After the collective plunge in the past few days, the market has rebounded significantly in the past two days and is taking off collectively, which is cause for celebration!
Today, let’s take a look at the decentralized exchange Cow Protocol.
In the past few days, Cow Protocol's token Cow coin has been very strong. From 0.249 US dollars on November 6, 2024, to today's highest point of 1.2055 US dollars, it has risen by 384% in 45 days, and the return rate is very impressive. It has now fallen back to 1.14 US dollars. The current market value of Cow coin has reached 335 million US dollars, and the current market value ranks 229th. Let's take a look at what Cow is all about!
Introduction
As a decentralized finance (DeFi) innovation project, Cow Protocol runs on the Ethereum mainnet and aims to optimize trading results for users through a series of unique strategies. The core of the protocol is the use of a batch auction mechanism combined with peer-to-peer transactions to ensure the most favorable transaction price. This approach is further enhanced by the fully permissionless structure it uses, allowing seamless and inclusive participation.
One of the protocol's signature features, batch auctions, serves as a key price discovery mechanism. It leverages the concept of Coincidence of Wants (Cows), essentially looking for opportunities where trading desires overlap, thereby maximizing liquidity and ensuring efficient trade execution. This system not only facilitates better pricing, but also helps reduce gas costs and minimize execution risk, as trades are executed in batches rather than individually.
A key operational aspect of the Cow Protocol is its reliance on solvers, entities responsible for finding the most advantageous exchange rates for trades. These solvers compete to solve trades, incentivized by offering the best exchange rates for the right to execute them. This competitive environment ensures that users receive the best prices, as solvers leverage all available on-chain liquidity sources, including decentralized exchanges (DEXs) and DEX aggregators, to fulfill trade orders.
Practical application of the project
Currently, Cow DAO’s three main products are the Cow Protocol, MEV Blocker, and Cow AMM, which it supports through development and marketing resources — including the Cow Grants Program, Cow Protocol Explorer, and Cow Swap frontend.
Cow Protocol is a fully permissionless trading protocol that utilizes batch auctions as its price finding mechanism. Cow Protocol uses batch auctions to maximize liquidity through coincidence of demand (Cow), in addition to being able to leverage all available on-chain liquidity when needed.
MEV Blocker is an RPC endpoint designed to protect user transactions from MEV (Maximum Extractable Value) attacks such as front-running and sandwiching. In addition to protecting user transactions from the dangers of MEV, MEV Blocker also leverages the order flow auctions of seekers and builders to provide users with rebates for not backing up their transactions.
Cow AMM is a new type of AMM built by the group to protect LPs from price exploitation in the form of LVR. Liquidity providers want a yield on their tokens, but most liquidity pools are not actually profitable after taking outdated prices into account. Arbitrageurs take advantage of these stale prices at the expense of LPs. Cow AMM fixes LVR once and for all, and the liquidity pool is proven to outperform the reference Balancer and Uniswap pools.
Project Background
First of all, the investors behind the scenes made do and raised 23 million US dollars in financing.
However, we have to mention here that this project took advantage of Trump's popularity.
Trump's DeFi project World Liberty Financial (WLFI) purchased a large number of crypto assets in December, with a cumulative expenditure of nearly $45 million, including ETH, cbBTC, LINK, AAVE, ENA and the latest ONDO. Although COW is not on the asset list of World Liberty Financial, Cowswap has been used in recent on-chain token purchases, which is also one of the most commonly used DEXs by Ethereum founder Vitalik Buterin.
Cow Token Economic Model
Current maximum supply: 1 billion
The COW token is designed to support the long-term sustainability and autonomy of the CoW protocol. The maximum inflation rate is capped at 3% per year, and any inflationary measures can only be enacted at a minimum frequency of once every 365 days.
The above is the distribution situation. The unlocking is not found, but I calculated that the unlocking is about 1.5% per month. I don’t know if it is correct, but the number of unlocking has been increasing. Sometimes it is less and sometimes it is more.
Summarize
Cow Swap stands out for its outstanding innovative performance, providing practical solutions for on-chain trading users in key areas such as MEV resistance, gas-free transactions and advanced orders. With its superb design concept and excellent user experience, Cow Swap has performed well in the highly competitive DEX aggregator market. The latest data shows that the total transaction volume of the protocol has exceeded the 70 billion US dollar mark, and achieved a considerable income of 392 ETH in December, fully demonstrating its strong market appeal and growth potential.
At present, the price is indeed a bit high, but if you can really get Trump's WLFI, then this price may still be at the foot of the mountain, because I see that there are whales buying the chips of this coin, and the whales' holdings are visibly rising, but because of the surge in the past two days, some whales are also selling their chips, so for this coin, I suggest you observe it. After all, the circulation is low, the price is high, and it has not reached the level of a leader, so I choose to observe!
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