added convenience, but for large DAO trades, this can mean thousands or tens of thousands of dollars in savings thanks to price improvements.

Additionally, when a CoW Swap trade completes at a different price than the original quote, the traders always come out on top. There are several reasons why a trade might execute for a different price than the quote including MEV (which CoW Swap protects against) and asset price movement in the time between the quote and execution.

### DAOs need special order types

Not only is CoW Swap well-suited to DAOs at the protocol layer, but it also offers several special order types that DAOs may find useful:

-   **Partially Fillable Limit Orders**: CoW Swap’s surplus-capturing limit orders allow traders to place an order for a limit price that gets filled over time. This helps spread out price impact, avoids MEV, and captures liquidity at a predictable price
-   **TWAP Orders (Coming Soon)**: Time-weighted average price orders split trades up into several equal transactions that get executed over time. This reduces price impact, allows for a lower slippage tolerance, and smooths out the effects of market volatility on each trade
-   **Milkman**: The  [Milkman](https://www.google.com/url?q=https%3A%2F%2Fgithub.com%2Fcharlesndalton%2Fmilkman&sa=D&ust=1685041403337684&usg=AOvVaw2l-9RQ3mIJakUQjnJ8pdd_)  bot ensures trades are executed for the real-time price or better by utilizing a price checker, such as a Uniswap v3 pool. Instead of setting a slippage tolerance, DAOs can utilize Milkman to determine a maximum percentage deviation from a price checker, guaranteeing that their trade will finalize at a fair market price. If a trade can’t be executed within the defined price window or better, the order is postponed until the market shifts within the set range.
-   **Dump Services**: CoW Swap and  [yearn.fi](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Fyearnfi&sa=D&ust=1685041403338056&usg=AOvVaw0tRHH_iWJYOanV9u0bOifG)  have collaborated on  [Dump.services](https://www.google.com/url?q=https%3A%2F%2Fdump.services%2F&sa=D&ust=1685041403338225&usg=AOvVaw2pXYXEjLIkryn0N8oT1xV-), a tool that allows traders to sell (dump) multiple tokens from a wallet in a single transaction

What’s more: CoW Swap’s ERC-1271 support allows DAOs to  [create any special order type they would like and use CoW Swap to execute it](https://www.google.com/url?q=https%3A%2F%2Fcow-protocol.medium.com%2Ftutorial-creating-smart-orders-on-cow-protocol-683a5f9f4763&sa=D&ust=1685041403338647&usg=AOvVaw1NaprSNyxDuDV-a7rDyhR5).

## CoW Swap: The Best DEX for DAOs & Multi-Sigs

CoW Swap’s obsession with providing the best trade execution has earned the platform the loyalty of some of the largest DAOs and projects in web3 today — including ENS DAO, who  [received an $80k surplus for a $16.5 million trade on CoW Swap](https://www.google.com/url?q=https%3A%2F%2Fwww.theblock.co%2Fpost%2F209222%2Fens-dao-votes-to-sell-16-5-million-of-eth-for-usdc-via-cow-swap&sa=D&ust=1685041403339194&usg=AOvVaw3ZT8FWqfkzrTuVne3jTPAq).

![3-cow-swap-best-dex.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_cow_swap_best_dex_1341750c1f.webp)

[GnosisDAO](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FGnosisDAO&sa=D&ust=1685041403339535&usg=AOvVaw2KdD9CG-9Hqw-VgxS-Wf-U),  [ENS DAO](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Fensdomains&sa=D&ust=1685041403339709&usg=AOvVaw37h4EyPo2Oa3sNhJTfq-ib),  [dxDao](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FDXdao_&sa=D&ust=1685041403339880&usg=AOvVaw0RRaXCUBeoW9lP3-8KCOlS),  [Yearn Finance](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Fyearnfi&sa=D&ust=1685041403340050&usg=AOvVaw3vF-CQXjeNmHZLoG8GXqC5),  [Safe](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Fsafe&sa=D&ust=1685041403340207&usg=AOvVaw0Xn8wJEuhgODhR7LNNEtTE),  [Frax](https://www.google.com/url?q=https%3A%2F%2Ffrax.finance%2F&sa=D&ust=1685041403340361&usg=AOvVaw1vM8In7BosL_x3_96QCxNd),  [Olympus DAO](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FOlympusDAO&sa=D&ust=1685041403340522&usg=AOvVaw3KxzCmAUO7qKjSXXRiMFhr),  [Synthetix](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Fsynthetix_io&sa=D&ust=1685041403340682&usg=AOvVaw2rhjkW_VWsk5kN18nXMWjL),  [Balancer](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FBalancer&sa=D&ust=1685041403340879&usg=AOvVaw0qx7dZnQ1wS9_FjBl6yNbU),  [Aura](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FAuraFinance&sa=D&ust=1685041403341064&usg=AOvVaw2GydDVXvBxVz9K1Ug_6adw),  [Gnosis Guild](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FGnosisGuild&sa=D&ust=1685041403341225&usg=AOvVaw3z7NSFqmSVlxcFuvyAanrg),  [Badger DAO](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FBadgerDAO&sa=D&ust=1685041403341383&usg=AOvVaw3LPAvlq6uuoiVxjpsLhXNY),  [Aave](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FAaveAave&sa=D&ust=1685041403341539&usg=AOvVaw1TpZZUKHQPc9mA-g_aESsz),  [Tally DAO](https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Ftallyxyz&sa=D&ust=1685041403341695&usg=AOvVaw2PhOKqGRwu8B3z8kyzo0Eb)  and  [Karpatkey](https://twitter.com/karpatkey).

All trades, whether for DAOs or retail traders, will usually receive better prices on CoW Swap than on individual liquidity pools or DEX aggregators. DAOs can count on CoW Swap for:

-   Easy trade timing with less pressure for stakeholders to coordinate
-   MEV-protected trades even when trade details are publicly announced
-   The best prices through slippage-capturing trade execution
-   Special order types custom-tailored for DAOs

**If you are a DAO interested in learning more about how CoW Swap can optimize your trades,** [**join our Discord**](https://www.google.com/url?q=https%3A%2F%2Fdiscord.com%2Finvite%2Fcowprotocol&sa=D&ust=1685041403342608&usg=AOvVaw2H2w662pRhWywMr1iewDqq) **and give us a shout, or leave a comment in our** [**forum**](https://www.google.com/url?q=https%3A%2F%2Fforum.cow.fi%2F&sa=D&ust=1685041403342786&usg=AOvVaw3elEWASQu1sxf3wVDPf9tS)**.**

## About CoW DAO

CoW DAO is an open organization of developers, traders, market makers and many more community members aligned with its vision. CoW DAO is focused on fair and decentralized trading systems — in particular, building, maintaining and advancing the CoW Protocol. CoW Protocol technology powers a network of traders and solvers, enabling trustless and efficient peer-to-peer trading. Leveraging batch auctions as a key concept uniquely positions CoW Protocol as native trading infrastructure for discrete-time settlement layers like Ethereum and enables fair and accessible trading to its users.

🐦 [Twitter](https://twitter.com/CoWSwap)| 📒 [Documentation](https://docs.cow.fi/)| 💬  [Forum](https://forum.cow.fi/)  | 📊  [Analytics](https://dune.com/cowprotocol)  | 📸 [Snapshot](https://snapshot.org/#/cow.eth)

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One-third of all DAO trading volume goes through CoW Swap


CoW Swap for DAOs

MEV or “maximal extractable value” is a hidden tax on all types of Ethereum transactions. Any time you make a DeFi trade, buy or sell an NFT, or lend tokens to a liquidity pool, opportunistic users known as “searchers” may manipulate your trades, resulting in unfavorable prices, failed transactions, and missed opportunities.

To date, MEV has been responsible for more than $1.3 billion in lost value for Ethereum users.

![1-mev-cumulative-gross-profit.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_mev_cumulative_gross_profit_cdc8935d2a.webp)

[_MEV Cumulative Gross Profit_](https://dune.com/queries/2259793/3703605)

In this article, we will take a deep dive into the problem of MEV and explore some potential solutions, including those offered by CoW Swap.

## Understanding MEV

When it comes to DEX trading, there are three main types of MEV attacks that searchers use to take advantage of your trading orders:

-   **Frontrunning**: Searchers submit a transaction similar to yours and place it before you in the block. Their transaction then executes first and they get to keep your profits for themselves, while your transaction fails
-   **Backrunning**: Any time you make a large trade, it leaves behind a price impact. If your trade is large enough, this price impact may move the market enough to open an arbitrage opportunity. Searchers can “backrun” your trades by placing their own trades directly after yours and profiting from this leftover arbitrage. Backrunning is generally viewed as a less-harmful type of MEV since it doesn’t affect the main transaction, it simply captures leftover arbitrage
-   **Sandwich attacks**: Sandwich attacks combine both frontrunning and backrunning into the worst kind of MEV attack. In a sandwich attack, searchers first ratchet up the price for your trade up to your slippage tolerance by frontrunning your transaction. Once your transaction clears, searches make a second trade in the opposite direction that cleans up any profits from the price change your trade causes

MEV is possible because validators are free to order blockchain transactions as they see fit in order to maximize their profits. Proof-of-stake (PoS) blockchains such as Ethereum use parties known as “validators” in order to ensure that the consensus rules of the blockchain are followed by all participants. Validators get randomly selected to add the next block to the blockchain. In this process, they determine what transactions are included in the block, and in what order.

When you submit a transaction on Ethereum, it does not immediately get added to the next block. Instead, it first goes into the “mempool” which is the collection of all pending transactions. Validators then pull transactions from the mempool and add them to the next block when it’s time for it to be built.

Here is where the opportunity to extract value through MEV comes in.

Validators are not required to add transactions to the block in the same order that they were submitted by users, so searchers can pay validators a fee to order transactions in a specific way. For example, they can pay to have their transactions come first if they want to frontrun someone else, or they can pay to have their transactions come right after a specific transaction if they want to perform a backrun.

![2-flow-of-an-Ethereum-transaction.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_flow_of_an_Ethereum_transaction_3ac014b14d.webp)

_The flow of an Ethereum transaction_

## Is MEV inevitable?

MEV is a complex and controversial topic in the Ethereum community.

Some say that MEV is a natural part of the Ethereum market mechanism and it helps to find the most efficient prices. Others believe that MEV can be harmful, but only if it’s concentrated in the hands of a few validators — therefore they work to “democratize” MEV and allow anyone to extract value from on-chain transactions.

At CoW Swap, we believe that all MEV is harmful to all traders, especially beginners who may not even be aware that they are getting shortchanged on their trades. This is why the protocol is designed to protect user trades from all types of MEV attacks.

## Strategies for Protecting Against MEV

CoW Swap gives traders the tools they need to protect themselves from MEV, so when you’re trading through  [https://swap.cow.fi/](https://swap.cow.fi/)  you’re protected from the majority of opportunistic searchers, regardless of the size or type of trade.

CoW Swap relies on 3 main features to keep you safe from MEV:

1.  Delegated Trade Execution
2.  Coincidence of Wants
3.  Uniform Clearing Prices

Let’s dive in!

### Delegated Trade Execution

On CoW Swap, all transactions are routed through a decentralized network of “solvers” — independent algorithms that are responsible for finding the best execution price for your trades.

When you submit a trade on CoW Swap, rather than initiating a blockchain transaction like you would on a platform like Uniswap, you instead submit a signed “intent to trade” message. This means that CoW Swap can perform optimizations on your trade that would not be possible if you submitted the transaction directly to the blockchain. These optimizations include finding Coincidences of Wants, adjusting the slippage tolerance dynamically, and completing your trade at an optimal price during the time of execution.

Since it is the solvers who execute your trade on your behalf, you are never directly exposed to the public mempool, meaning that you are protected from MEV at all times.

Whatever price solvers quote you at the time you place your order is actually the worst price that your order will be executed at (it may complete at a better price if solvers find a better execution path). All risk of MEV is taken on by the solver itself.

### Coincidence of Wants

CoW Swap’s delegated trade execution mechanism has another major advantage — it can match your orders off-chain.

Any time you submit a trade on CoW Swap, solvers start looking for the best way to execute it. Before checking on-chain liquidity, solvers check other incoming orders on CoW Swap’s current batch auction to see if your trades can be matched peer-to-peer.

Here’s how it works:

Let’s say you’re looking to trade ETH for USDC. You submit your order and solvers see that someone else in that batch is actually looking to trade USDC for ETH — the opposite of your trade — at the same time. These two trades will be matched with each other in a “Coincidence of Wants” (CoW) which allows traders to swap their assets with each other directly (one to one or many to many), thereby saving on gas fees, liquidity provider fees, price impact, and also bypassing MEV risks.

CoW Swap’s founders were inspired by the potential for Coincidence of Wants to provide lower prices for everyday Ethereum users (it’s in the name!). This mechanism is one of the cheapest and most secure ways to make a DeFi trade, and since you’re not using on-chain liquidity pools, your Coincidence of Wants trade cannot be subject to MEV attacks.

### Uniform Clearing Prices

As a third line of defense against MEV, CoW Swap ensures all orders complete under a “Uniform Clearing Price” (UCP).

Upon submitting your trade, your order gets included in a batch auction alongside other pending orders in the queue. All of the orders within a batch trade for the same price on the blockchain, a phenomenon referred to as “Uniform Clearing Price” (UCP).

To understand how UCP works on CoW Swap, we first have to consider how DeFi trading works on traditional DEXs. On a normal decentralized exchange, if 8 people want to trade ETH for USDC, each of their trades clears at a slightly different price since DEXs process trades in a sequential manner even though they might be happening concurrently (within the same Ethereum block). This leaves room for MEV because the order in which transactions are processed heavily impacts the prices that users get. Searchers are constantly monitoring DEX trades, looking for opportunities like these where they can reorder transactions to their advantage.

On CoW Swap, if the same 8 people are making that trade, as long as they are in the same batch auction, each order will be settled for the same clearing price when it goes on-chain. This leaves no room for MEV attacks since all prices are the same, meaning that transaction ordering becomes irrelevant.

## Getting Started with CoW Swap

CoW Swap was built from the ground up with MEV protection in mind.

Whether you’re a beginner or a seasoned trader, CoW Swap ensures a fair trading experience that protects you from price exploitation. Give it a shot for your next trade at  [https://swap.cow.fi/#/swap](https://swap.cow.fi/#/swap)


CoW Swap is a meta-DEX aggregator that provides users with the best trading prices out of all AMMs and DEX aggregators. An important part of guaranteeing these prices is CoW Swap’s MEV protection, which we explore in this article.


How CoW Swap solves the MEV problem

## TL;DR

-   For the month of  **April**, CoW Protocol handled a volume of  **$982M**, with a total of  **$5.9M** in generated surplus**.**
-   In exciting news, CoW Protocol launched MEV Blocker and partially fillable limit orders, celebrated its 2nd anniversary, and more 🙂

## Protocol Stats

Over month, CoW Protocol settled a total of  **$982M**

![1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_protocol_stats_64433ed928.webp)

This month, the top 3 batches to highlight are the following:

-   **Batch with the highest % of CoW trades (**[**Transaction details**](https://explorer.cow.fi/tx/0x8477144e2384367e21c2553e7df392caa736cee652d54f245f96472b6a5c0bce?tab=graph)**):**  The Batch Total volume was  **$16,771.65**, and it was created by three traders, in which two were perfectly CoWed for  **100**% of their volume. One trader was buying  **4 ETH** for **10B PEPE**, the other trader was selling  **4 ETH** for **10B PEPE**, while the non cow trader was selling  **0.2 ETH** for  **699M PEPE.**

![1-1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_protocol_stats_f3fdfa181c.webp)

-   **Batch with the highest volume in it** [**(Transaction details)**](https://explorer.cow.fi/tx/0x19ad3f4535beb8a045411ea5cdd9bf5cb16482b2cc7b6c688d2864ec4dbf6816?tab=orders)**:**  The Batch Total volume was  **$21,948,438.66M** and it was created by a single trader who swapped  **WETH-stETH**

![1-2-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_protocol_stats_55cb058471.webp)

-   **Batch with the highest amount of surplus (**[**Transaction details**](https://explorer.cow.fi/tx/0xe9728134f50424b69042b61ac04bc86417be87e4499dc3e383a47aad0855952e?tab=graph)**)**: The Batch Total volume was $**6M** and it was created by two traders who were both swapping  **WETH**  to  **USDT**. Together, the two traders achieved the largest surplus for the month of  **April**, by getting $124,288.12 (**1.72**% surplus) extra.

![1-3-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_protocol_stats_39cc8bcd9c.webp)

During the month of  **April**, the top 10 traders traded a total of  **$171M**

![1-4-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_protocol_stats_a2d30ec441.webp)

In the table below you can see the # of trades that CoW Swap traders have executed as well as the total volume for all trades. Our most active trader made a whopping 4,075 trades with CoW Protocol in  **April**.

![1-5-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_protocol_stats_9875e06ced.webp)

## Solvers

In  **April**, no new external solvers were added.

![2-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_solvers_d221b280d6.webp)

You can find all of the Solver Statistics in the following table. Looking at this table, we can see that on average, for the month of  **April**  solvers were able to generate a total of  **$5.9M**  — which means money in the pockets of traders. The highest surplus generated by a solver was  **$1.89M,** generated by the barter solver.

![2-1-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_solvers_ec8a9f8c08.webp)

## Governance

It has been a quiet month in terms of governance! The CoW was just chilling.

### Executed Proposals

This month, no proposals were executed.

### Technical Discussions

As an “agora” for technical topics on batch auctions or CoW Protocol related topics, very interesting posts have surfaced in the forum during the month of  **April**.

1.  [Report on the first two weeks of CIP-20](https://forum.cow.fi/t/report-on-the-first-two-weeks-of-cip-20/1630)

Make sure to read them and leave comments, as your feedback is much appreciated and will help move forward these important topics. If you are interested in submitting a proposal to the CoW DAO, make sure to follow the following  [template](https://forum.cow.fi/t/cip-0-template/28).

## CoWmunity News

-   Launched a new token for all the CoW lovers, welcome to the new  [USDC (Unified Simple Dairy Coin)](https://twitter.com/CoWSwap/status/1642183629286637570?s=20)
-   CoW Protocol was highlighted in the latest Consensys Mesh  [report](https://twitter.com/CoWSwap/status/1643250373421932544?s=20)
-   Launched  [MEV Blocker](https://twitter.com/CoWSwap/status/1643614395002499073?s=20)  alongside GnosisDAO and Agnostic Relayer. Covered in [The Block](https://www.theblock.co/post/225023/ethereum-projects-come-together-on-mev-blocker-rpc-launch-to-share-profits-with-users),  [The Defiant](https://thedefiant.io/mev-blocker-rpc-lets-users-profit-mev),  [Coindesk](https://www.coindesk.com/tech/2023/04/05/mev-blocker-wants-to-help-you-outrun-the-frontrunners/),  [Cointelegraph](https://cointelegraph.com/news/ethereum-projects-unite-to-protect-users-from-mev-induced-high-prices),  [News coincu,](https://news.coincu.com/178822-mev-blocker-rpc-launched/) [Binance,](https://www.binance.com/en/feed/post/386631) [BeInCrypto](https://beincrypto.com/cow-swap-balancer-1inch-and-other-ethereum-projects-unite-to-shield-network-from-mev/),  [Cryptonews](https://cryptonews.net/news/blokcheyn/20768281/),  [Coinmarketcal](https://coinmarketcal.com/en/news/ethereum-projects-come-together-on-mev-blocker-rpc-launch-to-share-profits-with-users),  [Blockchain news](https://blockchain.news/news/ethereum-projects-launch-mev-blocker-to-minimize-invisible-tax),  [Coinpage](https://coingape.com/30-ethereum-apps-united-to-launch-defi-solution/),  [MSN](https://www.msn.com/en-us/money/other/mev-blocker-wants-to-help-you-outrun-the-frontrunners/ar-AA19vDRa)
-   Launched  [partially fillable limit orders](https://twitter.com/CoWSwap/status/1647962760070803457?s=20)

-   Coordinated the launch of the  [Zeromev API](https://twitter.com/CoWSwap/status/1648688114733568001?s=20)  funded by the CoW Grants Program with the aim of helping users better understand how much they have lost to MEV when not trading on CoW Swap
-   Re-launched the weekly  [Solver rewards analysis](https://twitter.com/CoWSwap/status/1649090216815382529?s=20)
-   CoW Swap made several  [UI improvements](https://twitter.com/CoWSwap/status/1650583685304025089?s=20): get notified about your order surplus, connect directly with more wallets: [@ledger](https://twitter.com/Ledger), [@KeystoneWallet](https://twitter.com/KeystoneWallet), [@TrustWallet](https://twitter.com/TrustWallet), cancel multiple limit orders at once, and cancel orders on-chain
-   Added support for  [Ambire wallet](https://twitter.com/CoWSwap/status/1651210318880833536?s=20)
-   Started performing  [TWAP UI research](https://twitter.com/CoWSwap/status/1651232221825490951?s=20)
-   Celebrated CoW Swap’s  [2 year anniversary](https://twitter.com/CoWSwap/status/1651889055683211264?s=20)

## Product Updates

**Backend**

The backend team has been working hard to improve the product infrastructure. In  **April**, we:

-   Released support for partially fillable limit orders
-   Worked on the CoW cluster migration
-   Made progress on resolving the remaining issues with partially fillable limit orders
-   Worked on improvements for the Solver reward script
-   Created different alerts for transfers from the settlement contract; goal is to detect which approval led to the transfer
-   Evaluated NPM contracts repo for Ethers.js v6
-   Drafted a PR for CIP-20 for driver co-location
-   Planned Q2 features
-   Fixed issues related to the handling of 0x API rate limiting

**Frontend**

The frontend team has been pushing hard for several improvements on the UI, as well as the overall UI infrastructure. In  **April**, we:

-   Released 🚀 MEV Blocker & a few small reiterations (Connect! ⛓️)
-   Released the official new version of SDK v2.0 📦
-   Released a new trick in the UI: search of tokens outside of our own lists 🕵️Uniswap tokens will be used as an external source 🦄
-   Released an improvement suggested by vitalik.eth (yes, the one! 🐐) about swap recipients
-   Released Limit Order reiteration 📈
-   Released CoW Swap 1.33: 🎉 which introduced partially fillable limit orders to CoW Swap
-   Released CoW Swap 1.34: 🎉 which provides support for several new wallets: Ledger, Keystone, Trust, as well as a new design for the connect modal (smaller icons to accommodate the new wallets). The update also enabled hard cancellations (on-chain rather than off-chain) and multiple order cancellations (one signature), as well as a new feature that shows any order surplus in a notification.
-   Formed a roadmap for Q2
-   Added FAQ for new features (hard cancellation, multiple cancellations)
-   Released a CowSwap birthday theme

## Open Job Positions

CoW Protocol team is currently NOT looking to hire :(


CoW Protocol April 2023 Highlights

On April 28th, 2021, CoW Swap was publicly announced and deployed to Ethereum mainnet as a proof of concept to showcase the power behind its underlying mechanism, CoW Protocol.

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">CowSwap is live!<br>👉 <a href="https://t.co/16jaKW2324">https://t.co/16jaKW2324</a><br> <br>Check out how CoWs protect your trades from <a href="https://twitter.com/hashtag/MEV?src=hash&amp;ref_src=twsrc%5Etfw">#MEV</a> and save 90% of gas costs on your trades👇 <a href="https://t.co/FK9NBlLLUn">pic.twitter.com/FK9NBlLLUn</a></p>&mdash; CoW DAO | CoW Swap &amp; MEV Blocker (@CoWSwap) <a href="https://twitter.com/CoWSwap/status/1387392829731770375?ref_src=twsrc%5Etfw">April 28, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

One year later, we made this post:

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">🐮🎉 Today is CowSwap&#39;s birthday &amp; we would love to celebrate with you!!🐮🎉<br><br>If you trade on CowSwap today, you&#39;ll be able to find a special birthday gift!<a href="https://twitter.com/hashtag/CoWGMI?src=hash&amp;ref_src=twsrc%5Etfw">#CoWGMI</a><br><br>For this amazing year, we put together a nice summary of key moments &amp; stats achieved:<a href="https://t.co/f3RuLdS3Bi">https://t.co/f3RuLdS3Bi</a></p>&mdash; CoW DAO | CoW Swap &amp; MEV Blocker (@CoWSwap) <a href="https://twitter.com/CoWSwap/status/1519682333103861761?ref_src=twsrc%5Etfw">April 28, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

For many people, this was the first time they heard of the project. Little did they know that with just one swap, it would become their favorite #DEX across Ethereum & Gnosis Chain. CowSwap’s main goal has always been to protect users from MEV attacks (frontrunning, sandwiching and more) through the use of a batch auction settlement layer. Here’s a summary of everything CoW Swap has launched and accomplished so far:

-   **April 28th, 2021 →**  CowSwap is born and rolls out in production, v.1.0
-   **August 13th, 2021 →**  CowSwap moves out of Alpha (Proof of Concept) and launches its upgraded smart contract to tightly integrate with Balancer v2. Composability is the key to Balancer CoW Protocol, where Balancer routes trades directly to CoW Protocol, and CoW Protocol settles trades in Balancer pools more efficiently.
-   **February 4th, 2022 →**  vCOW tokens land on CowSwap, later followed by COW tokens.
-   **February 11th, 2022 →**  CoW DAO is born!
-   **February 17th, 2022 →**  The CoW Investors Guild launches with an astonishing NFT.
-   **March 7th, 2022 →**The First proposal is passed by vCOW token holders, CoW DAO’s participation agreement.
-   **March 29th, 2022 →**  CoWDAO closes a $23M private & CoWmunity investment round. The investment round contains 57 participants from the private round (VCs, Angel Investors, etc) & > 5000 CoWmunity participants.
-   **April 22nd, 2022 →**  CoW-organizes the first mev.day in for Devconnect Amsterdam.
-   **April 28th, 2022 →**  CoW Swap´s 1st birthday.
-   **June 8th, 2022 →**  The CoW Grants program goes live.
-   **July 14th, 2022 →**  CoW Protocols Monthly recaps are born. Subsequently, each month’s news, developments, governance discussions and more are compiled into a newsletter-style article.
-   **September 29th, 2022 →**  CoW Swap´s Token page goes live, users can now mark their favorite tokens and approve them whenever they find convenient, regardless of the actual trading timing.
-   **October 12th, 2022 →**  CoW Protocol team takes over DEVCON VI in Bogota with 4 different talks!!
-   **October 28th, 2022 →**  Data analysis on how much slippage DEX Aggregator users suffer. Do CoWs experience less slippage? Indeed they do :)
-   **November 2nd, 2022 →** CoW Protocol launches support for ERC-1271 signatures. ERC-1271 makes it possible to trade “gas-less-ly” on CoW Protocol with any Smart Contract or Smart Contract wallet.
-   **November 7th, 2022 →**  A new AMM concept is introduced. CoW Native AMMs (aka Surplus Capturing AMMs with single price clearing) protect their LPs from MEV, get less LVR and provide lower fees to traders.
-   **November 16th, 2022 →**  CoW Protocol proudly announces the launch of Seasolver from [@iearnfinance](https://twitter.com/iearnfinance), the leading yield aggregator on Ethereum. This is one of the most novel applications of a solver to date — enabling direct trading of LP positions.
-   **November 22nd, 2022 →**  A partnership with [@ChainPatrol](https://twitter.com/ChainPatrol)  to help identify scammers is launched alongside security portal for users to easily report those F****rs
-   **November 22nd, 2022 →**  Swapr integrates CoW Protocol into its Eco Router.
-   **December 6th, 2022 →** Shapeshift integrates CoW Protocol and routes all orders in Ethereum to the CoWs!!
-   **December 8th, 2022 →**  Significant updates to the CoW Swap UI go live through a new brand refresh :)
-   **December 12th, 2022 →**  The most UN-limited limit orders in DeFi launch. Limit orders from CoW Protocol officially go live
-   **December 19th, 2022 →**  A new contract that allows users to trade directly with ETH or xDAI without having to wrap first launches.
-   **January 6th, 2023 →**  A Smart Order tutorial for users to easily create any sort of financial product through EIP1271 orders launches.
-   **January 25th, 2023 →**  CoW DAO holders approve the hiring of a treasury manager, and retain Karpatkey as the provider for the service..
-   **February 8th, 2023 →** ENS sells $16m worth of ETH (10K) through smart orders without suffering from any MEV, despite revealing their trade intent a week in advance through a DAO vote. A first for DeFi!
-   **February 24th, 2023 →**  With the help of Wherever, CoW Swap launches wallet to wallet notifications, so that users can stay up to date on the latest news.
-   **March 8th, 2023 →**  First implementation of TWAP orders goes live thanks to the CoW Grants program.
-   **March 30th, 2023 →**  CoW Swap launches a new traffic light system to help you understand how close your limit order price is to executing.
-   **April 5th, 2023 →**  CoW Swap, in collaboration with [@beaverbuild](https://twitter.com/beaverbuild)  and Agnostic Relayer, proudly announces MEV Blocker [https://MEVBlocker.io](https://t.co/WIhaaGtP0e). MEV Blocker is a free RPC endpoint that *pays users* to protect themselves from MEV across a wide variety of use cases in DeFi, NFTs, and dApps.
-   **April 17th, 2023 →**  Partially fillable limit orders launch. Enabled by default, partial fills bring faster trade settlement to limit orders.
-   **April 19th, 2023 →**  An API with Zeromev launches that allows users to understand and quantify how much they have lost to MEV. This initiative was funded via the CoW Grants program.

It’s been our honor to share these last two years with the incredible CoWmmunity! Below we’ve included some notable statistics from this period that are worth highlighting.

## Main Protocol Statistics

Total Volume: $23.39 Billion

![1-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_main_protocol_statistics_bc3c675e41.webp)

Total # of Trades: 595,373

![1-1-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_main_protocol_statistics_9b61f3c308.webp)

Total # of Users:

![1-2-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_main_protocol_statistics_5f263b9c71.webp)

Total number of distinct tokens traded: 3,640 tokens

![1-3-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_main_protocol_statistics_ac95679b1f.webp)

Total number of batches settled: 449K

![1-4-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_main_protocol_statistics_f0ddc1b685.webp)

Top 25 traded tokens:

![1-5-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_main_protocol_statistics_135cd104d4.webp)

Number of currently active solvers:

![1-6-main-protocol-statistics.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_6_main_protocol_statistics_e4d423faf8.webp)

## **User Benefits**

Due to the delegated trading model of CoW Swap, users have been able to save a cumulative total of 7K ETH, which is worth $19.5M at current prices!!!

![2-user-benefits.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_user_benefits_6f908ce630.webp)

But the savings don’t stop there — not by a long shot… CoW Swap has provided its users with an astonishing $119 million in trade surplus. This is $119 million more than they originally signed up for when submitting their trades!

![2-1-user-benefits.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_user_benefits_ff60a40b28.webp)

## Top 3 Batch highlights

**[Batch with the largest volume](https://explorer.cow.fi/tx/0x67b9ee6d6d6a96c56ae689c71a588dd1739d98ed4b542b513b7f8896916fd6ee?tab=orders)**

5 different traders selling and buying DAI — USDC, USDC — ICHI, NOTE — DAI, USDC — wNXM and MIM — RDN who all together accounted for a total batch volume of $90,698,916.42, which is an impressive figure!

![3-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_batch_highlights_81a67ec8fe.webp)
![3-1-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_1_batch_highlights_4793fd97bf.webp)

**[Batch with the largest amount of traders](https://barn.explorer.cow.fi/tx/0x0191dbb560e936bd3320d5a505c9c05580a0ebb7e12fe117551ac26e484f295e?tab=orders)**

34 different traders selling and buying ETH — GNO — perfectly batched together to hit the AMM with the best price only once, thus making the 34 trades much more gas cost efficient.

![3-2-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_2_batch_highlights_65f48706b4.webp)
![3-3-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_3_batch_highlights_ce078b6789.webp)

**[Most beautiful CoW](https://explorer.cow.fi/tx/0x4769c7e1bfc28fa2b0648cd450b90c6ae0c73664b9c398a408560cc997981700?tab=orders)**

6 different traders selling and buying USDT — USDT, perfectly matched >$1m against each other with >99% CoW volume (coincidence of wants/ internal matching) generating nice surplus for all

![3-4-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_4_batch_highlights_a190b73ae7.webp)
![3-5-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_5_batch_highlights_483d65732e.webp)

**[Batch with highest surplus](https://explorer.cow.fi/tx/0xdfe24cc3fbf5b15ed356829dc9b756844aa64fdb90bd06ed6c55119b0c7a465d?tab=orders)**

A single trader selling and buying USDC — USDT received a surplus of 4% thanks to CoW Protocol’s batch auction settlement mechanism. In their trade, this translated to around $ 400K

![3-6-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_6_batch_highlights_1ddcdb11c6.webp)
![3-7-batch-highlights.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_7_batch_highlights_f2bc0ad9ac.webp)

## Conclusion

We can’t believe you are growing so fast! It seems like it was just yesterday that you came into this world. CoW Swap was born with the goal of becoming the most MEV-resistant DEX. It is the only DEX designed to give you total peace of mind, reducing MEV value extraction as much as possible for you and batching your trades to save you gas and AMM fees. So what are you waiting for? Go trade on swap.cow.fi and help the protocol scale its benefits!

![4-conclusion.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_conclusion_3bd7e17b67.webp)

More trades → More CoWs → More protection from MEV → Better prices

May the years ahead continue to amaze everyone with the power of CoWs!!


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Holy CoW!! It’s CoW Swap’s birthday 🎂 Happy birthday to moooo, happy birthday to moooo 🎉🎊🥳


CoW Swap’s 2nd birthday celebration!

CoW Swap is excited to announce that partially fillable limit orders are now live.

Partially fillable limit orders, unlike traditional “fill or kill” limit orders, are executed gradually as liquidity becomes available at the specified limit price.  **This means that your limit orders will complete much faster, as they can gather liquidity over time rather than all at once.**

![1-limit-orders.gif](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_limit_orders_f887eeebcc.gif)

Let’s say you want to place a limit order for $10,000 worth of ETH at a price of $1,500 per ETH. With fill or kill limit orders, this trade would only be executed if CoW Swap can find the entire $10,000 worth of ETH at $1,500 per token. If this liquidity is not available in full, the order would not go through.

With partially fillable limit orders, however, the same trade can be executed in smaller increments over time. For example, if there were only $1,000 worth of liquidity for ETH at a limit price of $1,500 when you first place your order, CoW Swap would execute a trade to capture that $1,000 and also execute subsequent trades that it finds at your limit price until the entire $10,000 order is filled.

Partially fillable limit orders have several benefits:

-   Fast order fills regardless of market conditions
-   Increased chance of CoWs (Coincidences of Wants)
-   Surplus capturing trades

Let’s explore how each benefit improves your trading experience.

### Fast Order Fills Regardless of Market Conditions

The main advantage of partially fillable limit orders is that your trades will execute (at least in part) even during times of low market liquidity.

Fill or kill limit orders can take a long time to execute, since there needs to be enough liquidity available to execute the entirety of your trade at your limit price. This issue is solved with partially fillable limit orders, so you can always expect fast, efficient order completion regardless of market conditions.

### Increased Chance of CoWs

CoW Swap was built on the concept of “Coincidences of Wants” (CoWs) — an economic phenomenon where two or more traders can swap assets with each other peer-to-peer, without needing to use on-chain liquidity. On CoW Swap, orders are processed in batches that make this peer-to-peer matching possible.

Since partially fillable orders fill up over time, rather than all at once, they get more chances to be matched with other orders in a CoW. This, in turn, means that you get reduced gas fees and zero liquidity pool fees.

For example, if you are attempting to make a $10,000 trade, a traditional fill or kill order will be sent to a single batch and only get 1 chance to find a CoW (which may be unlikely for a large order.) With partially fillable orders, your order could participate in all batch auctions and get a chance to find multiple CoWs against a bunch of smaller orders until the order is filled.

### Surplus Capturing Trades

Partially fillable limit orders are “surplus capturing,” meaning that any price surplus your trade experiences will get passed along to you. If you submit a trade at a certain limit price, but it can actually be executed for less, the protocol will make the trade for the lower price and pass the savings on to you.

For example, if you set a limit order for ETH at $1,500, but the protocol sees that there is actually an opportunity to buy ETH for $1,450, it will buy at this price and pass the $50 in “surplus” on to you.

In practice, surplus capturing orders mean that CoW Swap will find enough surplus (price improvements) at the time of execution to cover what will be your fees so that they don’t affect your orders’ limit price.

## Uses for Partially Fillable Limit Orders

Partially fillable orders have many advantages for one-off transactions and everyday retail traders, but they really shine when put to work as a part of a broader strategy.

Here are some trading strategies that work well with partially fillable orders:

-   **Buybacks for DAOs**: Partially fillable orders provide great benefits for DAO treasury management. Imagine that a DAO wants to perform a large buyback of its token at a certain price. Rather than having to coordinate with multiple stakeholders (such as multiple investors who may want to sell the token) and time the market perfectly, these DAOs can simply set a partially fillable limit order to buy their token for a certain price and buy tokens from the market as liquidity at a favorable price becomes available.
-   **Buy & Sell Walls**: Partially fillable limit orders can be used to set buy & sell “walls” for continuous trades. For example, a trader can submit a partially fillable order that is set to purchase ETH any time it drops below a certain price and sell it any time it goes above a certain price.  
    This is a beneficial use-case for projects that have launched or are launching a token. The nature of token launches makes it hard to predict how the token price will behave initially — something that has a deep impact on the public perception of the project. With partially fillable limit orders, projects can strategically buy and sell their token to ensure that it doesn’t go outside of a certain price range.
-   **Stablecoin Arbitrage**: Stablecoins are a cornerstone of the crypto industry. For most use-cases, stablecoins are reliably pegged to $1, but, on the micro-level, they are usually fluctuating by a few hundredths of a cent at all times.  
    Partially fillable limit orders can be used to capitalize on this arbitrage by setting a 1:1 trade order to swap between stablecoins (such as USDC and DAI). Since partially fillable limit orders on CoW Swap are surplus capturing, this trade will only execute when the price of the stablecoins moves such that there is enough surplus to cover fees. Often, this means that there is also enough surplus to make a profit, so traders may end up swapping $1,000 USDC, for example, for $1,050 DAI.  
    It’s important to keep in mind that this strategy is really only worthwhile when trading in large amounts. The volatility of stablecoin prices is usually so minimal that it takes rather large amounts of capital to make arbitrage worth it. Remember to Do Your Own Research.

## Get Started with Partially Fillable Limit Orders on CoW Swap

Partially fillable limit orders are now enabled by default for all limit orders on CoW Swap. If you’d like to disable partially fillable orders and go back to fill or kill orders, you can do so through a toggle in your trade settings.

As with all other order types on CoW Swap, partial fills:

-   Aggregate liquidity from the best prices available on-chain
-   Improve prices via Coincidence of Wants (peer-to-peer matching)
-   Protect users from MEV
-   Take fees in the sell token, not in ETH (unless you’re selling ETH!)
-   Don’t charge for failed transactions
-   Are free to place and free to cancel

Give partially fillable limit orders a try today and let us know what you think by reaching out on  [Twitter](https://twitter.com/CoWSwap)  or  [Discord](https://discord.com/invite/cowprotocol)!


large_cow-swap-improves-the-limit-order-experience-with-partially-fillable-limit-orders-cover-photo.webp

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Partial fills bring faster trade execution and increased chances of Coincidence of Wants to limit orders on CoW Swap


CoW Swap Improves the Limit Order Experience with Partially Fillable Limit Orders

## TL;DR

-   For the month of March, CoW Protocol has handled a volume of **$1.9B**, with the total amount of surplus generated for that month was  **$9.26M**.
-   In terms of Governance, CowDAO executed 1 CIP about the continued funding to No MEV labs for development services.
-   In regards to exciting news, CoW Protocol participated in the Safe Account Abstraction hackathon, gave an outstanding talk for DAOs in EthDenver, tested the first implementation of TWAP (time weighted average orders), gave a facelift to the limit orders UI and more :)

## Protocol Stats

Over this month, CoW Protocol has settled a total of  **$1.9B**

![1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_protocol_stats_9a0524efdf.webp)

This month, the top 3 batches to highlight are the following:

-   **Batch with the highest % of CoW trades (**[**Transaction details**](https://explorer.cow.fi/tx/0xe072122299a23d64b8159c70579387a67cb0cb6cc68a4567cdb2338730606541?tab=graph)**):**  The Batch Total volume was  **$2,030,226.68,**  and it was created by four traders who were perfectly CoWed for  **100**% of their volume. One trader was swapping $**950K of USDC-USDT**, another trader was swapping  **$1M USDT- USDC**, another trader was swapping  **$12K USDC-USDT**, while the other trader was swapping  **$40K USDC-USDT**

![1-1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_protocol_stats_f53691106f.webp)

-   **Batch with the highest volume in it (**[**Transaction details**](https://explorer.cow.fi/tx/0x325986462ce556186fbe9b6693d6ed7fd0ce2067d79bf557b168ec55740ad532?tab=graph)**):**  The Batch Total volume was  **$18,566,138.66** and it was created by two traders who were swapping  **USDC**  to  **DAI** and **USDC** to **DAI**.

![1-2-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_protocol_stats_66ab2d7583.webp)

-   **Batch with the highest amount of surplus (**[**Transaction details**](https://explorer.cow.fi/tx/0x4b4bd531476cb3fd6925e3f4ed22c1c5a4632029dde8aa589ccfa6635808945a?tab=graph)**):**  The Batch Total volume was  **$3,130,248.85** and it was created by a single trader who was swapping  **ETH**  to  **USDT**. This trader achieved the largest surplus for the month of  **$82,092.58**, by getting  **$81.6K**  extra, which at the time of trade was roughly **2.61% surplus**.

![1-3-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_protocol_stats_f91fe1fa71.webp)

During the month of March, the top 10 traders traded a total of  **$166M**

![1-4-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_protocol_stats_ce0d8b2f06.webp)

In the table below you can see the # of trades that CoW Swap traders have executed as well as the total volume for all trades. Our most active trader made a whopping 3410 trades with CoW Protocol in March.

![1-5-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_protocol_stats_57bb98d011.webp)

## Solvers

![2-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_solvers_16db7bceb0.webp)

You can find all of the Solver Statistics in the following table. Looking at this table, we can see that on average, for the month of March Solvers were able to generate a total of  **$9.26M**, which was money in the pockets of traders. The highest generated surplus by a solver was  **$1.8M**.

![2-1-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_solvers_fa3ac6510c.webp)

## Governance

It has been a hectic month in terms of governance! The CoW cannot be stopped by a bear at all 💪.

### Executed Proposals

This month we have had one important and impactful proposal executed:

-   ✅  [CIP-24 — Continued funding for development services — Service Agreement No 2](https://snapshot.org/#/cow.eth/proposal/0xfdbb09f2c4147be81e0873bc10644435dffae9e2ae3da41a70eaa810b46ee5a0)

### Draft Proposals

This month, there have been  **one**  new proposal asking for feedback before moving into the next phase, a final CIP, in their current form.

-   [CIP-24 — Continued funding for development services — Service Agreement No 2](https://forum.cow.fi/t/cip-24-continued-funding-for-development-services-service-agreement-no-2/1531)

### Technical Discussions

As an “agora” for technical topics on batch auctions or CoW Protocol related topics, very interesting posts surface throughout the month.

Make sure to read them and leave comments as your feedback is much appreciated and will help move forward these important topics. If you are interested in submitting a proposal to the CoW DAO, make sure to follow the following  [template](https://forum.cow.fi/t/cip-0-template/28).

## CoWmunity News

-   CoW Swap joined the safe team thematic month about  [account abstraction](https://twitter.com/safe/status/1630947082982027264?s=20), with the intention of having hackers build tools to abstract DAOs from the hassle of trading today.
-   The CoW team took over  [ETH Denver](https://twitter.com/CoWSwap/status/1631320669475725313?s=20)  with an amazing booth and the best swag in the conference.
-   Not only did the CoW Team take over Denver, but also  [Anna George](https://twitter.com/EthereumDenver/status/1632170012227117056?s=20), had a great  [talk about DeFi Experience for DAOs today](https://www.youtube.com/watch?v=kkVxMd03XEg&t=29s)
-   Worth highlighting that this month we had the attention of the one and only Vitalik not only by  [using CoW Swap](https://twitter.com/CoWSwap/status/1633072069972836354?s=20)  as his trading venue but also  [submitting PRs for UI improvements](https://twitter.com/CoWSwap/status/1641834935588737026?s=20).
-   While in Denver, CoW Grants Program continued to deliver! A new ERC1271 Smart contract order type just arrived,  [TWAP (Time Weighted Average Price) orders](https://twitter.com/CoWSwap/status/1633489764274806784?s=20)  are now possible through CoW Swap.
-   The most [beautiful CoW since launch](https://twitter.com/koeppelmann/status/1634675936082776069?s=20)  — 6 different traders selling and buying USDT — USDT, perfectly matched.
-   [Great example](https://twitter.com/CoWSwap/status/1637457413367382018?s=20)  of why limit orders from CoW Swap are structurally better for traders than limit orders from other DEXs — because they are surplus-capturing!
-   [Nexus mutual partnered with CoW Protocol](https://twitter.com/CoWSwap/status/1638530976857899009?s=20)  to have their insurance pools trade directly with CoW!
-   [CoW Swap limit orders just got a facelift!](https://twitter.com/CoWSwap/status/1641489384896704526?s=20)  You can now see a new traffic light system in your open orders panel, which shows how close your order is to executing.

## Product Updates

**Backend**

The backend team has been working hard to improve the product infrastructure. In March, we:

-   Worked on CIP-20 auction based solver rewards
-   Implemented colocation environment for Staging in Goerli Network
-   Fixed several issues related to solver and driver collocation
-   Created new testing harness for making writing E2E tests simpler
-   Added support for Balancer V2 in Gnosis Chain
-   Fixed small bug in mock HTTP server implementations to improve solvers
-   Fixed settlement merging bug for EthFlow orders

**Frontend**

The frontend team has been pushing hard for several improvements in the UI front, as well as the overall UI infrastructure. In March, we:

-   First round of improvements for Token lists automation  finished. Anyone should be capable of add/remove/update tokens and images to CoW Swap’s default token list
-   Added **s**everal more wallets that are coming to the UI
-   Worked on Limit orders re-iteration to show Est. Execution Price → when will my order be executed
-   Focused on the new RPC (mevblocker.io) endpoint landing page
-   Continued with the new wallets integration and refactoring of wallets code
-   Continued with the prices on limit-orders re-iteration
-   Started working on Partials Execution:  Limit Orders will become partially fillable (swaps will be Fill-Or-Kill → AON — All Or None)

## Open Job Positions

CoW Protocol team is currently NOT looking to hire :(


CoW Protocol March 2023 Highlights

## TL;DR

-   During the month of February, CoW Protocol handled a volume of **$1.01B**, with a total of  **$6M**  in generated surplus.
-   In terms of Governance, CowDAO executed 4 CIPS, new Solver rewards, Token Discounts renewals, barter Solver slashing due to exploit, and Solver rewards budget renewal.
-   In exciting news, had the biggest trade made by a DAO ever, with ENS trading  **$16M**  worth of ETH, also CoW DAO turned 1 year old, CoW Protocol had two open calls for feedback, and CoW Swap users can now enable wallet to wallet notifications to stay on top of all CoW-related news, and more :)

## Protocol Stats

Over the course of the month, CoW Protocol settled a total of $  **1.01 billion**

![1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_protocol_stats_2a148b2f33.webp)

This month, the 3 highlight batches are the following:

-   Batch with the highest % of CoW trades ([Transaction details](https://explorer.cow.fi/tx/0xde39a060fea94e02b3ac89ee312e6f6491f1e75c12be90aa38e9f743dff0752c?tab=graph)**)**. The Batch Total volume was **$202,310.39**, and it was created by two traders who were perfectly CoWed for  **97.4%**  of their volume. One trader was buying $**94.5K USDC**, while the other trader was selling $**100K USDC** .

![1-1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_protocol_stats_ead906e8c6.webp)

-   Batch with the highest volume ([Transaction details](https://explorer.cow.fi/tx/0xa2ba7939818d920aef9d1b2e1222d4df962ac30610367c0ec67c3a0fb3c5dbbc?tab=graph)**)**: The Batch Total volume was  **$16,336,549.02**  and it was created by two traders who were swapping  **DAI-ETH**  and  **WETH-USDC**.

![1-2-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_protocol_stats_52596c39fc.webp)

-   Batch with the highest amount of surplus ([Transaction details](https://explorer.cow.fi/tx/0xa2ba7939818d920aef9d1b2e1222d4df962ac30610367c0ec67c3a0fb3c5dbbc?tab=graph)**)**: The Batch Total volume was  **$16,336,549.02** and it was created by two traders who were swapping  **DAI-ETH**  and  **WETH-USDC**. One trader achieved the largest surplus for the month of $81,542.01, by getting $81K USDC extra, which at the time of trade was roughly  **0.5%**  surplus.

![1-3-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_protocol_stats_3509451367.webp)

During the month of February, the top 10 traders traded a total of  **$129M**

![1-4-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_protocol_stats_8877bc94be.webp)

In the table below you can see the number of trades that CoW Swap traders have executed, as well as the total volume for all trades. Our most active trader made a whopping 2889 trades with CoW Protocol in February.

![1-5-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_protocol_stats_c1d553b894.webp)

## Solvers

![2-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_solvers_1dc459e5a3.webp)

You can find all of the Solver Statistics in the following table. Looking at this table, we can see that on average, for the month of February, Solvers were able to generate a total of  **$6M**, which was money in the pockets of traders. The highest generated surplus by a Solver was  **$1.5M**.

![2-1-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_solvers_f408b09871.webp)

## Governance

It has been a hectic month in terms of governance! The CoW cannot be stopped by any bears 💪

### Executed Proposals

This month there were  **4**  proposals executed:

-   ✅  [CIP-20: Auction model for Solver rewards](https://snapshot.org/#/cow.eth/proposal/0x2d3f9bd1ea72dca84b03e97dda3efc1f4a42a772c54bd2037e8b62e7d09a491f)
-   ❌  [CIP-21: Renewing budget for COW token holders trading fee discount](https://snapshot.org/#/cow.eth/proposal/0xcb454f83ca52f00f4803216f8bf717281de3ade44496c8542708a93a5d8133e8)
-   ✅  [CIP-22: Slashing of the Barter Solver (responsible for a hack causing CoW DAO a loss of 1 week fee accrual)](https://snapshot.org/#/cow.eth/proposal/0x55f13a2bd5387e3df8d35444a377d72ac659d2000f7a7c8b662dc4fa93a54c75)
-   ✅  [CIP-23: Renewing the Solver reward budget](https://snapshot.org/#/cow.eth/proposal/0x864685d094312bc51eeb01af69e83dc7c496108cca54a15b491d79e9ce389889)

### Draft Proposals

This month, there have been  **4** new proposals asking for feedback before moving into the next phase, a final CIP, in their current form:

-   [CIP-20: Auction model for Solver rewards](https://forum.cow.fi/t/cip-20-auction-model-for-solver-rewards/1405)
-   [CIP-21: Renewing budget for COW token holders trading fee discount](https://forum.cow.fi/t/cip-21-renewing-budget-for-cow-token-holders-trading-fee-discount/1445)
-   [CIP-22: Slashing of the Barter Solver (responsible for a hack causing CoW DAO a loss of 1 week fee accrual)](https://forum.cow.fi/t/cip-22-slashing-of-the-barter-solver-responsible-for-a-hack-causing-cow-dao-a-loss-of-1-week-fee-accrual/1440)
-   [CIP-23: Renewing the Solver reward budget](https://forum.cow.fi/t/cip-23-renewing-the-solver-reward-budget/1444)

### Technical Discussions

Our forum serves as an “agora” for technical topics on batch auctions or CoW Protocol related topics, so check out some of the interesting posts that surfaced throughout the month.

Make sure to read them and leave comments as your feedback is very valuable and will help move forward these important topics. If you are interested in submitting a proposal to the CoW DAO, make sure to follow the following  [template](https://forum.cow.fi/t/cip-0-template/28).

## CoWmunity News

-   February was the month for feedback. CoW Swap had a call for  [DAO research](https://twitter.com/CoWSwap/status/1620800961513144321?s=20)  and  [Limit Orders](https://twitter.com/CoWSwap/status/1627670468923629568?s=20). Feedback is taken quite seriously at CoW Swap.
-   Unlike some other DEXes, CoW Swap provides only true volume.  [CoW Swap volume is 100% legit](https://twitter.com/CoWSwap/status/1621184351189835777?s=20)  and contains 0% volume coming from arbitrageurs.
-   CoW Swap took part in the  [Monday campaign](https://twitter.com/CoWSwap/status/1621584310188007424?s=20), alongside many other DeFi projects to voice our support for the DeFi values of the industry.
-   On February 7th 2023, CoW Swap’s settlement contract  [suffered a drain](https://twitter.com/CoWSwap/status/1622885833782054913?s=20)  whereby a hacker exploited an external Solver and used it to drain the settlement contract, which held 7 days worth of protocol fees.  [Here](https://twitter.com/CoWSwap/status/1623001754731180033?s=20)  you can read more about the full post mortem of the situation, and  [here](https://twitter.com/CoWSwap/status/1623061491283816448?s=20)  you can check the return of the stolen funds.
-   An  [@ensdomains](https://twitter.com/ensdomains)  [vote](https://twitter.com/CoWSwap/status/1623269956442898434?s=20)  to sell 10K worth of ETH through CoW Swap passed, and the  [$16M trade was executed](https://twitter.com/CoWSwap/status/1623680760522612738?s=20)  later that week with a total of $80K in surplus. In case you missed it,  [here is the twitter spaces](https://twitter.com/ENS_DAO/status/1625826547432148994?s=20)  held by CoW Swap and ENS recapping this exciting event.
-   February 11th was a day of celebration for us as  [CoW DAO Turned 1 year old](https://twitter.com/CoWSwap/status/1624381484995059712?s=20).
-   Celebrated  [CoW Valentines](https://twitter.com/CoWSwap/status/1625480198912196609?s=20)  day with our p2p lovers
-   February was also a month full of important governance decisions with  [four CIPs being voted](https://twitter.com/CoWSwap/status/1626570153138716673?s=20)  on.
-   You’ll now be able to receive  [CoW Swap notifications directly to your wallet](https://twitter.com/CoWSwap/status/1629121068777590785?s=20). CoW Swap has partnered with [@wherever_im](https://twitter.com/wherever_im)  & [@pushprotocol](https://twitter.com/pushprotocol)  to give you access to on-chain communications! You decide what notifications you receive.
-   The end of February marked the beginning of ETH Denver.  [CoW Swap prepared bounties for the hackathon](https://twitter.com/CoWSwap/status/1630617623145902080?s=20).

## Product Updates

**Backend**

The backend team has been working hard to improve the product infrastructure. In February, we:

-   Improved the speed for quoting limit orders
-   Improved market order matching
-   Executed several internal changes for colocation with specific e2e tests
-   Ported Solvers to the colocation model
-   Improved the overall e2e testing infrastructure
-   Worked on CIP-20 auction based Solver rewards
-   Improved some bad token error messages to make it easier for people to debug their errors

**Frontend**

The frontend team has been pushing hard for several improvements in the UI, as well as the overall UI infrastructure. In February, we:

-   Worked on several design updates for Limit Orders
-   Developed a new Token list and process for adding new external tokens [link](https://www.notion.so/FE-Improve-Token-Lists-88cca26bf32f477eb79eaec34a201d87)
-   Worked on several wallet integrations for allowing users to connect multiple wallets to CoW Swap natively
-   Worked on the Cow SDK refactoring. Created the SDK for order book API with code generated from Swagger
-   Worked on Bundling of Multiple Transactions, we started a prototype, a flow chart, and the documentation / specs

## Open Job Positions

CoW Protocol team is currently NOT looking to hire :(



CoW Protocol February 2023 Highlights

Today, CoW Swap is proud to kick off a new era in stablecoins with the introduction of the world’s very first  **milk-backed stablecoin**.

Are you tired of constant depegs and regulatory scrutiny? Is your grandma always asking how your internet coins are doing? Well look no further than CoW Swap’s brand new stablecoin. We call it Unified Simple Dairy Coin (USDC).

CoW Swap USDC is backed by liters of the world’s oldest commodity — cow milk. That’s right, we’re finally putting the farm on the blockchain as we harness the power of silos brimming with fresh milk to back the reserves of the Unified Simple Dairy Coin.

![1-milk-stablecoin.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_milk_stablecoin_b1618ff920.webp)

Unified Simple Dairy Coin has several advantages:

-   There’s no fractional reserve banking when it comes to Dairy-Fi (or DaFi, as we call it). Each Unified Simple Dairy Coin is backed by one liter of cow milk
-   The most compliant stablecoin — milk is recognized as a commodity by the CFTC so we’re in clear waters when it comes to regulation from day one
-   Your grandma’s been drinking milk since she was a little girl — she’ll understand USDC instantly!
-   Milk is an asset endorsed by some of the world’s most famous figures, including Tiger Woods, Fernando Alonso, the Nesquik Bunny, and Santa Claus

![2-milk-stablecoin.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_milk_stablecoin_35207e7941.webp)

Do you have beef with algorithmic stablecoins, fractional reserves, and other bull? Have you been waiting for a stablecoin that’s worth its weight in milk? Are you ready to ape into a financial instrument backed by one of the oldest and most stable assets (better than gold!)?

Look no further than Unified Simple Dairy Coin! The grass is greener on this side.**™**

Airdrops are planned for the first 500 people who can send us a video chugging a liter of milk. For each liter you drink, you get airdropped one Unified Simple Dairy Coin!

So open that TikTok camera and get to posting, there’s enough milk to go around. 🥛💰


large_cow-swap-introduces-new-milk-backed-stablecoin cover photo.webp

medium_cow-swap-introduces-new-milk-backed-stablecoin cover photo.webp

small_cow-swap-introduces-new-milk-backed-stablecoin cover photo.webp

thumbnail_cow-swap-introduces-new-milk-backed-stablecoin cover photo.webp

cow-swap-introduces-new-milk-backed-stablecoin cover photo.webp

CoW Swap Introduces New Milk-Backed Stablecoin

## TL;DR

-   For the month of January, CoW Protocol handled a volume of  **$889M,** with the total amount of surplus generated for that month was  **$4.4M**
-   In regard to exciting news, CoW Protocol had a hectic month! We released a tutorial for Smart Orders, participated in Token Terminals podcast and worked along the SAFE team on the take back ownership campaign!
-   We made key hires across biz dev, engineering, and ops — and we’re  **_still_**  hiring even more core team members! Find our latest job openings at  [https://cow.fi/jobs](https://cow.fi/jobs)

## Protocol Stats

In January, CoW Protocol settled a total of **$889M**

![1-Protocol-Stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_Protocol_Stats_4e92a991a0.webp)

This month, the top 3 batches to highlight are the following:

-   **Batch with the highest % of CoW trades (**[**Transaction details**](https://explorer.cow.fi/tx/0x462d8b407d69c1c41556356bc72af6e7e74621c4c3a958d9108674483e9ce43c?tab=graph)**)**: The Batch Total volume was $183,410.91, and it was created by five traders who were perfectly CoWed for 98.5% of their volume ($180,704.76). First trader was selling  **DAI**  for  **OHM,** the second trader was selling  **DAI**  for  **OHM**, the third trader was selling  **OHM**  for  **DAI**, the fourth trader was selling  **DAI**  for  **OHM**  and the fifth trader was selling  **DAI**  for  **OHM**.

![1-1-Protocol-Stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_Protocol_Stats_f4ac7a548a.webp)

-   **Batch with the highest Volume in it (**[**Transaction details**](https://explorer.cow.fi/tx/0x4929dac2e3801040b2065a16281a32a751dc5ddf32bb09c3b34c68234269a663?tab=graph)**):**  The Batch Total volume was  **$9,012,276.83M**  and it was created by a single trader who was swapping  **USDC**  to  **USDT.**

![1-2-Protocol-Stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_Protocol_Stats_590333b0d5.webp)

-   **Batch with the highest amount of surplus (**[**Transaction details**](https://explorer.cow.fi/tx/0xe60597a046857a4211075150a7dbde8812d115511c30f6e0014721742250801f?tab=graph)**)**: The Batch Total volume was  **$3,985,033** and it was created by a single trader who was swapping  **ETH**  to  **USDC**. This trader achieved the largest surplus for the month of January, by getting  **$72,579.483 USDC extra**  (1.84% surplus).

![1-3-Protocol-Stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_Protocol_Stats_47208c1f1a.webp)

During the month of January, the top 10 traders have traded a total of  **$107M**

![1-4-Protocol-Stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_Protocol_Stats_ae15d6ae2b.webp)

In the table below you can see the # of trades they have executed as well as the total volume for all their trades. Our most active trader made a whopping 2330 (!!!) trades with CoW Protocol in December.

![1-5-Protocol-Stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_Protocol_Stats_2a37b929fe.webp)

## Solvers

In January, we saw one external team add a new solver to our production environment. This solver is named Barter and the CoW Protocol team is looking forward to seeing how they perform in the competition.

Looking at the numbers, we can see that on average, for the month of January Solvers were able to generate a total of  **$4.4M**, which all traders got to enjoy in their pockets.

![2-Solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_Solvers_66c9f8125e.webp)

In regards to the Solver Statistics, one can find all sorts of information in the following table like total value settled, number of batches solved, trades and surplus. The highest generated surplus by a solver was  **$1.6M**.

![2-1-Solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_Solvers_38a89eefe4.webp)

## Governance

It has been a hectic month in terms of governance! The CoW cannot be stopped 💪.

### Executed Proposals

This month we executed three important and impactful proposals:

-   [CIP-17: Making slippage symmetric  was moved for voting:](https://snapshot.org/#/cow.eth/proposal/0xf9c98a2710dc72c906bbeab9b8fe169c1ed2e9af6a67776cc29b8b4eb44d0fb2)  proposes that the protocol treats slippage incurred by solvers symmetrically; in the case of negative slippage, a solver would be penalized with an amount equal to the negative slippage incurred (as is the case now), while in the case of positive slippage, the protocol would reimburse the solver with an amount equal to the positive slippage generated.
-   [CIP-18: CoW Grants Program Renewal Proposal](https://snapshot.org/#/cow.eth/proposal/0x1b152ae847d003034e84b796ac153ab3549f69891cef49c5d915ee5930c0b256)  asks to renew the CoW Grants Program set in CIP-8. The goal of the program is to improve the utility of [$COW](https://twitter.com/search?q=%24COW&src=cashtag_click)  tokens & facilitate deeper integration with other DeFi solutions. The Grants Program has processed payments in the total sum of 106,640 xDAI and 190,100 COW. Not only are the funds directed to valuable projects that help grow the CoW ecosystem, but also to (1) a new Volume-based Partner Reward Program aimed for integrations with the goal of having rewards based on actual performance, and (2) paying for he CoW Grants Committee stipend.
-   [CIP-19: Karpatkey DAO Proposal to Create a Core Treasury Team](https://snapshot.org/#/cow.eth/proposal/0xc4e9c0a28f12b28aedfc8c3802522a9ac9dd1c7d5045dca94abf555ca2d8cd31)**:** proposes to have KarpatkeyDAO create, train, support, and audit a Core Treasury Team within CoW DAO that would work jointly with KarpatkeyDAO to develop CoW DAO’s treasury, allowing CowSwap to efficiently provide its own liquidity, fund its operations, development, and evolution while optimizing yield for idle funds

### Draft Proposals

This month, there were two new proposals asking for feedback before they move into the next phase, a final CIP, and one even made it to voting before EOY.

-   [CIP-Draft: Auction model for solver rewards](https://forum.cow.fi/t/cip-draft-auction-model-for-solver-rewards/1405/1)**:** proposal to have an auction based mechanism for rewarding winners of the solver competition.The proposed auction mechanism allows for dynamically finding a reward based on how much value a solver provides to users by settling a batch. This results in a distribution of rewards better aligned with goals of the protocol, solvers, and users.

If you are interested in submitting a proposal to the CoW DAO, make sure to check the following  [template](https://forum.cow.fi/t/cip-0-template/28).

## CoWmunity News

-   CoW Protocol started the year the entrance of the 2023 year with lots of excitement, this year will be the  [year of the #Mooo](https://twitter.com/CoWSwap/status/1609414489513803776?s=20&t=_ZMWthclegp6rPzNdxPhRw)
-   Our CTO, Felix, wrote an  [outstanding thread](https://twitter.com/DeFi_Dad/status/1610471643490516992?s=20&t=_ZMWthclegp6rPzNdxPhRw)  that helps understand differences between the new 1inch Fusion and CoWSwap.
-   Wonder what it takes to build GAT, TWAP, ARP, LARP, and ZARP orders with CoW Protocol? Check out the  [Smart Orders Tutorial](https://twitter.com/CoWSwap/status/1611479394056568832?s=20&t=_ZMWthclegp6rPzNdxPhRw)
-   Highlighted the core idea behind CoW Protocol, many token pairs traded in a single settlement transaction (aka, ring trades). Here is a nice  [example batch](https://twitter.com/fleupold_/status/1612884467202330632?s=20&t=_ZMWthclegp6rPzNdxPhRw)  that shows why [@CoWSwap](https://twitter.com/CoWSwap)  emphasizes “multi-dimensional” batch auctions.
-   [@AnnaMSGeorge](https://twitter.com/AnnaMSGeorge)  participated on  [Token Terminal](https://twitter.com/tokenterminal/status/1615297281401528320?s=20&t=_ZMWthclegp6rPzNdxPhRw)  and dove into the details behind the CoW Swap charts
-   CoW Swap joined the Safe & others campaign to highlight the relevance of “T[aking back ownership](https://twitter.com/CoWSwap/status/1615707162835324928?s=20&t=_ZMWthclegp6rPzNdxPhRw)” to amplify the message of, not your keys, not your coins.
-   CoW DAO grants got covered by Otterspace dao:  [Learn how CoW DAO implemented Badges to improve transparency and decision-making in their Grants Program](https://twitter.com/otterspace_xyz/status/1616076229668671488?s=20&t=_ZMWthclegp6rPzNdxPhRw)
-   CoW Swap is  [trusted](https://twitter.com/CoWSwap/status/1617965594099482624?s=20&t=_ZMWthclegp6rPzNdxPhRw)  by the best of the best, If you know you know…
-   Released a  [new and very important feature for Smart Contract Wallets](https://twitter.com/CoWSwap/status/1618262359801491459?s=20&t=_ZMWthclegp6rPzNdxPhRw), you can now buy ETH directly from your multisig, with CoW Swap.
-   [Partnered with Chainpatrol](https://twitter.com/CoWSwap/status/1618997412005294082?s=20&t=_ZMWthclegp6rPzNdxPhRw)  to help our CoW users report phishing websites and scams surrounding the CoW ecosystem!
-   CoW is getting ready for  [ETHDenver2023](https://twitter.com/CoWSwap/status/1620427682361098240?s=20&t=_ZMWthclegp6rPzNdxPhRw)!!!

## Product Updates

### Backend

The backend team has been working hard to improve the product infrastructure. In January we:

-   Continued working on the Driver Colocation
-   Finished the Solver trampoline contract and sent it for review
-   Improved native price calculation for solvable orders
-   Removed deprecated orderbook routes
-   Worked on the roadmap planning and specification for 2023
-   [Fixed emergency “transfer” alerts in Tenderly](https://github.com/cowprotocol/tenderly-alerts/pull/4)
-   Investigated why native price cache wasn’t performing as expected

### Frontend

The frontend team has been pushing hard for several improvements in the UI front, as well as the overall UI infrastructure. In January we:

-   Addressed various improvements in the overall design for the Eth Flow
-   Worked on the roadmap planning and specification for 2023
-   Refactored tokens-list to get better performance in the UI
-   Worked on several on bug fixes and tech debt, improving CowSwap app performance, fixing styles, updating dependencies, etc
-   Worked on research for implementing CMS and update landing page, FAQ, and warning
-   Started working on revamped wallet connection functionality to improve UX and add new wallet integrations easily
-   Released CoW Swap version with the logo for the Chinese new Year 🐰
-   Released Explorer v2.17.0, and effectively Kilingl ~3000 lines of old code

## Open Job Positions

The CoW Protocol team is currently looking to hire:

### Marketing

[Copywriter Remote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4108904101)

### Engineering

[Integration Engineer Remote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4119188101)

### Product

[Name Your Role Remote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4095020101)

For more information on our latest job openings, visit:  [https://cow.fi/jobs](https://cow.fi/jobs)

That’s all for January — the February update will be here before you know it. 👋


CoW Protocol January 2023 Highlights

## Update as of 08/02/2023

The barter solver who got hacked already [refunded the losses it caused.](https://etherscan.io/tx/0x61a5196468b276bcedc3aab2f2fe255c2d54ca1c655523f4b25c99b1a224e715?source=post_page-----2faa9f918e29--------------------------------)

Next steps for CoW DAO are to [decide on the slashing process and to judge whether the Barter Solver can be re-added to the solver competition.](https://forum.cow.fi/t/cip-draft-slashing-of-the-barter-solver-responsible-for-a-hack-causing-cow-dao-a-loss-of-1-week-fee-accrual/1440?source=post_page-----2faa9f918e29--------------------------------)

## TL;DR

On February 7th 2023, CoW Swap’s settlement contract suffered an exploit wherein a hacker was able to drain  [~$166K](https://dune.com/queries/1975506)  from the contract. Although still an exploit, it is important to highlight two crucial facts regarding this hack:

-   User funds  **WERE NEVER AT RISK**  and have  **NOT**  been  **COMPROMISED**.
-   The protocol  **WILL RECOVER**  the stolen funds through its solver bonding pool mechanism, which is intended to mitigate such incidents.

To recap: as a trader, there is  **NO**  reason to worry or revoke approvals. CoW Swap never takes custody of your funds, since all trades are purely atomic. In order to have your funds compromised through CoW Swap, a hacker would need to obtain a signature from your private keys or have direct access to them.

## Background information

CoW Swap engages in a so-called “solver competition”, where external parties develop an algorithm to compete against other solvers to find the best execution route for CoW Swap users. Each solver team is independent from each other, and is able to deploy the necessary measures for their algorithm to perform in the best possible way.

In the hunt for better prices, solvers are allowed to tap into the CoW Swap settlement contract’s funds (called the “buffers”) to replace certain AMM interactions and thus save on gas. The  [settlement contract](https://etherscan.io/address/0x9008D19f58AAbD9eD0D60971565AA8510560ab41)  holds the buffer funds and allows the solver teams to tap into them whenever needed. These buffers accrue from fees that users pay in their sell token and are periodically drained into the protocol’s reward Safe.

In order to prevent malicious behaviour on the part of solvers and to recover from any exploits, in  [CIP-7](https://snapshot.org/#/cow.eth/proposal/0x267edf7a0bd3c771cfca763322f011ee106d8d5158612c11da29183260d1dba7)  CoW Swap implemented a bonding pool mechanism by which each solver needs to deposit $500,000 worth of cUSDC and 1.5M COW tokens as collateral for these sorts of scenarios. In the event of malicious behaviour or a hack, solvers would then get slashed and part of their bond is removed to cover for such events.

## How did it all happen?

On January 27th, 2023 a new solver entered the competition: the  [Barter solver](https://etherscan.io/address/0x55a37a2e5e5973510ac9d9c723aec213fa161919). The process was typical: after some time in staging and the depositing of the bond in the pool, the solver was allowlisted and moved onto production. Shortly after being allowlisted, the Barter solver set an  [approval](https://etherscan.io/tx/0x92f906bce94bab417cccc87ae046448d7fb8c2c0350b7ed911545577acb3bfc1)  to a contract they developed, called SwapGuard.

The aim of the intermediary SwapGuard contract is to limit the amount of tokens that can be lost in a single transaction due to slippage The goal for the Barter solver when interacting with this contract was to prevent their settlements from being exploited by MEV when submitted on-chain.

In this  [batch settlement](https://etherscan.io/tx/0x92f906bce94bab417cccc87ae046448d7fb8c2c0350b7ed911545577acb3bfc1)  that the Barter solver won, we can see that they performed a series of swaps and a single approval when executing the batch settlement. This approval is the reason for the incident.

![1-how-did-it-all-happen.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_how_did_it_all_happen_6d61046a45.webp)
[https://phalcon.blocksec.com/tx/eth/0x92f906bce94bab417cccc87ae046448d7fb8c2c0350b7ed911545577acb3bfc1](https://phalcon.blocksec.com/tx/eth/0x92f906bce94bab417cccc87ae046448d7fb8c2c0350b7ed911545577acb3bfc1)

![1-1-how-did-it-all-happen.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_how_did_it_all_happen_e90af26bd7.webp)
[https://twitter.com/peckshield/status/1622801412727148544/photo/1](https://twitter.com/peckshield/status/1622801412727148544/photo/1)

The SwapGuard contract was previously approved to spend the settlement contract’s DAI as part of a settlement. Because of a security issue that allowed arbitrary call execution from the SwapGuard contract, the attacker was able to leverage the existing approval to transfer funds from the settlement contract to their account ([address 1](https://etherscan.io/address/0xc0e82c1ed4786f8b7f806d1b8a6335ec485266ff)  and  [address 2](https://etherscan.io/address/0x94b6F400df694D0de29F600B15BAeed83E95658C)). The  [Barter solver](https://etherscan.io/address/0x55a37a2e5e5973510ac9d9c723aec213fa161919)  made the mistake of approving a vulnerable contract with the maximum value of DAI to SwapGuard, which is the root cause of the attack. This meant that since the contract had an interface for an arbitrary call, any informed hacker could call upon this function to drain the token allowances with the correct permissions.

It appears that the hacker was aware of the CoW Swap solver process, as they waited until the last day of fee accrual before performing the attack. Fees are usually withdrawn once a week on Tuesdays.

Once the issue came to light, the Barter team and the CoW Swap team hit the ground running to mitigate any possible damage or side effects. After some debugging, the issue was discovered and mitigated. All approvals for the ‘bad contract’ have been revoked, and the Barter Solver has upgraded to a new  [contract](https://etherscan.io/address/0xCce534eE5eba0bC94ddBB2B831D264AD86a5FFf4#code)  which has no arbitrary execution code functionality built in.

## What are the next steps?

As mentioned before, all approvals for the bad contract have been revoked, and no more funds are at risk. As per the rules defined by  [CIP-7](https://snapshot.org/#/cow.eth/proposal/0x267edf7a0bd3c771cfca763322f011ee106d8d5158612c11da29183260d1dba7), CoW DAO will slash the barter solver to compensate for the losses and will denylist the solver until full repayment is done.


large_CoW-Swap-Solver-Exploit-Cover-Photo.webp

medium_CoW-Swap-Solver-Exploit-Cover-Photo.webp

small_CoW-Swap-Solver-Exploit-Cover-Photo.webp

thumbnail_CoW-Swap-Solver-Exploit-Cover-Photo.webp

CoW-Swap-Solver-Exploit-Cover-Photo.webp

CoW Swap Solver Exploit— Post mortem 07/02/2023

## TL;DR

-   For the month of December, CoW Protocol handled a volume of  **$645M,** with the total amount of surplus generated for that month was  **$2.2M**
-   In regard to exciting news, CoW Protocol had a hectic month with two MAJOR launches 🚀🐮 with Limit Orders, and Native ETH Flow!
-   The exciting news does not end with product updates. Additionally, in December, CoW Protocol added a new partnership by having Shapeshift integrate CoW Protocol
-   We made key hires across biz dev, engineering, and ops — and we’re  **_still_**  hiring even more core team members! Find our latest job openings at  [https://cow.fi/careers](https://cow.fi/careers)

## Protocol Stats

In December, CoW Protocol settled a total of **$645M**

![1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_protocol_stats_15f9d67dbe.webp)

This month, the top 3 batches to highlight are the following:

-   **Batch with the highest % of CoW trades (**[**Transaction details**](https://explorer.cow.fi/tx/0x30f08193fe9cc8e169b7df76809fc9224c92ee62570b427eedb850632ac01243?tab=graph)**)**: The Batch Total volume was  **$198,528.73**, and it was created by three traders who were perfectly CoWed for 99.6% of their volume. One trader was selling  **USDC**  for  **DAI**  and another trader was selling  **DAI**  for  **USDC**

![1-1-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_1_protocol_stats_92a5932e72.webp)

-   **Batch with the highest Volume in it (**[**Transaction details**](https://explorer.cow.fi/tx/0x8e303ab4249cf1ca5149c21bb9f6cdea3472f2340f5fdd6629c04c4f8ac26242?tab=graph)**):**  The Batch Total volume was  **$9,773,653.18M**  and it was created by a single trader who was swapping USDC to WBTC

![1-2-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_2_protocol_stats_9de6f33da6.webp)

-   **Batch with the highest amount of surplus (**[**Transaction details**](https://explorer.cow.fi/tx/0xec478cde33bb05cf0e80c5dac0741797f7004601830318611d6d58a0e055ebd6/?tab=graph)**)**: The Batch Total volume was  **$2,376,900** and it was created by a single trader who was swapping APE to ETH. This trader achieved the largest surplus for the month of December, by getting  **$48,721.50 extra**  (2.04% surplus)

![1-3-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_3_protocol_stats_69a8e1c8d5.webp)

During the month of December, the top 10 traders have traded a total of  **$21M**

![1-4-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_4_protocol_stats_98bb548381.webp)

In the table below you can see the # of trades they have executed as well as the total volume for all their trades. Our most active trader made a whopping 668 (!!!) trades with CoW Protocol in December.

![1-5-protocol-stats.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_5_protocol_stats_a21ea24b71.webp)

## Solvers

In December, we saw two new external teams add a new solver to our staging and production environment. These solvers are named Quasilabs and Raven, and the CoW Protocol team is looking forward to seeing how they perform in the competition.

Looking at this table, we can see that on average, for the month of December Solvers were able to generate a total of  **$2.2M**, which all traders got to enjoy in their pockets.

![2-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_solvers_4e607592a8.webp)

In regards to the Solver Statistics, one can find all sorts of information in the following table like total value settled, number of batches solved, trades and surplus. The highest generated surplus by a solver was  **$691K**.

![2-1-solvers.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_1_solvers_166661cb3d.webp)

## Governance

It has been a relaxed month in terms of governance!

### Executed Proposals

This month was all about the holidays and our CoWs were busy wrapping up presents

![3-executed-proposals.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_executed_proposals_2345718c0f.webp)

### Draft Proposals

This month, there were two new proposals asking for feedback before they move into the next phase, a final CIP, and one even made it to voting before EOY.

-   [CIP-17: Making slippage symmetric  was moved for voting:](https://snapshot.org/#/cow.eth/proposal/0xf9c98a2710dc72c906bbeab9b8fe169c1ed2e9af6a67776cc29b8b4eb44d0fb2)  proposes that the protocol treats slippage incurred by solvers symmetrically; in the case of negative slippage, a solver would be penalized with an amount equal to the negative slippage incurred (as is the case now), while in the case of positive slippage, the protocol would reimburse the solver with an amount equal to the positive slippage generated
-   [CIP-Draft: Karpatkey DAO Proposal to Create a Core Treasury Team](https://forum.cow.fi/t/cip-draft-karpatkey-dao-proposal-to-create-a-core-treasury-team/1279)**:** proposal to have KarpatkeyDAO create, train, support, and audit a Core Treasury Team within CoW DAO that would work jointly with KarpatkeyDAO to develop CoW DAO’s treasury, allowing CowSwap to efficiently provide its own liquidity, fund its operations, development, and evolution while optimizing yield for idle funds

If you are interested in submitting a proposal to the CoW DAO, make sure to check the following  [template](https://forum.cow.fi/t/cip-0-template/28).

## CoWmunity News

-   CoW Protocol allows anyone to  [experiment with automated trades onchain](https://twitter.com/CoWSwap/status/1598337820279513088?s=20&t=3cLJvsantlS-H_eZU-UaEQ)!! Eg, every time a contract accumulates at least x ETH, trigger a swap for ETH-USDC
-   CoW Protocol was excited to  [announce](https://twitter.com/CoWSwap/status/1600181401306832896?s=20&t=3cLJvsantlS-H_eZU-UaEQ)  that [@ShapeShift](https://twitter.com/ShapeShift)  integrated with CoW, providing its users with the best prices and protection from MEV in Ethereum

<iframe width="560" height="315" src="https://www.youtube.com/embed/VFinnj5x40o?si=v0byxkQFaAdAFmQG" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

-   New significant  [updates](https://twitter.com/CoWSwap/status/1600884362618105856?s=20&t=3cLJvsantlS-H_eZU-UaEQ)  were made to the CoW Swap UI!. It was decided to abandon the hard outlines in our core swap module, in favor of a sleeker new experience

![4-Cowmunity-news.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_Cowmunity_news_0609419d7f.webp)

![4-1-Cowmunity-news.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_1_Cowmunity_news_469e985453.webp)

-   Our friends at Gnosis Chain  [merged](https://twitter.com/CoWSwap/status/1601207483854630914?s=20&t=3cLJvsantlS-H_eZU-UaEQ)! Congratulations to everyone involved :)
-   CoW said hello to the most  [UN-limited limit orders in DeFi](https://twitter.com/CoWSwap/status/1602298525588627458?s=20&t=3cLJvsantlS-H_eZU-UaEQ). Limit orders from CoW Protocol are officially live!
-   CoW Protocol and Yearn Finance held one of a heck of a CoWmunity call, where Yearn shared the alpha that all vaults will go through CoW Protocol. If you missed it, listen to the  [recording](https://twitter.com/CoWSwap/status/1604605820225961984?s=20&t=3cLJvsantlS-H_eZU-UaEQ)
-   CoW Protocol  [launched a new feature](https://twitter.com/CoWSwap/status/1604855739918348288?s=20&t=3cLJvsantlS-H_eZU-UaEQ)  to allow CoW Swap traders to swap ETH natively without having to wrap it
-   Christmas(Easter)Egg was  [deployed](https://twitter.com/CoWSwap/status/1605693617959378944?s=20&t=3cLJvsantlS-H_eZU-UaEQ). CoW Swap trades were able to enjoy a new Christmas UI designed specifically for the holidays!
-   2022 was an incredibly successful year for [@CoWSwap](https://twitter.com/CoWSwap), read the  [highlights](https://twitter.com/AnnaMSGeorge/status/1608821825081081858?s=20&t=3cLJvsantlS-H_eZU-UaEQ)  of what the protocol achieved throughout the year

## Product Updates

### Backend

The backend team has been working hard to improve the product infrastructure. In December we:

-   Added support for paying ETH to smart contract wallets. (Ie buying native ETH (not WETH) with Safe.)
-   Restarted solver + driver colocation for development from pre-limit order
-   Made small fixes and improved metrics for limit orders feature in preparation for the launch
-   Launched support for limit orders
-   Launched support for native ETH sell orders

### Frontend

The frontend team has been pushing hard for several improvements in the UI front, as well as the overall UI infrastructure. In December we:

-   Deployed a first version of Limit orders on  [barn.cow.fi](https://barn.swap.fi/)
-   Released the new CoW Swap  [design](https://swap-dev-git-release-125-cowswap.vercel.app/#/1/swap/WETH)
-   Launched support for limit orders with a completely new independ UI
-   Launched support for native ETH sell orders
-   Deployed a new version of the UI with a Christmas-Holiday theme!

## Open Job Positions

The CoW Protocol team is currently looking to hire:

### Marketing

[CopywriterRemote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4108904101)

### Engineering

[Data Engineering Team LeadRemote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4029514101)

[Mechanism Design Research EngineerRemote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4104759101)

[Senior Frontend Engineer (React.js/Web3)Remote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4095855101)

### Product

[Name Your RoleRemote — Lisbon — Berlin](https://boards.eu.greenhouse.io/cowswap/jobs/4095020101)

For more information on our latest job openings, visit:  [https://cow.fi/jobs](https://cow.fi/jobs)
 
**That’s all for December — the January update will be here before you know it. 👋**



CoW Protocol December 2022 Highlights

CoW Protocol’s native order types are limited to  _partially-fillable limit buy_  and  _limit sell_  orders. While this expression language covers most retail use cases, it misses some more-powerful advanced order types such as:

-   Good after time orders
-   Stop loss orders
-   Automated rebalancing portfolio orders

… to just name a few.

Adding new native order types to CoW Protocol would involve changing and redeploying the smart contract logic of the core protocol, and is therefore something we want to avoid for the time being.

While the above-mentioned order semantics could be communicated to the protocol/solvers without a smart contract change (e.g. by using additional fields in the  **app_data**), they couldn’t be enforced by the settlement logic and would therefore be subject to “off-chain consensus” (misbehavior would result in slashing by the DAO). This limits the amount of value that can be exchanged using these order types and puts more risk and trust on the solvers.

Smart orders are a clever way of achieving the above-mentioned semantics in a completely trust-less way without requiring a protocol change. Smart orders are based on  [ERC1271](https://eips.ethereum.org/EIPS/eip-1271)’s contract signature scheme and allow smart contracts to decide  **at settlement time**  if an order that is placed in their name is satisfying their trade preference or not.

While regular orders are signed by their owner ahead of time and statically verified using  [**ecrecover**](https://soliditydeveloper.com/ecrecover), smart contract orders implement interactive signature verification by asking the author at settlement time if they are okay with the proposed trade. This verification allows the author to decide just-in-time if they are happy with the proposed trade, so that their approval can be conditioned on any on-chain information (e.g. block time, oracle prices, current balance, etc.).

**In essence, this allows developers to create smart autonomous agents that trade according to predefined rules and strategies, entirely on-chain.**

For example, an automated rebalancing portfolio order (a smart contract that aims to have equal $ value of all its tokens) could perform the following check:

    def checkSignature(order): 
	    buyBalanceAfterTrade = order.buyToken.balanceOf(self) + order.buyAmount
	    sellBalanceAfterTrade = order.sellToken.balanceOf(self) + order.sellAmount
		
		buyBalanceValue = oracle.value(order.buyToken, buyBalanceAfterTrade)
		sellBalanceValue = self.oracle.value(order.sellToken, sellBalanceAfterTrade)

		# Check we only trade portfolio tokens
		assert(order.sellToken in portfolio and order.buyToken in portfolio)
		# Check we don't over-balance
		assert(sellBalanceValue >= buyBalanceValue)
		return  True

Note that the concrete CoW Protocol order that is verified by the smart order contract conforms to the native CoW Protocol order type (i.e. it is a partially-fillable limit order).

However, by incorporating additional information into the interactive verification step (e.g. check the oracle price and only accept if ETH trades below X), the smart order can add additional conditions to the trade.

In fact, the “tricky” part is finding the correct native CoW Protocol order parameter for which the smart contract’s signature verification passes. For this, order placement can happen either:

-   By solvers that are aware of smart orders in the form of just-in-time liquidity (orders that are not part of the official auction set and therefore don’t contribute to the object value)
-   Permissionlessly via the public CoW Protocol API (since ERC1271 doesn’t require a private key signature, anyone can place orders on behalf of a smart contract)

The former option is better suited for very complex order types where the correct order parameters may depend on the outcome of the optimization problem itself. Solvers are incentivised to include these orders since they might allow them to generate more surplus for public user orders.

However, aside from reaching out to solvers directly, there isn’t a great way to inform solvers about this type of custom liquidity today. Therefore, for the purpose of this tutorial, we will focus on the simpler type of order placement: smart orders that are included via CoW Protocol’s public API and available to all solvers by default.

## How do you build a smart order?

We developed an experimental framework for creating smart orders, which proposes a standard interface for conditional smart orders. Orders that implement this interface can be automatically picked up by our supporting infrastructure to place orders without the need for individual operational maintenance:  [https://github.com/cowprotocol/conditional-smart-orders](https://github.com/cowprotocol/conditional-smart-orders)

The core idea is that the smart order contract not only verifies if it is happy to trade a given order. It also proposes (via a separate view method) a concrete CoW Protocol order that it would be willing to accept.

Upon instantiation, the smart order triggers an event. This event is indexed and adds this contract to a registry that an external  _watchtower_  is constantly monitoring by querying the implemented view method. Upon seeing an order candidate, the  _watchtower_  places this order into the CoW Protocol API.

From a developer perspective, all you need to do is implement a single method (**getTradableOrder**), which provides logic for what order parameters your contract would accept given the current state of the chain. The default implementation of the signature verification logic would be as simple as checking that the given order is indeed the one returned by  **getTradableOrder**  (less strict checks are of course also possible in case it’s hard to reliably reproduce the exact order params in between calls).

As soon as  **getTradableOrder**  returns an order, our  _watchtower_  will forward it to the CoW Protocol API, a solver will pick it up and, via the settlement logic, ask your contract to verify it as part of the settlement transaction.

We implemented the registry indexing and  _watchtower_  logic using two [Tenderly Web3 Actions](https://docs.tenderly.co/web3-actions/intro-to-web3-actions):

1.  One to index order creation events and add contracts to the watch registry
2.  Another one to periodically check contracts in the registry if they are willing to trade at the current block

There are other ways to run this off-chain infrastructure, but we found Tenderly’s framework the most convenient without the need for our own cloud setup.

The repository also comes with a few suggested order types (use at your own risk). We would highly appreciate contributions to this repository (you can also apply for  [Grants](https://grants.cow.fi/)  for specific order types).

## How do you deploy a smart order with your Safe?

While the conditional-order framework makes it quite easy to implement custom verification logic, there is usually some amount of custody overhead logic involved that needs to be implemented in such a contract (e.g. how do I get my funds back when I want to exit the strategy). This logic can be complex, expensive to audit and prone to errors. Thankfully, there is a proven smart account abstraction standard out there ([Safe](https://safe.global/)) that allows for a very flexible custody solution and that is already securing many billions of dollars in funds.

In this tutorial we will therefore use a Safe as our main “smart agent” contract and delegate to the conditional smart order logic only for signature verification.

Safe supports ERC1271 signatures out of the box, but also allows the owner to set a custom ERC1271 implementation (e.g. the one your smart order implements). Safes implement ERC1271 via a so-called “fallback handler”, a component that is called whenever the Safe is invoked on a method it doesn’t implement directly (e.g.  **isValidSignature**). Therefore, by setting our smart order implementation as the Safe’s custom fallback handler we replace the default ERC1271 implementation with our own and make our agent trade according to our custom rules. Note that a Safe with such a fallback handler will only be able to ERC1271 sign off on CoW Protocol orders (no other 3rd party dApp related signatures will be valid). Normal Safe transactions with owner signatures will continue to work as usual.

So let’s get started! Most smart orders in our conditional smart order framework come with a  [factory](https://soliditydeveloper.com/clonefactory)  that allows instantiating new instances directly from the Safe UI. The plan of attack is therefore to:

1.  Create a new Safe
2.  Approve the tokens in the CoW Swap app
3.  Create a new smart order instance (targeted at this Safe specifically)
4.  Set the smart order’s address from the previous step as the Safe’s fallback handler
5.  Fund it with the token(s) to be traded. Wait and see the Safe trade automatically

## Step-by-step guide

### 1. Create a new Safe

Head over to [https://app.safe.global/welcome](https://app.safe.global/welcome)  and follow the prompts for “Create new Safe”. Feel free to leave the owner structure simple, e.g. 1/1 signer.

![1-create-new-safe.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/1_create_new_safe_11947cfc37.webp)

### 2. Approve the tokens in the CoW Swap App

Inside your Safe, head over to Apps →  [CoW Swap](https://swap.cow.fi/#/1/swap/WETH?utm_source=docs.cow.fi&utm_medium=web&utm_content=header-nav-link). At the top-left of the app, click on Account → Tokens and select the token that needs to be enabled.  [Swap](https://swap.cow.fi/#/1/swap/WETH?utm_source=docs.cow.fi&utm_medium=web&utm_content=header-nav-link)  for any other token and approve the token(s) you intend to trade with this contract.

In this example we are going to trade Wrapped XDAI:

![2-approve-tokens-in-cow-swap-app.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/2_approve_tokens_in_cow_swap_app_5364f18433.webp)

### 3. Create a new smart order instance

For this example we will deploy a TradeAboveThreshold order, which will automatically sell whenever the holds more than X of some token.

The factory for this contract on Gnosis Chain is located at [0xd20a99e3c6c103108d74e241908e00ef4db447fb](https://gnosisscan.io/address/0xd20a99e3c6c103108d74e241908e00ef4db447fb)  (if you can’t find the factory, you can deploy a new factory using foundry). To create a new instance, head to your Safe and create a  _New Transaction_  →  _Contract Interaction_  and load the contract ABI from the factory address.

We want to call create. Fill out the required parameters (with the target being your current Safe). In this example we are selling wxDAI for USDC whenever the contract holds $1 or more:

![3-create-a-new-smart-order-instance.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_create_a_new_smart_order_instance_a65941db91.webp)

Add transaction, create batch, and execute. After the transaction has been executed, open the transaction hash in a block explorer to find the address of the smart order instance that the factory has created (e.g. from looking at the internal txs).

![3-1-create-a-new-smart-order-instance.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/3_1_create_a_new_smart_order_instance_214ed8ac83.webp)

Here we created [https://gnosisscan.io/address/0xdf724fdbaef2419f1af895f494bd8969ec433d01](https://gnosisscan.io/address/0xdf724fdbaef2419f1af895f494bd8969ec433d01).

### 4. Set Custom Fallback handler

Head back to the Safe to create a  _New Transaction_  →  _Contract Interaction_, this time on the Safe itself (enter the address of the Safe).

When prompted choose  _Use Implementation ABI_.

![4-set-custom-fallback-handler.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_set_custom_fallback_handler_ae00dddb6b.webp)

The contract method selector we want to invoke is setFallbackHandler and the address should be the contract that has been created in the previous step:

![4-1-set-custom-fallback-handler.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/4_1_set_custom_fallback_handler_12a2a422f0.webp)

After adding and executing this transaction, you will have set the smart order as your Safe’s ERC1271 implementation.

### 5. Fund the Safe

Now, when the Safe receives 1 wxDAI, it should automatically place an order to sell it for USDC. Let’s try:

![5-fund-the-safe.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/5_fund_the_safe_998c182c18.webp)

Shortly after the transfer is mined, if we check [https://explorer.cow.fi/](https://explorer.cow.fi/)  for our Safe address, we should see a pending order trying to sell the wxDAI for USDC

![5-1-fund-the-safe.webp](https://celebrated-gift-f83e5c9419.media.strapiapp.com/5_1_fund_the_safe_141edf754d.webp)

And, after a short amount of time the order should be filled.

You can repeat this process as often as you want by just sending some more funds to this Safe. In order to withdraw the proceeds you can use the standard Safe functionality.

## Conclusion

In this tutorial we described and hinted at the power that smart orders can have in the context of smart contracts becoming autonomous trading agents, talked about how a simple “conditional order” type can be created with a few lines of solidity and walked through a step-by-step example of how we can deploy a smart order using Safe as a custody solution.

We hope this article inspired you to try out smart orders, or even build your own on top of CoW Protocol. Please get in touch with suggestions and ideas. We are looking forward to seeing what type of orders can be built with this paradigm.

Give  [ERC1271 orders a try](https://swap.cow.fi/#/1/swap/WETH?utm_source=docs.cow.fi&utm_medium=web&utm_content=header-nav-link)  today and let us know what you think by reaching out on  [Twitter](https://twitter.com/CoWSwap)  or  [Discord](https://discord.com/invite/cowprotocol)!



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This tutorial provides an introduction and a step-by-step description of how to create “smart orders” on CoW Protocol. The order that we create will facilitate custom trading logic and use Safe (formerly known as Gnosis Safe) as a backbone.

Tutorial: Creating Smart Orders with CoW Protocol

On July 21st, 2023, After a successful  [governance vote](https://app.nexusmutual.io/governance/view?proposalId=197)  from Nexus Mutual, CoW Swap processed a  [large trade for the insurance protocol](https://twitter.com/CoWSwap/status/1682450015237857280?s=20)  using the exchange’s signature intent-based trading design and MEV protection.

## Trade Details

Nexus Mutual swapped 14,390 ETH from its capital pool for an equivalent amount in rETH. They did so in two separate orders, the first order swapped  [250 ETH for 231.8 rETH](https://explorer.cow.fi/orders/0x29a83c4990db493b7fbf47ed821288340b4e9394524b1da151251d274d64e150cafea5c050e74a21c11af78c927e17853153097d64baae44?tab=overview)  and the second order swapped  [14,140 ETH for 13,117.148 rETH](https://explorer.cow.fi/orders/0x5e84d3e19341b77c362f37e706b153e460deb929d850bec7d9697a631fe4596fcafea5c050e74a21c11af78c927e17853153097d64bab666?tab=overview).

The overall order stats:

-   **USD value of the trade**: $27.3 million
-   **Minimum asset amount**: 13,362 rETH
-   **Maximum asset amount**: 13,400 rETH
-   **Amount the DAO received**: 13,409.04 rETH

## Why CoW Swap?

CoW Swap’s solver competition ensured that Nexus Mutual received the best possible execution price, even after announcing the trade details publicly in a governance proposal ahead of time.

CoW Swap provided several benefits for this trade:

1.  Protection from attack vectors caused by the delayed execution
2.  A limit order that guarantees some minimum amount for the assets
3.  Minting rETH through CoW Swap directly, instead of swapping for the liquidity on the market

For this swap, Nexus Mutual chose the Chainlink oracle as their price checker, guaranteeing that they would receive no less than the minimum specified in the governance proposal.

## CoW Swap: The leader in DAO trading

The largest DAO trades take place on CoW Swap, and the exchange is single-handedly responsible for more than 30% of all DAO trades. Check out  [CoW Swap for DAOs](/learn/cow-swap-for-daos)  to learn why DAOs such as  [Aave](/learn/aave-trade-breakdown),  [ENS](/learn/ens-trade-breakdown), and more trust CoW Swap with their large trades.

If you’re a DAO looking to make a large trade on CoW Swap, get in touch with us on  [Twitter](https://twitter.com/CoWSwap)  or through our  [Discord](https://discord.com/invite/cowprotocol). You can check out CoW Swap for yourself  [here](https://swap.cow.fi/#/swap?utm_source=medium&utm_campaign=NexusM-article).





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The smartest DAOs trust CoW Swap with their most-important trades


Nexus Mutual Trade Breakdown

On July 10th, 2023, After a successful  [governance vote](https://app.aave.com/governance/proposal/?proposalId=267)  from Aave DAO, CoW Swap processed a large LP position trade for Aave using the exchange’s signature intent-based trading design and Milkman contract.

Since then, Aave completed another trade totaling $1,948,000 with the goal of  [treasury diversification](https://app.aave.com/governance/proposal/282/).

## 1st Trade Details

Aave DAO acquired a direct position in the B-80BAL-20WETH Balancer pool by swapping their entire aBAL & aWETH balances. The trade occurred over two transactions ([Transaction 1](https://explorer.cow.fi/orders/0xb8534a7890442f38394224acea0b894e734175f9dbb17130d444ffcf3c096f438a2e3cef438049b4176186468d3a095d9e24973b64ac2280?tab=overview)) ([Transaction 2](https://explorer.cow.fi/orders/0x825de9ff6963afd5a6e1ab63712f60a749b8750a023e2e49089003d9fee9128b176f00c370f77bdc6c3079296ff89391ccb26bca64ac625e?tab=overview)).

-   **USD value of the trade**: $2,026,573.69
-   **Amount the DAO received**:  [157,169.86 B-80BAL-20WETH](https://governance.aave.com/t/analysis-of-b-80bal-20weth-acquisition/14005), with an average BPT price of $12.89
-   **Slippage tolerance:** 1.5%
-   **Actual slippage**: 1%
-   **Positive difference compared to direct deposit**: 1,918.72 units of B-80BAL-20WETH
-   **Positive difference due to slippage**: 556 units of B-80BAL-20WETH

## 2nd Trade Details

Aave DAO swapped DAI to USDC for treasury diversification purposes. This trade also occurred over two transactions ([Transaction 1](https://explorer.cow.fi/orders/0x03a16efc858c41dd476b8270ed7cdeac00718dd72902493e13c4ec4931a8543d944ea54ae648ceebbdc3e643e8a993a0c4e8dae564ca6b2a?tab=overview)) ([Transaction 2](https://explorer.cow.fi/orders/0xffa61ae864eeaa228ca19195887303d278bbd40f75a9c70493737eb3dbcd0280264fe3292fc2a05500d638093d88adbca487e36864ca6b31?tab=overview)).

-   **USD value of the trade**: $1,937,476
-   **Amount the DAO received**: 1,937,476 USDC
-   **Price Surplus**: $9,699.15

## Why CoW Swap?

CoW Swap’s solver competition ensured that Aave received the best possible execution price, even after announcing trade details publicly in a governance proposal ahead of time.

Compared to a direct deposit, CoW Swap provided several benefits for this trade:

1.  Protection from attack vectors caused by the delayed execution
2.  The minimum amount in a direct deposit proposal would have been uncertain, requiring a high slippage tolerance to successfully execute the trade, which in turn would expose the trade to MEV bots
3.  Use of the Milkman bot for protection against MEV, slippage, and re-entrancy risk

## Milkman

The CoW Grants Program-funded, and Yearn.fi-developed  [Milkman bot](https://github.com/cowprotocol/milkman-bot)  was critical to the Aave trade.

The Milkman bot ensures that trades execute for the real-time price or better by utilizing a price checker, such as a Uniswap v3 pool, Chainlink oracles, or a custom price checker. Instead of setting a slippage tolerance, DAOs can utilize Milkman to determine a maximum percentage deviation from the price checker, guaranteeing that their trade will finalize at a fair market price. Milkman also simplifies governance for trades as DAOs don’t have to define a fixed price re-vote if the market moves significantly.

For this swap, Aave DAO chose the Chainlink oracle as their price checker, guaranteeing that they would receive no less than the minimum specified in the governance proposal.

## CoW Swap: The leader in DAO trading

The largest DAO trades take place on CoW Swap, and the exchange is single-handedly responsible for more than 30% of all DAO trades. Check out  [CoW Swap for DAOs](/learn/cow-swap-for-daos)  to learn why DAOs such as  [ENS](/learn/ens-trade-breakdown),  [Nexus Mutual](learn/nexus-mutual-trade-breakdown), and more trust CoW Swap with their large trades.

If you’re a DAO looking to make a large trade on CoW Swap, get in touch with us on  [Twitter](https://twitter.com/CoWSwap)  or through our  [Discord](https://discord.com/invite/cowprotocol). You can check out CoW Swap for yourself  [here](https://swap.cow.fi/#/swap?utm_source=medium&utm_campaign=aave-trade).

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Aave Trade Breakdown

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