CoWDAO

CoWDAO is a decentralized autonomous organization (DAO) focused on developing user-protective and efficient trading solutions on the Ethereum blockchain and other EVM-compatible chains. It originated as an incubation project within GnosisDAO, founded in 2021 by Anna George and GnosisDAO to address inefficiencies in decentralized finance (DeFi) trading. In March 2022, CoW Protocol spun out from GnosisDAO, securing $23 million in a token round to foster its independent growth.

The organization's core mission is to shield traders from value extraction strategies known as Maximal Extractable Value (MEV), such as front-running and sandwich attacks, where bots exploit transaction ordering for profit at the user's expense. CoWDAO manages a suite of products including CoW Protocol, CoW Swap, MEV Blocker, and CoW AMM. The flagship product, CoW Protocol, is a permissionless decentralized exchange (DEX) aggregator that utilizes batch auctions. This mechanism groups multiple trade intents together and settles them simultaneously at uniform clearing prices, which neutralizes the advantage of transaction reordering by MEV bots.

A key innovation of the protocol is its use of "Coincidence of Wants" (CoWs), a phenomenon where peer-to-peer trades are matched directly without interacting with on-chain liquidity pools, thereby saving on gas and liquidity provider fees. Users submit an "intent to trade" rather than a direct transaction, and off-chain entities called "solvers" compete to find the best possible execution price across all available liquidity sources. This delegated execution model shields users from on-chain MEV risks.

To further protect users, CoWDAO developed MEV Blocker, an RPC endpoint that hides transactions from the public mempool and routes them through a network of searchers who cannot front-run or sandwich trades. Additionally, the CoW AMM was created to protect liquidity providers (LPs) from losses incurred due to arbitrage, known as Loss-Versus-Rebalancing (LVR). Governance is managed by holders of the COW token, who can vote on proposals and steer the protocol's development. The business model primarily revolves around capturing a portion of the positive price deviation between the user's quoted price and the final execution price.

Keywords: decentralized exchange, MEV protection, batch auctions, DEX aggregator, Coincidence of Wants, DeFi trading, Ethereum, liquidity providers, front-running protection, sandwich attack protection, peer-to-peer trading, solver competition, intent-based trading, gas fee optimization, on-chain liquidity, cross-chain swaps, decentralized governance, COW token, CoW Swap, CoW AMM