CoWSwap on Avalanche: A New Era of MEV-Protected Trading
Learn how CoWSwap eliminates frontrunning, backrunning, and sandwich attacks for Avalanche traders using MEV protection and solver-based execution.
Avalanche continues to attract top-tier DeFi protocols, and the latest to join its growing network is CoWSwap. Known for its innovative MEV protection and efficient trade execution, CoWSwap is now live on Avalanche, bringing with it a fresh approach to secure and user-friendly decentralized trading. Let’s take a look under the hood.
CoW Swap's Philosophy and Types of Trades
Built on the CoW Protocol, which is short for "Coincidence of Wants,” CoW Swap operates as a DEX aggregator. The CoW concept refers to the idea that two traders may want opposite sides of the same trade (e.g., swapping USDC for ETH), and if matched directly, they can both get what they want without routing through traditional liquidity pools.
Instead of relying on real-time onchain execution, CoW Swap uses batch auctions which group many trades together and settles them offchain at the same time. This makes it harder for bots to exploit individual transactions and helps users get better prices.
It also relies on intent-based trading. Instead of sending a trade directly to the blockchain like you would on Uniswap or SushiSwap, CoW Swap lets you create a signed message that says what you want to trade (specific tokens and amounts). This message is called an “intent.” It doesn’t execute the trade right away. Instead, it tells solvers what you’re trying to do.
Solvers are specialized market participants who compete to fulfill user trades as efficiently as possible. They may source liquidity from different DEXs or match traders directly. Solvers earn a small fee when they provide the best execution, incentivizing them to continuously improve performance.
CoWSwap executes the following categories of trades:
Market Orders
A market order is the fastest way to make a trade. You’re saying, “I want to buy or sell right now at the best available price.” The trade goes through immediately, but you might get slightly different prices than expected if the market is moving quickly.
Limit Orders
With a limit order, you set the price you’re willing to buy or sell at. The trade will only happen if someone is willing to match that price (or better). It gives you more control, but the trade might not happen right away, or at all, if the price never reaches your target.
TWAP Orders (Time-Weighted Average Price)
TWAP breaks a large trade into smaller parts and spreads them out over time. This helps you avoid causing big price swings that can happen if you try to buy or sell a lot all at once. It’s useful for getting a more consistent average price.
Programmatic Orders
These are smart trades that follow custom rules. For example, you could set up an order that says, “Buy only if the price drops below $10 and volume spikes by 20%.” It’s like having an automated strategy that reacts to market conditions.
Milkman Orders
Instead of relying only on DEX pricing, these orders use trusted external oracles to get more accurate or fair prices. Intended for DAOs, this helps protect them from price manipulation and temporary spikes on trades that are likely executed in the future.
CoW Hooks
These let you add extra steps before or after a trade. For example, you might want to unstake tokens, do a swap, and then bridge to an L2 after the trade completes. It’s basically like a to-do list for your trade.
This variety of order types gives Avalanche traders control and flexibility when executing trades.
Value to Avalanche Users: MEV Protection and Efficient Trading
What is MEV?
To understand why CoW Swap is such a big deal for Avalanche users, it helps to first break down MEV, or Maximal Extractable Value. MEV refers to the hidden profits that can be extracted by manipulating how transactions are ordered on a blockchain. These profits are typically captured by bots or validators and come at the expense of everyday users.
Here are a few common MEV attack strategies explained simply:
Frontrunning: Imagine you’re trying to buy a token. A bot sees your transaction coming and jumps in ahead of you, buying the token first and selling it back to you at a higher price (rude).
Backrunning: After a trade is executed, the price of a token may shift. In a backrunning attack, a bot watches for these trades and quickly jumps in after them, hoping to profit from the price change the original trade just caused. It’s like tailgating a large trade to ride the wave of price movement for a quick gain.
Sandwich Attacks: This is when a bot places one transaction before and one after yours, effectively “sandwiching” your trade. It profits off the price movement your trade creates in both directions, leaving you with a significantly worse deal.
These attacks hurt traders by inflating costs, distorting prices, and generally degrading the fairness of DeFi markets.
How CoW Swap Solves This on Avalanche
CoW Swap helps stop these attacks by using batch auctions and off-chain intents. Since trades are grouped and settled at the same time (not individually in the mempool), MEV bots can’t front-run or sandwich anyone because they can’t see the transactions coming ahead of time. By handling trade intentions off-chain and only executing finalized orders, CoW Swap cuts off the visibility that bots rely on to exploit users.
This protection is especially valuable for Avalanche users, where fast execution and low fees already make it a popular home for DeFi activity. CoW Swap adds another layer of security, helping to ensure that what you see is what you get, without worrying about being gamed by unseen actors.
Gasless Trading
Users don’t have to pay gas fees directly. Instead, you pay a transaction fee in your sell token without needing to hold the chain-native token (like AVAX) in your wallet.
Optimal Pricing
With multiple DEXs and matching options available, CoW Swap easily finds better prices than single-source platforms.
Additional Products: CoW AMM and MEV Blocker
CoW DAO, the organization behind CoW Swap, also offers other tools aimed at fairer trading:
CoW AMM: A next-generation automated market maker that protects liquidity providers from MEV-related losses by redistributing captured MEV back to LPs.
MEV Blocker: A public RPC (remote procedure call) service that routes your transactions through a private network of trusted builders, shielding them from frontrunning and sandwich attacks. It even shares a portion of profits from backrunning opportunities with users.
These tools reflect CoW DAO’s broader mission of protecting users and making DeFi more equitable.
Final Thoughts
With CoW Swap now deployed on Avalanche, users can access cutting-edge trade execution, multiple order types, and built-in MEV protection, without sacrificing performance. Combined with CoW DAO’s other products like MEV Blocker and CoW AMM, this marks another step toward a more secure, user-friendly DeFi ecosystem. Expect more projects like this to find a home on Avalanche as the network continues to mature.
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