Solvers
Solvers are critical infrastructure in CoW Protocol — off-chain agents that monitor the order pool for new and existing orders and compute optimal settlements by finding clearing prices and trade routes.
Key Responsibilities
Solvers perform five primary functions:
- Monitor incoming orders from the order pool
- Calculate optimal trade settlements and clearing prices
- Access liquidity from various sources (AMMs, aggregators, private inventory)
- Submit settlement transactions on-chain
- Earn fees upon successful execution
Authorization and Security
Only approved solvers can call the settlement function through the GPv2AllowListAuthentication contract, which maintains an allowlist managed by a designated manager role.
modifier onlySolver {
require(authenticator.isSolver(msg.sender), "GPv2: not a solver");
_;
}
The manager role has significant power over the protocol. It should be assigned to a multi-sig wallet or DAO.
Competition Mechanism
Multiple solvers submit solutions simultaneously, and these are ranked by:
- Trader surplus generated - How much better the execution is compared to limit prices
- Number of orders filled - More filled orders is preferred
- Gas efficiency - Lower gas consumption for the same outcome
- Execution success probability - Likelihood of on-chain execution success
Solver Economics
Revenue Sources
- Protocol fees
- Surplus capture (executing at better prices than order limits)
- CoW finding (matching orders directly without external liquidity)
- Arbitrage opportunities
Risks
- Transaction failures (gas costs without revenue)
- MEV extraction by block builders
- Price slippage between solution computation and on-chain execution
- Competition from other solvers
Technical Details
Solvers interface with external liquidity sources through standardized interaction structures supporting three execution phases:
// Pre-settlement: Setup operations
const preInteraction = {
target: "0x...", // e.g., approve token
value: 0,
callData: "0x...",
};
// Intra-settlement: Trading operations
const intraInteraction = {
target: "0x...", // e.g., Uniswap swap
value: 0,
callData: "0x...",
};
// Post-settlement: Cleanup operations
const postInteraction = {
target: "0x...", // e.g., unwrap WETH
value: 0,
callData: "0x...",
};
