ShapeShift integrates with CoW Protocol to provide end-to-end decentralized trading
ShapeShift is integrating CoW Protocol directly as its main router in their DEX offering for Ethereum.
You might have seen a preview of the integration a couple of weeks ago when ShapeShift DAO applied for an implementation grant from the CoW Grants Program, and now it’s finally here! Let’s dive into the details and see why this collaboration is very important for traders and for decentralization of the trading space.
CoW Protocol is a powerful trading protocol that uses batch auctions as its price-finding mechanism to facilitate peer-to-peer trading via Coincidence of Wants (CoW), or tapping into your favorite AMMs and DEXs when no CoW is found. In short, CoW Protocol gives its users permissionless, price-effective trading by allowing them to swap their assets at the best rate possible, while still enjoying full protection from MEV through the enforcement of uniform clearing prices within a batch. CoW Protocol’s network of solvers compete against each other to find the most optimal settlement for all the trades within a batch, and the solver that finds the biggest price improvement for the users wins the right to settle the trades.
Since 2014, ShapeShift has been pioneering self-custody for digital asset trading. Today’s ShapeShift DAO is an engaged community of builders working to advance the state of crypto trading, investing, and access to open, decentralized financial systems. Their web and mobile platforms empower users to safely buy, hold, trade, invest, and interact with thousands of digital assets such as Bitcoin, Ethereum, and Cosmos.
With the integration of CoW Protocol as a settlement mechanism for the ShapeShift DEX, ShapeShift users will benefit from the union of best-price trading, safety, and security (gasless, protection from MEV, etc.). ShapeShift DAO’s community-owned DEX will now direct all its user trades to CoW Protocol, thus allowing their users to get benefits such as protection from MEV, better pricing for the traders, and the capability to trade gasless. DeFi traders will now be able to access CoW Protocol from a decentralized front-end, knowing that their trades are both cost-effective, MEV-protected, and secure.
ShapeShift decided to integrate CoW Protocol because of the advantages that come from leveraging a decentralized batch auction settlement competition as a core mechanism for settling trades in Ethereum. ShapeShift’s users will now shift from sending raw transactions into the mempool to signing messages with their trade intents. Through the use of batch auctions, these intents are aggregated together and executed in a single transaction that has to enforce certain economic design in regards to pricing the trades within a batch. Using intents to trade allows the orders to be more malleable and thus execute CoWs, or ring-trades with the intention of re-aggregating the liquidity of the orders to avoid unnecessary fees.
We’re excited to see how the combination of both tools can take DeFi to the next level.
If you’re interested in learning more about how you can improve trading for your users via MEV-protected batch settlements, talk to the CoWs. Join our forum / Discord — we would love to hear from you, and we need your ideas.
About CoW DAO
CoW DAO is an open organization of developers, traders, market makers, and other community members focused on building, maintaining, and advancing fair and decentralized trading systems — principally through its work on CoW Protocol.
CoW Protocol is a DEX aggregation protocol that powers a network of independent solvers which, in turn, enable trustless and efficient peer-to-peer trading. Leveraging batch auctions uniquely positions CoW Protocol as native trading infrastructure for discrete-time settlement layers like Ethereum and enables fair and accessible trading to its users.
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