As you know, DEX is an extremely important segment in every ecosystem. It is the place to receive the first cash flow when the ecosystem develops. But current DEXs still have many liquidity problems and transaction fees, especially on Ethereum, the transaction fees are very high. So in this article, I will introduce the Cow protocol, promising to solve the above problems.
What is Cow Protocol? Cow Protocol is a DEX Aggregator developed on Ethereum. It will offer the best price to users by matching orders directly or transferring to the Dex with the best price. So what is Cow Protocol? How does it work? Let’s find out in this article!
To better understand Cow Protocol as well as the DEX Aggregator segment, you can read the following articles on Weakhand:
- What is 1inch (1INCH)? 1inch Cryptocurrency Overview
- What is Matcha? Matcha Cryptocurrency Overview
What is Cow Protocol?
Cow Protocol is a protocol built on the Ethereum platform with products such as CowSwap, CowDao, etc. Basically, it divides orders into batches, then matches orders with the Coincidences of Wants (CoW) mechanism and takes the portion of orders that are not available. Liquidity to match on Cow sent to the DEX with the best price to trade. That’s how the protocol ensures users always get the best price.
Coincidence Of Wants (CoW) can be understood as every time you and another trader hold an asset that the other wants, your transaction will be settled directly without using AMM and therefore not subject to any fees or price escalations. Only amounts that cannot be settled with other CowSwap traders are sent to the underlying AMM.
This mechanism is also P2P order matching.
One of the most prominent products on the Cow protocol is CowSwap. Is the DEX Aggregator with the first trading interface built on the CoW protocol. Officially launched on April 28, 2021, it allows you to buy and sell tokens using gasless orders that are settled peer-to-peer between users or transferred to any liquidity source available on the chain.
All activities on the Cow protocol must mostly go through CowDAO. CowDAO is an organization comprised of developers, traders, market makers, and many other community members aligned with its vision. Cow Protocol technology provides a network that enables efficient peer-to-peer order matching.
How Cow Protocol Works
Orders will be packaged in lots, usually within about 30 seconds there will be one lot. These lots will be auctioned, and the person offering the best price will receive that lot for processing. People who participate in auctions on Cow are called Solvers. They process batches of transactions by finding orders that can be matched directly with each other, the part that has no liquidity to match will be transferred to the Dex with the best price for processing.
Conditions to become a Solver:
- An Ethereum address needs to deposit a bond in the form of tokens and wait for determination by GnosisDAO or CowDAO.
- Once the tokens have been locked, GnosisDAO/CowDAO must vote to approve or deny that Ethereum address. If the vote is successful, that Ethereum address will be whitelisted (verified) into the solver’s contract.
- Solver needs to have the technical knowledge to create appropriate batch resolution solutions, otherwise risk being penalized by GnosisDAO/CowDAO for misconduct.
To create the most user-friendly and optimal experience, when canceling or placing an order, there will be no fees. And the protocol still doesn’t have any revenue. The transaction fee portion is owned by Solver.
Development Roadmap
Updating…
Core Team
Updating…
Investors
March 29, 2022: Private round successfully raised $23M from investors such as Blockchain Capital, 1kx, Cobie,
The Lao, Robot Ventures, mgnr.io, Fernando Martinelli, LongHash Ventures, Delphi Ventures, Kronos Research,…
Tokenomics
Overview information about Token Cow Protocol
- Token Name: Cow Protocol
- Ticker: COW
- Blockchain: Ethereum
- Standard: ERC-20
- Contract: 0xdef1ca1fb7fbcdc777520aa7f396b4e015f497ab
- Total supply: 1,000,000,000
- Maximum supply: 1,000,000,000
Token Allocation
- Treasury-44.40%
- Team-15.00%
- Private Round-10.00%
- Airdrop-10.00%
- CoWmunity Investment-10.00%
- GnosisDAO-10.00%
- Advisors-0.60%
Token Release
Token Use Case
COW Token holders are used to vote on the Cow DAO.
Exchanges
Updating…
Cow Protocol Information Channel
- Website: https://cow.fi/
- Twitter: https://twitter.com/CoWSwap
- Medium: https://medium.com/@cow-protocol
- Discord:
Summary
Cow Protocol brings a more optimal product, but capturing a delicious piece of the pie from 1Inch, Matcha,… is still a big problem. However, Cow is also used frequently by users. On the project side, the protocol has no revenue yet.
So I have clarified what Cow Protocol is? Overview of the Cow Protocol cryptocurrency. Hope this article brings you a lot of useful knowledge.
