GIP-13 (Phase 2): CowDAO and COW Token

GIP-13 (Phase 2): CowDAO and COW Token

GIP: 13
title: Gnosis Protocol Token
author: Chen Magen, Anna George
status: Phase-2
type: Meta
created: 2022-01-06

Note :mega:: This proposal post has been revised to reflect new branding for Gnosis Protocol. The protocol is intended to be renamed to Cow Protocol and the proposed governance token to COW token.


Should Gnosis DAO spin out the Cow Protocol Team and deploy CowDAO and the COW Token?

  • Let’s do this!
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0 voters


Cow Protocol is a fully permissionless trading protocol that leverages Batch Auctions for matching orders. The Protocol is uniquely designed to maximize liquidity via Coincidence of Wants (CoWs) as well as allowing a flexible use of additional liquidity sources whenever needed.

As GIP-13, a proposal to spin out the Cow Protocol Team and launch a COW Token, has received overwhelmingly positive feedback, we’re going ahead and moving this proposal to phase 2.

Phase 2 of this proposal will expand on what has been outlined in phase 1, with additional proposed details for the launch of CowDAO and its COW governance token.


This section provides a short summary of the proposal and highlights updates for people who have read phase 1 previously.

The following updates stand out:
Branding: as the team is spinning out, we will no longer refer to the product as Gnosis Protocol. Instead, we will leverage the established branding of CowSwap, though adding a touch of seriousness by referring to it as the Coincidence of Wants Protocol, in short the CoW Protocol. The new token will be referred to as COW.

Gnosis DAO share: as proposed in GIP13-Phase1, Gnosis DAO will receive 10% for their previous efforts in establishing the Cow Protocol team. Half of this amount will be linearly vested to Gnosis DAO over 4 years. The other half will be transferred to Gnosis DAO immediately BUT can only be used under a 4 years linear vesting schedule. It is expected that Gnosis DAO will launch lock contracts for GNO token holders to lock their GNO in return for vested COW Tokens.

Team share: the team share will be increased from initially envisioned 12% to 15%. This will ensure that the team has the capacity to sufficiently attract more talent in the future.

Advisory share: we are introducing an advisory share of 0.6%. A few people not linked to the Cow Protocol Team are contributing to the project beyond expectation and will receive a small token of appreciation.

Unused investment options (not KYC’ed): 10% of the total token supply are given to GNO Token Holders (5%) and Cow Protocol Traders (5%). It is expected that not all options will be leveraged. The COW Tokens that are earmarked for investment options but not leveraged, will be used for liquidity incentives of the respective token pairs: COW tokens not bought by GNO Token Holders will be used to incentivize a COW<>GNO pool; COW tokens not bought by Cow Protocol Traders will be used to incentivize a COW<>ETH pool.

Unused investment options (KYC’ed): the private investment round waives any legal contracts in favor of a fully decentralized, smart contract based setup. In the unlikely case that some investors are not leveraging their investment options, the remaining funds can be offered to other parties to ensure the funding goal of the team can be met.

Claiming on Gnosis Chain: it is Cow Protocol’s mission to reduce fees for users but doing an airdrop on Mainnet would unfortunately cost an estimated $2M in fees for users to claim. This makes it unattractive for smaller participants to participate in the investment round or claim their airdrops. As we would like to be inclusive, we propose to launch investment options & airdrops which are smaller than a certain size exclusively on Gnosis Chain where gas costs are marginal.

NON-transferable token: at launch the token will be a pure virtual token for governance. This implies that the token will not be transferable. However, it is up to CowDAO to vote on whether making the token transferable complies with applicable laws.

Link to the Github repo: the deployment code has already been audited. The community is encouraged to review the code before moving the proposal to its final stage: GitHub - gnosis/cow-token: Repository containing the CowSwap Governance Token smart contract

What is CowDAO envisioned to be

CowDAO is an open organization of developers, traders, market makers and many more community members aligned with its vision. CowDAO is focused on fair and decentralized trading systems - in particular, building, maintaining and advancing the Cow Protocol. Cow Protocol technology powers a network of traders and solvers, enabling trustless and efficient peer-to-peer trading. Leveraging batch auctions as a key concept uniquely positions Cow Protocol as native trading infrastructure for discrete-time settlement layers like Ethereum and enables fair and accessible trading to its users.


We foresee a future where increasingly all kinds of assets will be tokenized on Ethereum and other decentralized blockchains, where everyone - individuals and collectives - can have full custody of their tokenized assets. CowDAO’s vision is a decentralized future where digital assets can be traded in a fair, efficient and reliable manner among people and communities around the world. Our mission is to build a protocol that becomes the most user friendly and price effective way to exchange digital assets, enabling all users to trade securely and know their trades are protected.
We are determined to make Cow Protocol the foundational liquidity hub for trading digital assets by applying continuous innovation, cultivating intellectual bravery and by expanding the CoW Protocol ecosystem - inviting the brightest minds to join the community.

Values and Principles

This section should not limit the scope of what CowDAO can pursue or achieve. The community should keep iterating on its values and principles to best reflect each and every member individually and the DAO as a whole.

Below are work in progress principles that we propose should guide the way we behave as a community and help shape the decision process for CowDAO.

  • Universal Simplicity
    The goal of Cowswap is to allow easy access to the decentralized economy across all levels of experience, the Cowswap community will focus on simplicity and high quality user experience across DeFi and Web3.
  • Decentralization and Access to everybody
    Cow Protocol is permissionless for anyone to access with no discrimination. The Cowswap community will reward alternative UIs and gateways to the protocol in order to ensure easy worldwide access and usability in accordance with applicable laws.
  • Open Collaboration
    CowSwap should be a core part of Ethereum and Web3, we believe this can be achieved by openly collaborating with other teams, protocols and communities in the decentralized ecosystem. Education, information sharing and aligned partnerships are key drivers to build out the CowSwap ecosystem.


The COW token will entitle its holders with voting rights in CowDAO. The main purpose of CowDAO is to govern and curate essential infrastructure components of the CoW Protocol ecosystem, including:

System Parameters - CowDAO will be in charge of all system parameters such as the objective function for solution scoring and solver slashing conditions.

Treasury holdings and Protocol revenue - Allocation of treasury holdings, distribution of Protocol revenue and investing into ecosystem projects.

Staking - CoW Protocol solvers will be incentivized to compete for providing best solutions by capturing value for participation. This could come in the form of trading fees, solution token rewards or both. Solvers could be required to stake COW in order to participate in solution submission.

CoW Protocol users will be able to lock COW tokens for a fee discount on their trades. This gives tangible utility to the tokens benefiting all GP trades.

Fees and Rewards - Traders, solvers, frontends, developers and other ecosystem participants should always remain sufficiently incentivized to continue contributing and maintaining a robust ecosystem. Incentives could come in the form of batch solution rewards, trader incentives, ecosystem grants and more.

It will be up to the Cow DAO to decide on the fee structure. Here, a modular token model can be envisioned, where every successful batch is being rewarded with an adjustable dedicated amount of COW tokens. While this model might be inflationary at the start - where the batch reward is higher than the accrued fees, it would shift to a deflationary model as soon as the accrued fees are higher than the batch reward.

Proposed Governance Parameters for CowDAO Launch

  • CowDAO proposals will be discussed on CowDAO’s dedicated Forum, consisting of two phases: forum discussion and snapshot voting.
  • Final approval of proposals will be made through vCOW token voting on the cow.eth snapshot space that will be deployed upon GIP-13 successfully passing.
  • A maximum amount of 560M vCOW tokens will become available, out of which it is estimated that up to 350m vCOW tokens might be used for voting initially. A quorum is proposed that would require roughly 10% of this supply for approving CowDAO Improvement Proposals (CIP). This is defined by a set limit of 35m COW tokens required to vote YES in order for a proposal to pass.
  • Additionally, in order for a proposal to be approved, YES votes should account for >50% of total participating votes. (simple majority)

COW Token

In order to enshrine Cow Protocol as a community owned project, we are proposing to launch CowDAO and the COW governance token. We consider CowDAO and COW token as an essential tool to ensure the Protocol is not captured by rent seeking players, that it stays neutral and true to the values and needs of its traders. We believe introducing a COW token would firmly establish Cow Protocol as a public good and community-owned trading infrastructure. If the community votes in favor of this proposal, COW tokens will be distributed to stakeholders of the Cow Protocol ecosystem that are interested in shaping the future of permissionless trading.

Token Supply

At genesis, 1 billion COW Tokens are proposed to be minted. While the token supply would be fixed at launch, the token contract would be written to allow for inflationary supply. This functionality could be activated by the DAO in the future. Allowing for an inflationary supply guarantees that solvers can be economically incentivized long term, but more importantly allows for a more fine grained economic system that can shift from an inflationary supply to a deflationary supply.
A model can be envisioned where every successful batch is being rewarded with a fixed amount of COW, while this model might be inflationary at the start - where the batch reward is higher than the accrued fees, it would shift to a deflationary model as soon as the accrued fees are higher than the batch reward and the excess could be used to buy back and burn COW.

Token Distribution

This proposal is about whether a COW token should be implemented. In the following we outline specification ideas as to how such tokens could be distributed, assuming the proposal to issue COW tokens finds support within the community and will end up being implemented. This proposal is open to discussion and invites alternative suggestions. The usage of the future tense in the following is used for clarity but should not detract from the proposal being dependent on the community’s input and support.
When designing the COW Token distribution model, we followed this principle:

Gnosis DAO (10%)
Gnosis DAO as creator of the Cow Protocol Team funded and enabled the continued research and development of Cow Protocol and should therefore receive a significant share of the newly created token that ensures Gnosis DAO and its members are able to benefit from the success that Cow Protocol might accrue in the future. 5% of this allocation will be vested to Gnosis DAO over four years. The remaining 5% will be allocated to Gnosis DAO with the intent to be distributed to GNO holders that commit to lock their GNO (regardless, four years of vesting schedule has to be maintained).

Retroactive airdrop to early adopters (5%) and GNO token holders (5%)
5% will be airdropped as reward to Cowswap’s early users and community members who already contributed significantly to the success of CoW Protocol and allow them to have a voice in carving the future of the Protocol and its community. An additional 5% will be airdropped to GNO token holders as direct reward for their support and investment in Gnosis DAO.

External investors and partners (10%)
Those would include VCs, angels, market makers and integration partners. VCs and angels are entities/individuals specialized in helping early stage ventures to succeed, they are expected to contribute significantly to the success of CoW Protocol via active governance participation, leveraging their network to kick off relevant partnerships, writing research articles and other means to spread the message about CoW Protocol. Market makers and integration partners play a significant role in bringing more liquidity to CoW Protocol, some of these are expected to run their own solver or interface. Enabling partners to invest at an early stage in CoW Protocol will help create economic alignment and strengthen our long term partnerships.

Investors will be given options to invest in a fixed valuation and ticket size. Investment options are not transferable and will only be available during a specified time period, at the end of which the vesting period will begin.

Community Investment for early adopters (5%) and GNO token holders (5%)
Many community members are contributing to the overall success of Cow Protocol! We believe that they should receive the same opportunity as other investors to invest early in CoW Protocol. Therefore we propose an airdrop of investment options to CoW community members that enable them to invest under the same conditions as other investors (same valuation, same vesting schedule).

GNO token holders should also be eligible to participate in the early investment round and will therefore get an equal share of investment options airdropped. GNO token holders will be required to use GNO to make their investment, this will provide the Cow DAO with an initial share of GNO tokens which should further align the incentives between the two DAOs.

All investments would have a 4 years linear vesting period with no cliff.

It is expected that not all options will be leveraged. The COW Tokens that are earmarked for investment options but not leveraged, will be used for liquidity incentives of the respective token pairs: COW tokens not bought by GNO Token Holders will be used to incentivize a COW<>GNO pool; COW tokens not bought by Cow Protocol Traders will be used to incentivize a COW<>ETH pool.

Team allocation (15%)
The Cow Protocol Team has launched and shaped the protocol and is expected to continue to play a significant role in the future development of CoW Protocol and the decentralisation of its ecosystem; vesting tokens should further establish incentives for this.
The team share would have a 4 years linear vesting period with no cliff.

Cow DAO treasury (44.4%)
The treasury allocation will be in the hands of the community. This allocation is a vehicle for rewarding future ecosystem contributions. Some tokens could be used immediately after token launch to incentivize the three key contributors to the GP ecosystem: solvers, traders and integrations (other interfaces channeling their order flow to GP).


The Cow Protocol Team is convinced that launching CowDAO and its respective COW token will significantly increase the success of the Cow Protocol. In this Forum post we have laid out a concrete token proposal, its distribution and a reward structure for Gnosis DAO and the GNO token holders. The proposal aims to reward Gnosis DAO and GNO token holders for their continuous efforts in bootstrapping the Protocol, align their economic incentives, and provide them a gateway to become active stakeholders of the Cow Protocol ecosystem. As the idea for a Cow Protocol specific token has received overwhelmingly positive feedback from the community in this forum, we have moved this proposal to phase 2 and encourage everyone to participate in the forum poll.

Proposed Technical Details

Initial deployment

The proposed deployment code is published in this proposal. Improvements may be proposed by the community. If this proposal is successful in Phase 2, the final code will be included in phase 3 of GIP-13. Its deployment will be triggered via the SafeSnap Module, dependent on successful passing of GIP-13.

The deployment is planned to include the deployment of two Gnosis Safes for CowDAO (the CowDAO’s main Safe and a nested Safe for the funds of the private round) as well as a custom built non-transferable vCOW token.

Successful approval of GIP-13 by GNO token holders will result in deployment of the following smart contracts:

  1. CowDAO primary Gnosis Safe - Controlled by vCOW snapshot space. n/m signers will be added as a safety measure. Public investment options proceeds will be sent to this Safe, as well as the COW token contract admin rights.
  2. Secondary Gnosis Safe - Controlled by the CowDAO’s primary Gnosis Safe as 1/1 signer. It will be used to manage the private KYC-ed investment proceeds.
  3. vCOW token contract - This will be deployed as a custom ERC-20 contract. It will include all standard functions so it is recognized by wallets and tooling as an ERC-20 token, but it will not allow transfers. Additionally the contract will include:
    • The Merkle root for the complete allocation Merkle tree
    • Additional functions that allow participants to prove their inclusion in the tree and claim their vCOW tokens.
    • Claiming is time limited to the date specified in each allocation (2 weeks for investment options; 6 weeks for airdrops). No claiming or option exercising is possible after the deadline. Exercising partially is possible but no changes can be made after deciding and exercising a partial amount.
  4. COW token contract - standard ERC-20 token for which the CowDAO Safe will hold the initial total supply. Once CowDAO is live, vCOW token holders will be able to propose and vote on enabling the conversion of vCOW into COW tokens, if they consider making the token transferable conforms with applicable laws.


The plans outlined in this proposal are subject to discussion and change. They may also need to be (re)structured to take account of legal, regulatory, or technical developments as well as governance considerations. This document should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in any transactions. You are solely responsible for your own investment decisions and transactions.
The decision to spin out CowSwap and to launch a COW token lies solely with the Gnosis DAO. Consequently, this document only describes the token launch process and its technical implementation as envisaged following several discussions in the Gnosis DAO forum.

Edit (26/01/2022): Added Proposed Governance Parameters for CowDAO Launch


Has an ‘early adopter’ been defined yet? In the phase one proposal it was hotly contested on what should be considered an early adopter, but I don’t recall ever seeing a definitive answer.


I’m surprised there was no mention of gnosis chain validators anywhere in Phase 2. Was that just an oversight?


If possible validators will be considered

1 Like

Not bad … please explaind early supporter

I strongly like this plan as proposed.


Airdropping on Gnosis Chain for small holders. It’s great to see this focus on inclusiveness.

If it were me, I’d even go one step further and do the entire airdrop + investment option on Gnosis Chain.

  1. it seems technically easier and safer than to maintain two different investment/airdrop options. If there is a cutoff, it may not be to everyone’s liking, especially with untransferrable tokens that will initially have no market value.
    i.e., even someone with 300 ETH isn’t necessarily keen on spending $100 in gas for an airdrop that can’t be traded yet. Whereas doing the entire airdrop on Gnosis Chain, there would be no downside to claiming right away, thanks to negligible fees.

  2. it’s an opportunity to encourage everyone to try out Gnosis Chain, and perhaps participate in the greater ecosystem. It could help jumpstart a positive loop benefitting both Gnosis and CowSwap.

  3. anyone aligned with Gnosis/CowSwap should be comfortable with the security properties of Gnosis Chain anyway, and can easily bridge back to mainnet if not.

Having governance tokens initially non-transferrable is a great way to encourage governance (duh) over speculation. Giving the protocol a chance to set the tone as a decentralized autonomous organisation, in those early stages that tend to define what is next to come.

Locking COW tokens for a trade fee discount might be the best idea of this proposal yet. There is already a virtuous loop with CowSwap of discovering the protocol, then realising there is really no reason not to route any swap through CowSwap.

Add in a fee rebate with locked tokens, and this adds to the dynamic: if I’m going to route most of my swaps through CowSwap, I might as well lock some COW for rebates. And once I locked some COW for rebates, I am even more incentivised to use CowSwap by default.

A+ plan. Great job!


For the love of god, please don’t call the protocol CP and its users CP users. Have you all lived under a rock the past decade? :exploding_head:


How about CowP? I’m down for being a CowPee user.

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We would still be mocked but I would prefer that kind of mockery over the other.

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The irony…


cow token name ? $MILK !


Add more network !!!

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Branding: as the team is spinning out, we will no longer refer to the product as Gnosis Protocol. Instead, we will leverage the established branding of CowSwap, though adding a touch of seriousness by referring to it as the Coincidence of Wants Protocol, in short the CoW Protocol. The new token will be referred to as COW.

Totally agree with rebranding.
Before, it took a lot of work to explain to people that Gnosis Protocol / Gnosis Safe / Gnosis Chain was not the same thing and has no relationship with each other.
Now with a completely different name, it’s clear and easy to spread, and I couldn’t agree more.


Yes, validators will be considered.

This forum post lays out the details for GNO Token holders with regards to their CoW airdrop eligibility:

For GNO Token holders the snapshot will be taken on January 9th. GNO holdings on Ethereum as well as Gnosis Chain will be eligible for the airdrop. If you want to participate in the potential airdrop of COW Tokens, you must swap your STAKE on January 9th at the latest (you have time until January 9th midnight UTC). All GBC validators will be eligible, as well as the following LP Token holders:

  • Balancer v2 (Mainnet)
  • Uniswap v3 (Mainnet)
  • SushiSwap (Mainnet)
  • HoneySwap (GnosisChain)
  • Symmetric (GnosisChain)
  • Swapr (GnosisChain)
  • Elk (GnosisChain)
  • SushiSwap (GnosisChain)

Glad you are bringing this up, had to google what it stands for (not obvious to non-natives). Thank you for bringing it to our attention.

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Thanks for taking the concern seriously. I am usually against dramatizing specific terms and especially abbreviations since those can mean many different things depending on the context. However crypto and defi are heavily influenced by internet culture and the abbreviation CP is to this day strongly connected to those horrible things we all don’t even want to think about. I am a long term user of CowSwap and it would hurt my soul if this project would get mocked for the abbreviation or worse, falsely associated with those horrible things it stands for.

May I suggest CWP as a better abbreviation? Or maybe your team can come up with an even better name and abbreviation altogether. I like the cow meme though.

Thanks again for listening.


I love COW swap and looking forward to becoming more of an active DAO member.


very very goooooooood idea bro


It will Go to the moon

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Please be sure both farms and LP are considered. I know protocols are available to help if needed.

Can we assume if you are holding LP or in a farm contract you will get the airdrop?

Edited to share question we just received:

To receive the next CowSwap airdrop, which step below is still eligible for the farming GNO-ELK pair in GnosisChain?

(1) Just keep it in Farm

(2) Withdraw into Pool

(3) Remove LP into tokens