Cowswap

• Trades via batch auctions
• User orders are consolidated in order book before sending to a driver who acts as a auctioneer.
• Orderbook and the driver are centralised component in the cowswap architecture.
• Solvers compete to create a solution to a batch maximising the total surplus for users. Surplus = Execution price - Limit price
• Solvers sends their results back to the driver who sorts and ranks them and settles the winning batch on chain
• Solvers can use any liquidity source or strategy to win the auction, can use their own inventory or private orderflow
• CoW - Coincidence of Wants , when buyers and seller can be matched directly. This is cheaper, more price efficient for parties but happens rarely as of now
• Introduced hooks to add more programmability
• In April of 2022, solving on Cowsap was dominated by aggregators like 1inch, 0x, CoW’s aggregator, and paraswap. Now, it’s dominated by professional solvers like Otex, Laertes, Seasolver and more.
• Coswap also suffered a hack though no funds were stolen
• CoW Hooks
  • Through hooks we can take multiple DeFi actions: swapping, bridging, staking, depositing, borrowing, and more — & group them all together into one single intent!
  • CoW Hooks are arbitrary Ethereum “calls” that attach to an order and execute before and/or after the order. Developers and advanced traders can use code to express an intent that performs some action before a swap (pre-hooks) and after a swap (post-hooks).
  • Hooks use cases -
    • Repaying a debt and staking
    • Opening a LP position (Swap some assets for eth, open a liquidity provider position in the post hook)
    • NFT sniping and selling
    • unstaking and restaking

1inch Fusion

• As DEX aggregators like 1inch lost market share in the intents game, 1inch responded by creating 1Inch Fusion.
• Fusion is similar to CoW Swap, the main difference being that Fusion utilizes Dutch auctions vs. CoW Swap’s Single Block Batch Auctions.
• Fusion which went live at the end of 2022 has 15% of 1Inch volume. Fusion is the default at their front end.
• In Fusion, users sign off-chain orders (intents) which are then sent to a network of solvers who can fill the Dutch auction at any time. In a Dutch Auction, prices start high and then decline over time.