CIP-37: Increasing liquidity for COW token via a programmatic order and an FM-AMM

[AndreaC]

Dear all,
we completed an evaluation of CoW AMM so far. TlDR is: CoW AMM is still in beta, and there is ample room to increase the return for its LPs further. Despite this, depending on the method and the pool, the returns to providing liquidity to CoW AMMs are similar to or significantly better (3% extra per month) than the best alternative for passive LPs. Also relevant for the discussion here: we decided to pause the stream of COW tokens to the initial COW/WETH CoW AMM pool. You can find all details here:

4 months of CoW AMM: what we have learned and the next steps

TlDR. CoW AMM is still in beta, and there is ample room to increase the return for its LPs further. Despite this, depending on the method and the pool, the returns to providing liquidity to CoW AMMs are similar to or significantly better (3% extra per month) than the best alternative for passive LPs. Executive summary CoW AMM’s promise to protect liquidity providers from LVR, that is, the excess profits made by arbitrageurs when rebalancing an AMM. During the first few months of its existence,…