CoW Swap Launches Combinatorial Auctions to Enhance Trading Efficiency and Rewards
CoW Swap, a decentralized exchange aggregator, plans to introduce Combinatorial Auctions to enhance transaction capacity and rewards for trade facilitators. Key points include:
- Combinatorial Auctions allow multiple solvers to collaborate on trades, optimizing swap efficiency.
- The existing auction system only permits one solver per auction, creating delays for others.
- The new feature, approved by a DAO vote, may increase order throughput by approximately 33% as competition with rival aggregator 1inch intensifies.
- CoW Swap currently competes closely with 1inch, each handling around $2 billion in weekly trading volume on Ethereum.
- Unlike traditional DEXs, CoW Swap uses a peer-to-peer system to match trades, reducing the risk of maximal extractable value (MEV) issues.
- Solvers' average rewards could rise by about 25%, but excessive payouts without increased trading volume may impact protocol efficiency.
- Testing is expected to begin around May 20, with full deployment anticipated by June 3.