CIP-86: Discretionary grants program for victims of the cow.fi domain hijacking

Governance
1

SIMPLE SUMMARY

This CIP proposes the creation of a discretionary grants program to provide support to victims of the cow.fi domain hijacking of April 14, 2026. It also specifies criteria for submitting and verifying claims, as well as a timeline for opening and closing the discretionary grants program.

MOTIVATION

As documented in the CoW.fi Domain Hijack Post-Mortem, the domain registrar (Gandi SAS) used by CoW Swap’s DNS holder (AWS Route 53) was exploited on April 14, 2026, in a social engineering attack that gave hackers control of the cow.fi domain for approximately 4.5 hours. During this time, hackers were able to serve a “phishing” website that tricked cow.fi visitors into signing malicious transactions that drained tokens from their wallets. The core team estimates that approximately 1.2M USDC worth of user funds were taken from users as a result of this incident.

Despite the fact that CoW Swap was not hacked and was in no way responsible for the security failures that led to the success of the attack on its domain registrar, we take our relationship with our users seriously, and we recognize that these relationships are built on trust. Therefore, we believe it is right and proper to do what we can to assist CoW Swap users that lost funds during the aforementioned incident.

SPECIFICATION

To help users recover their funds, the core team is asking for a mandate from the DAO to pursue, where necessary, any legal actions linked to this specific incident.

Additionally, the core team proposes the establishment of a discretionary grants program designed to provide voluntary financial assistance to users impacted by the recent incident.

To be eligible for a relief grant, users will need to submit claims via help@cow.fi by May 14, 2026 and have their claims verified by the core team. Verification is not straightforward, given the fact that the malicious drainer contract was live on multiple websites at the same time. Because of this, claims must meet the following criteria for verification:

  • The wallet must have traded on CoW Swap at least once before the incident took place

  • The wallet owner must have signed a malicious message or transaction with the specific drainer contract active on the “phishing” site that impersonated CoW Swap during the incident (notably, we hold the view that it is not appropriate to refund users who entered their wallet’s seed phrase, as this is not behavior that impersonates CoW Swap – or any DEX for that matter)

  • The wallet owner must identify themselves by following a KYC process (this is needed to ensure that the CoW Foundation entity processing the discretionary grant distributions is complying with local laws; information collected as part of this process will be destroyed within 30 days of grants being paid)

  • Traded on CoW Swap at least once before the incident took place; or

  • Been directly funded by one or more wallets that traded on CoW Swap before the incident took place. In this case, the funding path must be clear, direct, and verifiable on-chain. (Wallets funded through mixers, privacy-obfuscation tools, sanctioned addresses, or other sources that create legal, sanctions, AML, or verification concerns are not eligible.)

  • The wallet owner must have signed a malicious message or transaction with the specific drainer contract active on the “phishing” site that impersonated CoW Swap during the incident.

  • Claims are not eligible where the relevant loss resulted from the claimant entering, disclosing, or otherwise exposing a seed phrase or private key.

  • The wallet owner must identify themselves by following a KYC process. This is needed to ensure that the CoW Foundation entity processing the discretionary grant distributions is complying with local laws. Information collected as part of this process will be destroyed within 30 days of grants being paid.

To submit a claim, affected users must send an email to help@cow.fi by May 14, 2026 with the subject line “Discretionary Grant Claim for CoW.Fi Domain Hijack Incident” and text in the email body that includes the impacted wallet address, the specific assets drained, and the name of the wallet owner. As soon as a claim is matched with onchain data, help@cow.fi will reply with KYC instructions for final verification.

Once a claim is verified, the CoW DAO treasury team will transfer the USDC value of the amount a verified user lost at the time of the incident to the user’s wallet.

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Any payment made under the program is voluntary, ex gratia in nature, and does not constitute an admission of liability, fault, or legal obligation on the part of CoW DAO, its tokenholders, contributors, adjacent legal entities, or service providers.

As a condition of receiving this payment, the recipient agrees that, to the fullest extent permitted by applicable law, the payment fully and finally settles any claim the recipient may have against CoW DAO, its tokenholders, contributors, adjacent legal entities, and service providers arising out of the specific incident described in this program. This does not affect any rights that cannot lawfully be waived.

This discretionary grant program will be funded via a one-time, exceptional mandate of the Legal Defense Reserve. This specific allocation is restricted to providing discretionary payments of up to 100% of the assets lost by CoW Swap users that were impacted by the signing of malicious messages or transactions during this specific incident and fulfilling the eligibility criteria listed above. Aside from this singular event, the standing mandate and restrictive use cases of the Legal Defense Reserve remain unchanged, as originally defined in CIP-50. This disbursement is an isolated, ex gratia gesture and does not establish a precedent for future use of the Legal Defense Reserve for purposes outside its primary defensive scope.

TIMELINE

The anticipated timeline for the discretionary grants program is as follows:

  • April 23 - CIP Draft posted to the forum

  • April 30 - CIP voting period begins on Snapshot

  • May 7 - CIP accepted or rejected via Snapshot

  • May 14 - All claims due to help@cow.fi; claim verification begins

  • May 21 - Claim verification complete; CoW DAO treasury starts issuing relief grants

  • May 31 - All discretionary grants paid; discretionary grants program is concluded

After all discretionary grants are paid, the treasury team will resume “topping up” the amount depleted from the Legal Defense Reserve until the total amount in that wallet reaches a value of 5M USDC, per its current mandate.

The timeline for the legal process is hard to predict. However, it is expected that the core team will keep the community appraised of key developments in the process.

EXECUTION

N/A

UPDATE 28/04/2026

https://forum.cow.fi/t/cip-draft-discretionary-grants-program-for-victims-of-the-cow-fi-domain-hijacking/3431/8

2

(notably, we hold the view that it is not appropriate to refund users who entered their wallet’s seed phrase, as this is not behavior that impersonates CoW Swap – or any DEX for that matter)

Seriously?! the interface on swap.cow.fi - at least on mobile where we were affected - stole seed phrases by posing as part of the parent web3 browser. that’s like if the connect wallet button on a browser was able to launch a native keychain prompt that prompted for a password. i would argue that is way worse as it capitalizes on that “autopilot response” that makes exploits like this so successful.

i’m very surprised by this, and am almost wondering if this is specifically trying to single us out since we were the biggest loser and accounted for half the losses. in which case couldn’t you guys at least have offered a partial refund? not to mention that we’ve probably generated more than 50% our loss in revenue for cowswap..

there’s at least 10 different ways you guys could’ve gone here that makes more sense. at least including us in the conversation being one of them

3

I find this proposal very strong. I also agree that COW DAO should not refund users who compromised their own security by entering their seed phrase.

In the event that some funds are recovered through law enforcement efforts, how will those funds be allocated? Would they be directed to the legal protection fund?

4

Time to invest in hardware wallet bro. I personally was compromised via metamask chrome addon in 2018, and I had 0 refund from metamask even though the addon was officialy from chrome addon stores. That is when i lost $500k cause i was greedy enough to not pay for harwale wallet cause of “it wont happen to me” attitude.

5

First they would be allocated to victims of this incident that do not qualify for a discretionary grant under the terms set forth in this proposal. Then TBD. It is reasonable that they would be directed toward the Legal Defense Reserve, or they could go to the treasury for general use (to fund new initiatives, extend runway, earn interest, etc.).

6

That’s just one of many ways to look at it.. we use gnosis safe usually but the transactions would fail all the time so we had no choice but to use EOA’s. The lack of refund seems reasonable until you think about the fact that bybit got hacked for $1.6B (1000x the amount of this hack) and they made everyone whole. So if at the end of all this, we get no support, then it really highlights the difference between the two entities.

And to your point - the question isn’t whether or not we used hardware wallets - any hardware wallet user would’ve gotten hacked if they made a trade through the UI that day - the question is whether COW was impersonated. My case is that if you get DNS swapped such that the “connect wallet” button on your site actually steals my keys then that is 100% without a doubt impersonation.

And last but not least - the “topping up” of the legal reserve is strange and I’m surprised that someone thought it was a good idea to mention that. It sounds like you’re saying you’re going to top up to 5 mil for a hack where the users lost 1.2M, so it almost sounds like you’re about to top up some wallet that is meant to act as insurance with more funds than the total of the users’ losses? and all this for a potential legal battle which could just be completely avoided by paying the users that made you that money in the first place! The part where you go out and pay some lawyers and have them go sue people seems like un-necessary extra steps

7

I believe it is important for CowSwap to consider reimbursing users whose wallets were drained during the DNS hijacking incident when there is a verifiable, historical connection between the compromised wallet and previously active CowSwap addresses. Specifically, if a drained wallet was funded by one or more Ethereum addresses that have executed CowSwap transactions prior to the incident, that provenance should be treated as evidence of legitimate user activity.

To illustrate: my own wallet was drained during the DNS hijack. The compromised wallet itself had no prior CowSwap transactions because it was newly created. However, it was funded directly from my long‑standing Ethereum addresses, several of which have executed CowSwap trades over the past four years. This establishes a clear, traceable link between the drained wallet and my historical usage of the protocol.

On April 14, shortly before the incident, I transferred all of my assets to a new Ethereum address as part of my normal operational process. I then proceeded to connect this new address to CowSwap to approve USDC and ETH for trading. At that moment, I unknowingly signed a malicious message presented by the hijacked frontend. I was using a Ledger device through Rabby Wallet at the time.

Although the new wallet had zero prior CowSwap activity, the funded‑by chain leads directly back to my established addresses with documented CowSwap trading history. I am also able to cryptographically sign a message from any of those originating addresses to verify ownership.

For these reasons, I believe that reimbursement criteria should account not only for direct CowSwap activity on the drained wallet, but also for the historical activity of the addresses that funded it. This approach more accurately reflects legitimate user behavior and protects long‑time users who were affected solely because they followed normal operational patterns at the time of the DNS hijack.

8

Hi All,

Thank you for your contribution to the proposal. There are two points to address here.

@tatsugitsune_14913

I think your request is fair and should probably be acceptable to the DAO.

If a user created a fresh wallet, and that wallet was funded by another wallet that had used CoW Swap before the incident, it seems reasonable to treat that user as having a sufficient CoW nexus.

Indeed, people often use new wallets for security, privacy, or operational reasons. So requiring the drained wallet itself to have used CoW Swap before the incident may be too strict in cases like yours.

That said, this should only apply where the link is clear and easy to verify.

However, I think there is an important limit. Wallets funded through mixers or similar obfuscation tools should not be included. Even if some users use those tools for legitimate privacy reasons, the DAO and the Foundation cannot reasonably take on the AML, sanctions, and regulatory risk in the context of a discretionary grant program.

@coopmoney I am in the opinion that, seed-phrase compromise cases should remain excluded.

This is not about blaming victims. But entering a seed phrase into any website, fake prompt, mobile browser, or app flow goes against the most basic crypto security practices. A DEX interface should never ask for a seed phrase, and users should never enter one. This very specific case is object of a clear warning on CoW Swap Terms and Condition pages.

  • Beware of Scams: Be vigilant against scams. We will never contact you first, ask for your password, private keys, or seed phrase, or ask you to connect your wallet to an unknown third-party application. Always verify the URL https://swap.cow.fi/ before interacting. We will never ask you for your private key or seed phrase.

Including those cases would change the nature of the program. It would move the DAO from helping users affected through the hijacked CoW frontend into covering broader phishing or wallet-security failures. I do not think that is a line the DAO should cross.

So, in simple terms:

  • Yes: fresh wallet directly funded by a wallet that had used CoW Swap before, if ownership and funding path can be verified.
  • No: wallets funded through mixers or unclear funding paths.
  • No: cases where the user entered or exposed a seed phrase/private key.

A possible wording for the eligibility criteria could be:

Because of this, claims must meet the following criteria for verification:

  • traded on CoW Swap at least once before the incident took place; or
  • been directly funded by one or more wallets that traded on CoW Swap before the incident took place. In this case, the funding path must be clear, direct, and verifiable on-chain. (Wallets funded through mixers, privacy-obfuscation tools, sanctioned addresses, or other sources that create legal, sanctions, AML, or verification concerns are not eligible.)
  • The wallet owner must have signed a malicious message or transaction with the specific drainer contract active on the “phishing” site that impersonated CoW Swap during the incident.
  • Claims are not eligible where the relevant loss resulted from the claimant entering, disclosing, or otherwise exposing a seed phrase or private key.
  • The wallet owner must identify themselves by following a KYC process. This is needed to ensure that the CoW Foundation entity processing the discretionary grant distributions is complying with local laws. Information collected as part of this process will be destroyed within 30 days of grants being paid.
9

I appreciate the clarification on funded‑by eligibility, and I want to expand slightly on why this criterion is both practical and straightforward to verify.

When a drained wallet is funded by another wallet that previously used CoW Swap, the verification process is entirely on‑chain and requires no subjective interpretation. The CoW team can simply follow the funded‑by chain step‑by‑step through n intermediary wallets until it reaches a known endpoint such as a centralized exchange (for example, Coinbase). This is a deterministic process: every hop is visible, timestamped, and cryptographically linked.

If any wallet in that funding chain executed at least one CoW Swap trade before the DNS hijack, then the user clearly satisfies the “CoW nexus” requirement. It shows that the drained wallet did not appear out of nowhere—it inherits provenance from an address with established CoW Swap activity.

And if additional assurance is needed, the claimant can cryptographically sign a message from any wallet in that funded‑by chain to prove ownership. This removes ambiguity and ensures that only legitimate users—not unrelated third parties—can claim a connection to those addresses.

This approach keeps the criteria strict, verifiable, and resistant to abuse, while still accommodating normal user behavior such as rotating to fresh wallets for security or operational reasons.

10

CIP-86 is already live on Snapshot for voting: Snapshot

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CIP-86 — Discretionary Grants for Domain Hijack Victims has passed :white_check_mark:

Thank you to everyone who took the time to read, discuss, and participate in the vote.

More details, including next steps and process updates, will be shared with the community and affected users soon.

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CIP-86 Update: Next Steps & KYC Process

Following the approval of CIP-86 via Snapshot, we wanted to share the next steps regarding the discretionary grants process for users affected by the DNS hijacking incident.

As outlined in the proposal timeline, all claims must be submitted to help@cow.fi by May 14, after which the verification process will begin.

To support this process, CoW DAO has engaged an external firm to handle KYC verification for eligible users. Users whose claims move forward in the review process will receive a secure KYC link directly via the email address they provided when submitting their claim.

Before those emails are sent, we will also share an additional communication with more details about the sender information users should expect, in order to help avoid confusion or phishing attempts.

Current timeline:

  • May 14 — Claim submission deadline (help@cow.fi)
  • May 14 – May 21 — Claim review and KYC verification process
  • May 21 — KYC process expected to be completed; CoW DAO treasury begins issuing discretionary grants
  • May 31 — Discretionary grants program concluded

We appreciate everyone’s patience throughout this process. Further updates will be shared in this forum thread as needed.