CoW Swap: Intents, MEV, and Batch Auctions
CoW Swap uses signed messages for intent-based trading with a batch auction system, offering features such as Hooks, TWAP orders, MEV resistance, low fees, and increased security.
In our latest report, we dive into its novel design. π§΅
CoW Swap uses signed messages for intent-based trading with a batch auction system, offering features such as Hooks, TWAP orders, MEV resistance, low fees, and increased security.
In our latest report, we dive into its novel design. π§΅
CoW Swap, an intent-based app, enables users to swap tokens through signed messages. It uses a batch auction mechanism where solvers compete to maximize order surplus by finding Coincidence of Wants (CoWs) and routing to the best on-chain liquidity.
"CoW" refers to Coincidence of Wants, which is an economic phenomenon where two parties each hold an item that the other wants, allowing them to carry out a direct exchange.
CowSwaps architecture offers unique features like CoW Hooks and Time-Weighted Average Price orders via the Composable CoW Framework.
Benefits include MEV resistance, low or gasless fees, and enhanced security with solvers approving new contracts for users.
Benefits include MEV resistance, low or gasless fees, and enhanced security with solvers approving new contracts for users.
CowSwap leverages Solvers, which are external agents who execute intent trades by finding the most efficient routes, combining off-chain matching with on-chain swaps. They compete to maximize price fulfillment and are compensated for successful order execution.
Recently, solver marketshare volume has shifted from primarily DEX aggregators to more sophisticated actors, such as @otex_tools and @BarterDeFi.
In our full report, @jinglingcookies deep dives into @cowswap and its novel innovations in the DEX landscape.
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