COW skyrocketed after being listed on Binance, is it just because of the Trump family?

Author: BlockBeats

CowSwap is the DeFi coin with the strongest growth recently. It is also one of Vitalik’s favorite DEXs. It is also a dedicated on-chain platform for large-scale shipments. It is even the DEX used by the team of Dongwang.

But what many people don’t know is that behind CowSwap lies Gnosis, an underrated top incubator in the Ethereum faction. I think this is the real reason why $COW is skyrocketing.

Recently, a piece of on-chain news in the Chinese community about the Trump team’s DeFi project World Liberty Financial (WLFI) attracted market attention. Although WLFI’s asset list does not include $COW, according to on-chain analyst Ai Ai, WLFI has used CowSwap in recent token purchases. This coincides with the habit of Ethereum founder Vitalik Buterin frequently using CowSwap.

This special on-chain behavior also directly affected market sentiment. Under the dual expectations of the "eve" of Trump's upcoming inauguration and the popularity of political concept coins, the price of $COW soared 62% in just one week, and in one month It soared 162%.

The person standing behind CowSwap is Gnosis

Gnosis is the powerful force behind CowSwap.

CowSwap's predecessor is Gnosis Protocol V1 launched in 2020, which is the first decentralized trading platform to implement ring trading through a batch auction mechanism. Its unique design allows all orders to share liquidity and complete settlement efficiently.

In 2021, Gnosis Protocol V2 launched an innovative solving mechanism (Solvers), which not only greatly improved the efficiency of order matching, but also successfully solved the MEV (Miner Extractable Value) problem that has plagued DeFi traders for a long time. In the same year, Gnosis Protocol was renamed CowSwap and became the aggregation trader we know today.

It can be said that the rise of CowSwap is inseparable from the deep accumulation of the Gnosis ecosystem. In fact, the story of Gnosis ecology can be traced back to 2015.

Gnosis co-founder Martin Koeppelmann began researching decentralized prediction markets earlier than what is now known as Polymarket. In 2015, he published his thoughts on the combination of MarketMaker and OrderBook on his forum, which was one of the earliest decentralized prediction market ideas in the industry.

Martin koeppelmann was also the earliest Ethereum developer and had already joined TheDAO before the period. Because he lived in Berlin, he had close contacts with Vitalik who was in the Berlin office at that time.

Over the years, he has participated in many discussions on the Ethereum development community page, and often discusses issues such as L2, ZK, and the Ethereum roadmap with Vitalik. From Martin's comments on social media, we can also see how integrated he is in the community.

It is based on this accumulation of technology that Gnosis has gradually developed a complete ecosystem. Evolving from Gnosis Protocol to CowSwap, Martin and his team further derived products such as Gnosis Chain, Safe and Gnosis Pay, ultimately forming a highly collaborative ecosystem.

Therefore, mutual integration is natural. The most representative one is the integration of CowSwap and Safe.

Understand the royal wallet of the Wang family

As the star product in the Gnosis family bucket, Safe is the most popular multi-signature wallet in the Ethereum ecosystem and is also a wallet dedicated to large users. When Safe launched its currency this year, almost all of the top 100 airdrop addresses were project parties or institutions.

In other words, the big users of Safe in the early days were project parties, not individual users. Including OP, Polymarket, Drukula, Worldcoin, Lido, etc.

At first, Safe's audience was more DAO and currency project parties. But as the encryption industry enters the next stage, traditional finance, traditional institutions, family funds and old money have entered the market one after another. However, the encryption threshold is high. In order to protect funds and use on-chain encryption, the safest way is to use a multi-signature wallet. Choice is Safe.

Safe's design greatly improves the security of fund management. Through the multi-signature mechanism, funds are stored in smart contract addresses, and transactions can only be executed after a preset number of signatures (such as 3/10) is met. This mechanism effectively reduces the risk of a single point of failure. Even if the private key of a signing address is leaked, it will be difficult for the attacker to obtain enough signatures to complete the transaction. In addition, during the multi-signature confirmation process, the pre-signer does not need to pay Gas for the signing operation, because the transaction is still in the "pending execution" state, and only the last address to sign and confirm the execution operation (such as transaction, transfer, etc.) needs to pay Gas. . This optimization not only reduces the cost of use, but also makes Safe the best choice for institutional users and large customers.

According to Safe Guardian’s disclosure to Rhythm BlockBeats, there are two simplest ways to determine whether the address on the chain is a Safe wallet address: one is the “MultiSig” multi-signature displayed on ARKHAM, and the other is the “MultiSig” multi-signature displayed directly below the address on the debank page. MultiSig:Safe".

 _address of trump project_ 

 _Vitalik \'s address_ 

And most importantly, as part of the Gnosis family bucket, the DEX built into Safe is CowSwap. This is why whales like Vitalik and the Trump team favor CowSwap.

Because from this perspective, what Trump, Vitalik and other big whales favor may not only be because CowSwap is an MEV-proof aggregated DEX, but also because of the synergy shown by the Gnosis family bucket, which directly meets the real needs of big players. And tailor-made solutions.

From incubator to investing in DAO

As mentioned before, the Gnosis ecosystem has been laid out since 2015. Originally a prediction market platform based on Ethereum, it later developed a Gnosis ecosystem and spawned many projects such as Gnosis Chain, Safe, CowSwap, and Gnosis Pay.

Gnosis Chain, which is a relatively famous Ethereum side chain in the previous cycle, focuses on the construction of efficient and secure decentralized applications. According to DefiLlama data, as of the time of writing this article, the total value locked (TVL) of Gnosis Chain is $349.31M, including $71.61M of native assets and $277.7M of cross-chain bridge assets. The market value of stablecoins reaches $119.98M, of which DAI accounts for 74.07%, and the trading volume remains stable.

 _Gnosis Chain data, source: DefiLlama_ 

Gnosis Pay is an on-chain payment debit card that provides users and institutions with a convenient payment experience by seamlessly integrating blockchain technology. As well as CowSwap and the multi-signature wallet Gnosis Safe (now called Safe).

GnosisDAO is the core governance institution of the Gnosis ecosystem, promoting the incubation and development of innovative projects through decentralized autonomy. After ecological incubation became more and more prosperous, Gnosis dao also began to try investment business.

In addition to incubating well-known projects such as Safe and CowSwap, GnosisDAO began to deploy in the blockchain field through its investment arm GnosisVS as early as 2019 and has supported more than 60 startups.

Investment projects include: Monerium, an on-chain fiat infrastructure for Web3 builders; Naptha AI, a decentralized platform for artificial intelligence workflows; and Schuman Financial, a MiCA-compliant stablecoin protocol.

This year, the investment business has been further expanded. In October this year, GnosisDAO approved the proposal and launched a $40 million venture capital fund. Among them, GnosisDAO invested US$20 million, and the other half of the funds came from external limited partners (LPs). This dual structure not only increases the fund's capital volume, but also creates more opportunities for external cooperation.

The fund, called GnosisVC Ecosystem, will prioritize investments in projects engaging in the tokenization of real-world assets (RWA), decentralized infrastructure and financial payment channels.

There are three key investment areas: 1. Tokenization of Real World Assets (RWA): Promote the digitization and on-chain of traditional financial assets through blockchain technology to provide more liquidity and transparency for the global financial market; 2. Decentralization Infrastructure: covering a wide range of areas from node operations to decentralized computing and storage, supporting the efficient operation of next-generation blockchain applications; 3. Payment channels and middleware: focusing on payment solutions such as Gnosis Pay, providing support for the DeFi and Web3 ecosystems Provides seamless payment capabilities.

What is the strength of CowSwap?

It can be said that the rise of CowSwap is more like the best embodiment of the collaborative efforts of the Gnosis ecosystem, but this does not mean that CowSwap itself has not created a new paradigm.

To put it in more detail, CoW Protocol is a decentralized trading protocol, and CowSwap is a DEX built based on CoW Protocol. As its front-end interface, users interact with CoW Protocol through CowSwap.

As the front-end application of CoW Protocol, CowSwap further amplifies the advantages of the protocol. It is called the "trading assistant" of CoW Protocol. It is a Meta DEX aggregator that can jump between multiple AMMs and other aggregators to help users find the best price in the current market. Unlike traditional DEXs that allow users to compare prices on their own, CowSwap's mission is to save users from tedious operations through intelligent matching and ensure that transactions are completed in the most favorable way. From this perspective, CowSwap solves a long-standing pain point faced by DeFi users: the front-end dependency problem.

The end game against MEV is the intention?

Miner Extractable Value (MEV) is a long-standing issue for traders. MEV refers to the additional value that miners or other traders extract from ordinary users' transactions by manipulating the order of transactions or inserting orders. A Galaxy Digital report estimates that MEV bots have extracted as much as $300 million to $900 million in user benefits on the Ethereum network alone.

This is very unfriendly to large traders and whale traders, and even Ethereum founder Vitalik Buterin himself caused a lot of trouble and headaches because he was often "trapped". Therefore, the MEV issue is also one of the issues that Vitalik is most concerned about during the construction of Ethereum. This issue is often mentioned in various speeches and Ethereum roadmaps.

CowSwap solves this problem very well.

In traditional DeFi interactions, user operations (such as asset bridging, exchange, staking, and withdrawal) directly interact with on-chain contracts. This design is not only complex, but also exposes the user's transaction needs, making it an easy target for MEV robot attacks. Therefore, CoW Protocol fundamentally changes this interaction model by migrating users' transaction needs from on-chain to off-chain processing. This solution is called "off-chain preprocessing", and it also has a more familiar name called "intent transaction".

The intention process is essentially an off-chain pre-processing black box. The user's intention will be placed in an "invisible" pre-processing center. After collecting and pre-processing the user's transaction needs, CowSwap introduces a third-party "solution" off-chain. Solvers" to match and process transactions. This mechanism brings multiple benefits, not only greatly reducing the risk of users directly contacting the chain, but also optimizing the liquidity management of the protocol, making user transactions more efficient, secure and private.

To be more specific, through intent narrative, CoW Protocol has designed three core protection mechanisms for the MEV problem:

1. Unified clearing price batches

CoW Protocol introduces a “unified clearing price” mechanism. When the same token pair (such as ETH-USDC) is traded multiple times in a batch, all traded assets will be liquidated at the same market price. This mechanism makes the order of transactions irrelevant, essentially eliminating the possibility for MEV robots to profit from reordering transactions. More importantly, this mechanism also solves the price inconsistency problem caused by the constant function market maker (CFMM) model in traditional AMMs (such as Uniswap), providing users with a fairer trading environment.

2. Entrusted transaction execution

User transactions are executed by secured third-party solvers (Solvers), avoiding direct exposure to on-chain MEV risks. Solvers need to ensure that the transaction price is not lower than the price signed by the user, while optimizing liquidity through off-chain matching or private market makers. This design not only reduces users’ price risks, but also greatly improves transaction execution efficiency.

3. Demand coincidence model

Compared with the traditional automated market maker (AMM) or central limit order book (CLOB) model, the advantage of CoW Protocol lies in its core auction mechanism. This mechanism allows multiple transactions to proceed simultaneously, like an efficient large-scale marketing promotion. In this event, whoever can find the best match will gain the greatest benefits. This is the so-called "Coincidence of Wants (CoWs)", and the name of CoW Protocol comes from this, cleverly spelling out the word "cow".

Therefore, driven by Gnosis's ecological flywheel and CowSwap's products, CowSwap's transaction volume on the Ethereum chain has been very rapid in the past 30 days.

Past grievances with Uniswap

Many people don’t know that CowSwap and Uniswap have some past grievances. Last year, UniswapX, announced by Uniswap, the leader of DEX, was involved in the CowSwap plagiarism controversy.

After Uniswap announced the V4 version, it immediately announced that it would launch UniswapX. However, the community was very dissatisfied with UniswapX and there was a lot of discussion. Some people directly asked: "What is the difference between UniswapX and CowSwap?" Some even jokingly said, "UniswapX should be grateful for the open source spirit of the encryption industry. .

The official account of Curve Finance made a very direct evaluation: "With all due respect. The rules of the game have changed a long time ago: when 1inch first performed high-quality aggregation, when CowSwap launched the Solvers model. UniswapX is good, but it is not Not the originator, not even the second player.”

This kind of public opinion pressure has caused Uniswap to face a lot of challenges. It seems that in order to get rid of the title of "DEX Tencent", two months ago Uniswap Labs launched the Ethereum Layer 2 network Unichain based on OP Stack, which was finally a "small" breakthrough. Return to a game.

One of the big innovations is that Unichain has made innovations in the MEV revenue distribution mechanism. Through the Trusted Execution Environment (TEE), part of the MEV revenue is directly distributed to users or liquidity providers (LP) to achieve a fairer Value sharing.

Additionally, MEV earnings are proportionally injected into the validator and user reward pools. This mechanism not only reduces the participation risk of LP, but also encourages more users to participate in ecological construction.

Wintermute is coming "stepping on seven-color clouds"

From this point of view, CowSwap's products are good, but there are many "methods" for easy-to-use products in the currency circle. Not many can be used on top trading platforms, and not many can rise 162% in a month.

If you go back in time 4 months ago, you will find that the beginning of the rising price of COW currency was the cooperation with Wintermute.

Initially, in order to increase liquidity on the chain, CoW DAO proposed to allocate 10 million $COW tokens to inject market liquidity into ETH/COW. This proposal includes an innovative strategy: part of the $COW tokens will be converted into ETH and injected into a new Function Maximizing AMM (FM-AMM) liquidity pool together with the remaining $COW. FM-AMM is different from traditional AMM in that it can effectively eliminate most MEV attacks and high profits of arbitrageurs, while reducing risks for liquidity providers (LPs).

However, on-chain liquidity alone is still not enough to meet market demand, and the deep market of centralized trading platforms is also important. After all, the market there is bigger and the money is more. At that time, the only way to obtain $COW was through decentralized channels, and the largest pool was ETH/COW on Balancer on the Ethereum mainnet. Without the CEX trading scenario, many users and institutions are unable to deploy $COW.

At this time, Wintermute came "stepping on seven-colored clouds".

Wintermute proposes to lend 7.5 million COW tokens from the CoW DAO treasury to support liquidity on decentralized and centralized trading platforms. This proposal received strong support from the community and officially opened a new chapter in $COW liquidity.

As the leading market maker in the crypto industry, Wintermute is extremely good at building efficient markets between centralized and decentralized trading platforms. Its founding team has worked at the traditional financial giant Optiver and has rich experience in market depth management.

During the months of cooperation, Wintermute provided COW with deep market support for ETH and other trading pairs, ensuring liquidity and a stable trading environment for DeFi aggregators such as CowSwap, UniswapX and 1inch. At the same time, Wintermute provides large transaction support for institutions in the OTC (over-the-counter) market, further expanding the user base of $COW.

This two-way market driving effect directly drives the price of $COW to soar.

Even in the second month after Wintermute made the market for it, Coinbase announced that $COW would be included in the currency roadmap and launched the COW perpetual contract three months later. Since then, $COW has been listed on major top trading platforms one after another, and Binance followed suit and launched the spot trading pair of COW/USDT.

These are the real reasons why I think $COW surged 162% in one month.

The flywheel effect between Gnosis ecology and Ethereum

From a more macro public chain perspective, in a bull market, the Solana ecosystem, which Wall Street is betting on, is growing very rapidly, while Ethereum is slightly weak. However, judging from the on-chain dynamics of the Trump team's WLFI project, Solana still has a lot of room for growth in serving large institutions, and the performance of multi-signature products is difficult to match the deep accumulation of Ethereum.

Although there are multi-signature products on the Solana chain, the assets under its custody are not at the same level.

Take Squads, the multi-signature agreement with the largest number of assets under management on Solana, as an example. Its current custody fund size is approximately US$170 million. As for Safe in the Gnosis ecosystem, the asset size under multi-signature custody is as high as US$89 billion.

More importantly, the products of the Gnosis ecosystem are not only amazing in scale, but also form a powerful ecosystem that can serve institutions and large customers through collaboration and deep integration. The security of Safe, the efficiency of CowSwap, and the convenience of Gnosis Pay have jointly helped Ethereum "get a breath of fresh air" in this round of public chain competition.

And more importantly, the products of the Gnosis ecosystem have formed good ecosystem service organizations and major players under the cooperation of the project, helping Ethereum to "compete for a breath" in this round of public chain competition.

It is this synergy that creates the flywheel effect between the Gnosis ecosystem and Ethereum.