Cowswap: Better Trade Execution Through a Coincidence of Wants

• Cowswap is a fully permissionless trading protocol that utilizes batch auctions to clear trades.
• By finding a coincidence of wants between traders, Cowswap provides traders with better execution.
• Solvers are permissionless entities that find solutions to complicated batches and compete to execute trades based on a second-price auction.
• The goal of each solver is to maximize the trading surplus provided to users and fees to the protocol.

Cowswap is the first trading interface built on top of CoW protocol. It allows users to buy and sell tokens using gasless orders that are settled P2P when possible. The goal of the protocol is to provide better execution for traders using batch auctions and coincidence of wants (CoW); in order to eliminate any MEV extraction and settle trades onchain without using DEX AMMs as much as possible.

Coincidence of Wants (CoW)

A coincidence of wants is an economic phenomenon where two parties each hold an item that the other wants, so they exchange these items directly without any monetary medium, and in the case of CoW protocol, without a middleman such as an AMM charging excess fees and without the price impact of a constant function market-maker (CFM)).