Trump team's "designated" DEX CoW Protocol: Exclusive aggregator for large investors, generated $6 million in revenue last year but still incurred lo

Author: Frank , PANews

Recently, the Trump family's crypto project World Liberty has significantly increased its holdings of Ethereum and other assets, with almost all operations conducted through the CoW Protocol, suggesting a particular affinity for this aggregator. Additionally, Ethereum founder Vitalik and the Ethereum Foundation frequently use CoW Protocol for asset transfers and transactions. However, for ordinary users, the CoW Protocol is clearly less well-known than DEX products like Uniswap and 1inch. It was only recently, due to the Trump family's usage, that attention towards CoW Protocol has risen, and its token COW surged by up to 392% from November 6 to December 25 after Trump's election.

DEX's "OTC Market" Favored by Whales

CoW Protocol was created in 2020, incubated by the Gnosis team, which builds Ethereum infrastructure, and its founder Anna George is also the business director of Gnosis. From 2016 to 2017, Anna George served as a monitoring and evaluation expert for the United Nations.

As of January 23, data shows that even after a noticeable increase, CoW Protocol's daily active users have only reached over 1,000. Previously, the daily user count was only in the hundreds. However, in terms of cumulative trading volume, the project has reached $77 billion, ranking seventh in the Ethereum ecosystem. In December 2024, CoW set a record with $7.8 billion in trading volume, and with approximately 1,600 daily active users in December, the average transaction amount per user on CoW reached $4.87 million. This indicates that CoW serves as a dedicated trading pool for whales.

CoW Protocol has several technical features, primarily eliminating MEV and low trading friction. The most distinctive core technology principle used is the "demand matching" mechanism. Without going into too much technical detail, this mechanism resembles an on-chain OTC market, bypassing AMM liquidity pools to directly match two whales with the same demand for pricing transactions. This effectively reduces on-chain MEV and trading friction to nearly zero.

For users making transactions worth millions or even tens of millions of dollars, this mechanism addresses pain points and minimizes market price impact. This explains why the Trump family's project World Liberty chose to allocate assets through CoW Protocol. At the same time, the Ethereum Foundation and Vitalik are also keen on using this project, with the Ethereum Foundation frequently selling tokens through CoW.

On the other hand, ordinary users may prioritize aspects such as transaction speed, variety of trading pairs, and flexible trading pools. In comparison, CoW Protocol's matching mechanism does not excel in these areas. However, this is not significant; it seems that CoW Protocol was initially designed specifically for whales.

Data Has Indeed Improved, Aiming to Increase Revenue Levels

Recently, CoW Protocol has benefited from the World Liberty project, with its governance token COW starting from November 6, skyrocketing from a low of $0.25 to a high of $1.23, with a maximum increase of 392%.

The COW token was issued and launched back in 2022, with an initial opening price of about $0.8. Over the following year, the price fell significantly, reaching a low of $0.062, and it wasn't until 2023 that it began to recover, mostly hovering below $0.4. It wasn't until September 2024 that Coinbase announced the introduction of CoW Protocol into its listing roadmap. On November 6, multiple exchanges, including Binance and Bybit, listed COW. Interestingly, this day coincided with Trump's victory in the 2024 U.S. election. It is evident that various exchanges have included COW as part of Trump's related assets, and the election result immediately triggered market enthusiasm.

However, after Christmas, the price of the COW token began to decline. As of January 23, its price had dropped to around $0.63, representing an overall correction of nearly 50% from its peak.

Aside from the traffic effects brought by the hype, CoW Protocol's data performance has shown significant growth in recent months. The most notable aspect is trading volume, which has remained in the range of $2 billion to $3 billion per month since the beginning of 2024. Starting in November, this figure surged to $6.2 billion, reaching a historical high of $7.8 billion in December. Throughout 2024, CoW Protocol's market share among Ethereum ecosystem aggregators has consistently ranked below 1inch, placing second. However, on January 23, 2025, the monthly data performance surpassed 1inch for the first time, ranking first. The final rankings for both may not be clear until early next month.

On January 22, Cow DAO released the CIP-61 proposal on Snapshot, attempting to further regulate CoW Protocol's fee model and ratios to achieve better revenue levels. According to the proposal, CoW Protocol generated approximately $6 million in revenue in 2024 but still failed to break even, with development costs ($4.4 million), grants ($700,000), and solver rewards ($5.2 million) for the year. Therefore, Cow DAO hopes that this proposal can optimize users' transaction execution prices and create more additional value to achieve break-even as soon as possible, freeing itself from reliance on external funding.

According to CoW's official dashboard, Cow DAO's cumulative revenue amounts to 3,648 Ethereum, which, at an Ethereum price of $3,300, totals about $12 million. In the Ethereum ecosystem, CoW Protocol's revenue level ranks around 50th, which is indeed low for an aggregator that has been operating for four years and ranks among the top in trading volume.

With the recent overall data improvement, the CoW team clearly hopes to seize the current market opportunity to achieve new milestones. Currently, the proposal has passed smoothly, but discussions on social media have not been very heated. The token market has not shown significant price fluctuations as a result. Perhaps for the CoW team, capturing whales only requires targeted products and designs, but attracting the general public seems to be much more challenging. For ordinary users and token investors, the complex proposal expressions appear far less appealing than a simple airdrop.