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CoW DAO (COW): Community-Driven DeFi Protection

Advanced
DeFi
Explainers
Altcoins
Dec 13, 2024
13 min read
0

The decentralized finance (DeFi) industry provides a variety of crypto income opportunities for traders, including liquidity provision, token trading, lending, automated yield optimization and more. While traders' potential profits on DeFi protocols might be higher than what’s achievable in traditional finance (or TradFi), there are many sources of losses, both hidden and explicit, on these platforms. 

Despite potentially high-profit opportunities, DeFi traders have to deal with unique threats, such as maximal extractable value (MEV), sandwich attacks, loss-versus-rebalancing (LVR) and more. Few traders, even among seasoned DeFi veterans, can totally avoid losses and revenue leaks caused by these threats. For newbie traders, these unique DeFi exploits can be ruinous early in their trading careers.

CoW DAO is a decentralized platform that shields traders from a variety of DeFi exploits and inefficiencies by offering protection against MEV, LVR, transaction ordering–based manipulations and other potential sources of losses caused by parties such as arbitrageurs and malicious validators. 

The platform features a decentralized solution that finds the best prices for your crypto trades based on intent-based transactions and batch auctions — CoW Protocol — which is an MEV blocker and an automated market maker (AMM)–based crypto exchange that protects liquidity providers (LPs) from LVR.

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