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CowSwap

CowSwap is a DEX aggregator that leverages AMM liquidity (e.g., Uniswap) while using off‑chain order matching and batch auctions to avoid frontruns and sandwich attacks.
“CoW” stands for Coincidence of Wants — orders from users can directly match with each other, reducing reliance on pools and improving execution quality.

official web: CowSwap

How it works​

Off‑chain order flow​

  • User orders are sent to an off‑chain network of solvers, not directly on‑chain.
  • Solvers aggregate orders and construct optimal matching and routing strategies.

Batch auctions​

  • Solvers process orders in time‑batched groups.
  • Opposite‑direction orders can directly match; the remainder is routed to AMMs/DEXs like Uniswap.
  • Clearing within a batch avoids per‑transaction ordering attacks.

Solver competition​

  • Multiple solvers compete to provide the best price and execution strategy.
  • The winning solver’s plan is used, giving users optimized pricing and routing.

Strengths and challenges​

Strengths​

  • Batch processing significantly limits sandwich opportunities.
  • CoW matching reduces slippage by offsetting user orders directly.
  • As a cross‑DEX aggregator, it efficiently uses liquidity from many venues.

Challenges​

  • Heavy reliance on solvers; not fully decentralized.
  • Batching can be less suitable for users who require immediate execution.
  • Execution quality depends on solver algorithms and competition.

Outlook​

  • Considered a “third approach” complementing AMMs (sandwich risk) and order books (liquidity constraints).
  • High extensibility by combining liquidity from existing DEXs; seen as an evolved DeFi aggregator.
  • As solver competition matures, users could consistently enjoy better prices and fairer execution.

Summary​

CowSwap avoids AMM sandwich attacks through off‑chain batch auctions and matching. It offers a promising alternative design to AMMs and order books for mitigating these attacks.