CIP-DRAFT: Continued funding for development services - Service Agreement No 5

[Kowrigan]

**CIP-DRAFT: Continued funding for development services - Service Agreement No 5**

title: < Funding for Consolidated Services under the New Legal Structure for 2026 >
author: < @Kowrigan>
status: Draft
created: 2025-10-28

Simple Summary

• This proposal is filed by the Core Team (the “Service Provider”) and requests that CoW DAO earmark 13,800,000 USDC from the treasury for calendar year 2026 to fund its operations.

• Pursuant to CIP‑64, CoW Foundation will allocate the approved budget quarterly to each of the four Legal Entities: CoW Foundation, CoW Core Limited, CoW Hosting Limited, and CoW Business Limited; in line with their mandates.

• Each Legal Entity will then sub‑contract the Service Provider for its respective workstream and compensate the Service Provider monthly in arrears, for the scope of services described in this CIP.

• Additionally, the Core Team requests a top-up of 100,000,000 COW tokens to be allocated to the CoW Team Grant Allocation Committee for contributors long-term alignment.

Motivation

CoW DAO’s mission is to make digital‑asset trading provably fair, cost‑efficient and MEV‑resistant. Achieving that vision in 2026 hinges on pairing the DAO’s new legal structure with an uninterrupted stream of specialist execution capacity.

• Preserve product momentum & market reach. For several years the Service Provider has shipped major protocol upgrades, launched new products and features, and expanded to additional chains. Continued funding keeps this proven team focused on the roadmap and accelerates growth (new product research and innovation, L2 expansion, and strategic partnerships).

• Maintain a growing technological system: Given that CoW suite of products grew from 4 to more than 10 networks, with more than 10B traded on a monthly basis.

• Operationalise the legal framework. The requested budget is allocated by the Foundation to the four legal entities (including itself) according to their functional remits, thereby realising the structure’s operational efficiencies.

• Sustainable, transparent funding. Switching to monthly, invoicing (instead of large upfront transfers) smooths the Service Provider’s cash flow while giving the DAO and the Foundation twelve checkpoints per year to verify KPIs, pause or redirect spend, and earn yield on un-disbursed treasury assets.

The Past Execution in a Nutshell (Background & Performance Context)

To provide context for this funding request, it is valuable to review the performance of the core contributing team that will be engaged by the Service Provider. The achievements of 2025 demonstrate a track record of effective execution and financial diligence:

• Market share increase with prudent financial performance encompassing profitability at a protocol level

• Migration to a Fair Combinatorial Batch Auction mechanism

• Strategic integration partnerships (Aave, LI.FI, Bungee, etc.)

• Cross-chain swap feature

• Onboarding of solvers including those running their own drivers

• Setup of new legal structure (CIP-64)

• Deployment of 5 new networks

Financial: The budget allocated for 2025 activities was managed with diligence. A focus on high-impact initiatives and careful cost control ensured that all key objectives were met within the allocated financial scope.

Values in USD

Month	A) Budget at Treasury	B) Budget at Foundation	C = (A+B) CoW DAO budget	Spent from CIP	Variance
01/01/2025	633,333.33		633,333.33	419,379.00	213,954.33
01/02/2025	633,333.33		633,333.33	406,356.90	226,976.43
01/03/2025	633,333.33		633,333.33	500,736.00	132,597.33
01/04/2025	633,333.33		633,333.33	495,061.00	138,272.33
01/05/2025		633,333.33	633,333.33	754,303.26	-120,969.93
01/06/2025		633,333.33	633,333.33	375,900.23	257,433.10
01/07/2025		633,333.33	633,333.33	434,115.20	199,218.13
01/08/2025		633,333.33	633,333.33	347,971.42	285,361.91
01/09/2025		633,333.33	633,333.33	734,435.35	-101,102.02
01/10/2025		633,333.33	633,333.33	591,376.55	41,956.78
Subtotal	2,533,333.32	2,533,333.32	5,066,666.67	3,733,823.01	1,332,843.66

This history of execution provides confidence in the team’s ability to effectively utilise the funds requested in this proposal for 2026.

For more context, please refer to the Core Team update (Jan to Aug 2025)- Update on CIP-58: Funding for development services - Service Agreement fulfilment.

Scope of Services & Entity Mandates

As established in CIP-64, the Foundation will coordinate the distribution of the services under this CIP across the four distinct legal entities adjacent to CoW DAO. This CIP mandates that each entity will subcontract the execution of the services within its mandate to the designated Service Provider.

Main Development Focus

While remaining flexible to adapt to community feedback, we propose that the year 2026 be dedicated to the below items. This list is not exhaustive and may evolve.

• Growing CoW Swap volume and market share through strategic, awareness-driving activities

• Supporting the integration of CoW Protocol into relevant B2B partners both within TradFi and DeFi

• Deploying CoW Protocol on relevant EVM chains

• Expanding CoW Protocol & CoW Swap beyond the EVM ecosystem

• Bringing CoW Protocol’s unique smart orders to EOA accounts

• Building a prototype of Cross Chain Solution, based on CoW’s intent, leveraging efficiency gains via CoW’s unique batch mechanism across chains.

• Research and implementation of value distribution mechanism [/edit]

The Team

The team that plans to execute this Service Agreement on behalf of the Legal Entities is the same core group that has been dedicated to the CoW DAO ecosystem for several years and is committed to its long-term success. The team consists of more than 40 full-time positions, with world-class expertise across engineering, cryptography, research, product management, design, business development, marketing, and operations. The team operates under the stable and continuous leadership of the Core Team and has a proven track record of delivering on ambitious roadmaps.

Compensation & Budget

The Service Provider has calculated a total spend of 12,600,000 USD for the delivery of all services for the term. The budget below breaks down this cost by expense category and the responsible legal entity.

Budget Breakdown by Entity

From 1st of January 2026 - 31st December 2026, the USD budget estimate is allocated as follows:

CIP Area	Request from Treasury	CoW Business	Foundation	CoW Hosting	CoW Core
Frontend	1,700,000			1,700,000
Backend & Smart Contracts	2,800,000				2,800,000
Solvers	1,500,000				1,500,000
DevOps & Infrastructure	1,700,000				1,700,000
Product management	700,000		700,000
Marketing & BD	2,900,000	2,900,000
Operations, Finance and Legal	1,100,000		1,100,000
Totals	12,400,000	2,900,000	1,800,000	1,700,000	6,000,000

Note: This request excludes any budget for Foundation operations, which is regulated under CIP-64: Incorporation of a legal structure for CoW DAO.

Execution: Proposed Transaction & Payment Process

Upon successful passing of this CIP, CoW DAO’s treasury team is mandated to execute the following:

1. Initial Funding: The CoW Foundation treasury shall finance on a quarterly basis its main multisig, so that the officers can fund each entity multisig according to its individual treasury needs. The transfers should be made in a relevant stablecoin (e.g., USDC) by the 10th of the month post quarter end.

2. Monthly Payments: Each entity will then be responsible for disbursing its portion of the service fees to the Service Provider in twelve equal monthly instalments, managed by the entities’ Director(s).

Contributor’s Alignment

Since the 2022 spin-off from Gnosis DAO, the Core Team has delivered consistently. At TGE, the DAO approved a 15% team allocation managed by the CoW Team Grant Allocation Committee (the “Committee”) to foster long-term alignment. That program helped retain 12 of the original 22 contributors and sustain a broader group of 40+ builders across the CoW DAO products.

From the original pool, ~26 M COW (~2.6% of total supply) remains uncommitted (excluding grants already awarded but still vesting). To maintain continuity as several grants complete vesting and to recruit world-class talent, the Core Team requests a top-up of 100M COW to be allocated to the CoW Team Grant Allocation Committee, which was recognised by CoW Foundation as a Delegated Committee. The Committee will administer token allocations, consistent with past practice and under Foundation oversight, using time-based vesting schedules over the next four years. Prior to Snapshot voting the Committee will suggest the wallet address for the CoW Team Grant Allocation to be transferred to.

The requested top-up amount for the Core Team allocation will be streamed / vested to address **TBD** over a 4 years period from which Core Team allocation will be initiated.

The requested top-up amount for the Core Team allocation will be streamed / vested to address eth:0x486c2B52FfbeD401b16ce39b7Ab9E2Ebf56D650f over a 4 years period from which Core Team allocation will be initiated. The Grant is requested to be vested linearly over 4 years from CoW DAO Safe (eth:0xcA771eda0c70aA7d053aB1B25004559B918FE662), starting on the conclusion of the current team attribution - timestamp 1770797115 (February 11, 2026 8:05:15 AM). This mechanism will be enacted by adding an AllocationModule to CoW DAO Safe, allowing the initiation of the vesting of tokens to the safe under Committee control. For avoidance of doubt, CoW DAO and the CoW Tokenholders reserve all powers, rights and control to any unvested part of the grant which might be cancelled at any time through governance proposal.
[/edit]

Terms and Conditions

Service

Pursuant to their foundational mandates established by CoW DAO in CIP-64, the Legal Entities agree to execute their respective services for the 2026 term by subcontracting all operational tasks defined herein to the Service Provider. The Service Provider shall collaborate closely with the Directors of the Legal Entities and the broader CoW DAO community to understand wider objectives and tailor services to align with CoW DAO’s vision and products. Activities and results will be shared through periodic updates, with comprehensive reviews typically conducted semi-annually. Specifically, a half-year update in Q3 2026 and a full-year update will be provided in Q1 2027.

Payment

Upon approval of this CIP, CoW DAO agrees to the allocation of the Requested Funds to Legal Entities.

CoW Foundation is hereby granted the authority to manage this total budget and allocate funds periodically to its own operational wallet and to the operational wallets of the other entities (CoW Core Ltd., CoW Hosting Ltd., and CoW Business Ltd.). This flexibility is granted to allow for dynamic adjustments based on evolving operational requirements throughout the Term.

This authority is subject to the following conditions:

1. Total disbursements across all entities shall not exceed the total budget approved in this CIP.

2. All fund allocations must be consistent with the established mandates of each entity as defined in the Service Allocation Matrix.

3. All inter-entity fund allocations must be transparently documented and presented to the community in the regular transparency reports.

The Legal Entities will use these allocated funds to pay the Service Provider monthly in arrear for services rendered under their respective sub-contracts resulting from this CIP.

Term and Termination

This Agreement shall commence on the 1st January 2026 and shall remain in full force and effect until the 31st December 2026 (the “Term”). Notwithstanding the foregoing, should funds remain available to continue the mandate provided by this Agreement, the Agreement may be extended for up to an additional six (6) months. The Directors of the Legal Entities shall notify CoW DAO at least thirty (30) days prior to the Term end regarding any proposed extension.

Early Termination

The Service Provider may terminate its engagement with the Legal Entities for convenience by providing three (3) months’ prior written notice in the form of a Forum post.

CoW DAO may command the Legal Entities, individually or together, to terminate their engagement with the Service Provider if the termination is approved through CoW DAO’s Governance Mechanism (as defined in CoW DAO’s Participation Agreement); however, any termination approved through this mechanism shall not take effect until the expiration of a three-month period following the successful vote.

Either the Legal Entities or the Service Provider may terminate their engagement if any law, decree or regulation is enacted that directly prohibits or materially impairs the performance of the core services under this Agreement.

Consequence of Early Termination

Upon the effective date of termination:

1. Final Settlement with Service Provider: The Service Provider shall be entitled to payment for all services satisfactorily performed up to the effective termination date. The Legal Entities shall settle any final, pro-rata invoices for completed work. The Service Provider must reimburse the Legal Entities for any portion of a monthly payment that covers a period extending beyond the effective termination date.

2. Return of Funds to DAO Treasury: CoW Foundation and the Legal Entities are hereby mandated to return all unspent and uncommitted funds from the budget approved under this CIP to the CoW DAO treasury. This transfer shall be completed within thirty (30) days of the termination date, ensuring the remaining annual budget is secured under direct DAO governance pending further proposals.

Intellectual Property

All rights related to works, new products and processes, or any other creations resulting from the services provided under this Agreement (“Intellectual Property”), regardless of which entity contracted the specific work, belong by origin and since their creation to the CoW Foundation in accordance with its mandate under CIP-64 and the CoW DAO Participation Agreement. The CoW Foundation shall grant the necessary licenses to the other Legal Entities and the Service Provider to fulfil their operational duties.

Miscellaneous (in no particular order)

• Subcontracting.

  • The Legal Entities are hereby mandated by CoW DAO to subcontract the services outlined in this Agreement to the designated Service Provider. The Legal Entities remain responsible to CoW DAO for the fulfilment of this primary mandate.

  • The Service Provider may further subcontract all or portions of the services to specialist third parties as needed to fulfil its obligations. In doing so, the Service Provider remains fully liable and responsible to the Legal Entities for the performance, quality, and deliverables of any and all of its own subcontractors. The contractual relationship for any further subcontracted work exists solely between the Service Provider and the third-party specialist.

• Assignment. No party may assign its rights or obligations under this Agreement without the prior approval of CoW DAO via its Governance Mechanism.

• Confidentiality. All information obtained privately (i.e., not via public discourse) between CoW DAO, the Legal Entities, and the Service Provider shall remain the sole and exclusive property of the disclosing party. A receiving party including its subcontractor and agents must keep all information obtained privately confidential.

• Definitions. Terms in this Agreement shall have the same meaning as in the CoW DAO Participation Agreement. In the event of any conflict or inconsistency, this Agreement shall take priority.

• Independence of the Parties. The Legal Entities are independent legal persons mandated by CoW DAO. The Service Provider is an independent contractor to each Legal Entity. Nothing in this Agreement is intended to create a partnership or joint venture between any of the parties.

• Disclaimer. All parties expressly disclaim all representations, warranties, guarantees, conditions and undertakings, including warranties of merchantability and fitness for a particular purpose.

• Limitation of liability. The Service Provider’s total aggregate liability to each Legal Entity for all claims arising under this Agreement shall be limited to a maximum amount of USDC 50,000.00. The Directors and officers of the Legal Entities shall not be liable for any actions taken in good faith on behalf of CoW DAO pursuant to this Agreement.

• Force Majeure. If the provision of the Services are affected by a Force Majeure event, this shall not be deemed a breach of this Agreement.

• Severance. If any provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable.

• Disputes. In the event of any dispute, the relevant parties shall use their best efforts to settle the disagreement through good faith negotiation. If no agreement is found within thirty (30) days, the disagreement shall be referred to and finally resolved by arbitration by one arbitrator in London, United Kingdom, under the rules of the London Court of International Arbitration.

• Governing Law. This Agreement shall be governed by and construed in accordance with the laws of England and Wales.

Transaction Data

Two calls need to be executed at the same time from the DAO:

1. Enabling the streaming module.

To: 0xcA771eda0c70aA7d053aB1B25004559B918FE662

Data: 0x610b5925000000000000000000000000d2d2946402c60d1c97195fa22ead21812e1ff25d

Value: 0

2. Start the allocation.

To: 0xd2D2946402c60d1C97195fa22eaD21812e1ff25D

Data: 0x02a861a6000000000000000000000000486c2b52ffbed401b16ce39b7ab9e2ebf56d650f00000000000000000000000000000000000000000000000000000000698c383b000000000000000000000000000000000000000000000000000000000784ce0000000000000000000000000000000000000000000052b7d2dcc80cd2e4000000

Value: 0

You can check out this link for more information on the module and on how the transaction data has been generated. It also includes a file that can be directly imported by signers into the transaction builder for ease of execution. Here is a simulation.

[/edit]

[karolak]

CIP-62 unlocked 80M COW to cover Cow DAO expenses through 2028 — or did I misunderstand something? Now the team is requesting an additional 100M COW. Why not fund expenses through current revenue and the COW already bought back?

Right now, it appears that the risks are being shifted entirely onto existing COW holders, without any concrete mechanism to ensure value flows back to them via buybacks. The treasury already holds sufficient funds to acquire COW on the open market and compensate the team with those tokens — which would be a far healthier model. Revenue exists, so it should be used to support buybacks and team incentives, rather than increasing dilution and placing all costs on current token holders who receive no guaranteed benefit in return.

Implement buyback + reward team with CALL option at current price. Instead of diluting holders.

I’m not against funding operations or releasing tokens to the team. But any new allocation should be tied to a mandatory buyback program, aligned with the token vesting schedule, to ensure incentives are fully aligned with COW holders’ long-term interests.

[notsoformal]

@karolak, thank you for the post, I think I can give more context here. These are fair questions, and the Core Team agrees that long-term alignment between contributors and tokenholders is key. A few important clarifications and context points:

1) CIP-62 vs. the current request

CIP-62 established a reserve of 80 M COW, earmarked for ecosystem purposes and treasury management through 2028. Those tokens are not a liquid pool directly available for contributor grants or operational use. In practice, they remain under DAO governance (through the Treasury team) and are not part of the Team Grant Allocation Committee’s mandate. The funds were requested for the future funding of the DAO, as per:

1. Develop of new CoW product - 42M COW- These tokens were earmarked to OTC deals, raising funds, token trading to ensure more treasury (stables) for the operations of the DAO.

   1. At the time, the token price was 0.59 usd, which equated to 24.8M USD.
   2. The treasury was engaged by several OTC opportunities, but which required steep market discounts and low commitment on supporting the project.
   3. Given the subsequent price drop, the treasury team assessed it was not in the DAO’s best interest to sell those tokens at the under 0.59 USD mark.

2. Defense reserve completion - 5.5.M COW - These tokens were earmarked to be sold in the market and top up the defense reserve.

   1. Given that the enforcement environment and lower risk, the tokens were not all sold, the earmarked amount of 5M USD was accumulated.

3. The remaining allocations were either fully deployed (e.g. new POL positions), or are to be deployed (e.g. partnership deals that are contingent on contractual terms).

The 100 M COW top-up requested here would replenish the existing Team Grant Allocation - a specific, contributor-focused pool that has been in place since the original spin-off from Gnosis DAO. Roughly 26 M COW remain uncommitted from the initial allocation, and with many of the original grants reaching full vesting, a refresh is needed to sustain and attract long-term contributors. This is a lower amount than the attribution at TGE (15% at the time), and to be allocated to a growing number of Core developers.

2) Why not fund team incentives via buybacks or revenue?

The DAO’s current revenues and ETH/USDC reserves are already earmarked to cover operational expenses and growth initiatives, including protocol development, audits, infrastructure, and integrations. Using those revenues for continuous buybacks would directly reduce the DAO’s ability to invest in growth - the Core Team identifies itself with the view being discussed on discord here.

Moreover, having contributor alignment incentives denominated in the same token as the DAO’s , aligns long-term value.

3) On buybacks and value flow

We fully share the view that sustainable value should accrue to tokenholders. Buybacks, staking, and other value-capture mechanisms remain key topics for the DAO’s Treasury and Tokenomics Working Groups, and can certainly be discussed as a separate discussion - as is happening both in Discord and internally.

However, it’s important to separate operational funding from tokenomics decisions - the former ensures the DAO can continue executing, the latter determines how value is distributed once generated.

Given the importance of this topic to the community, we propose to add the research of value distribution as a roadmap item for 2026, to share thoughts on it between Q1 and Q2 2026.
Note: Given current partnership agreements and mechanism redesign, Q1 roadmap is already considerably filled.

---

In summary / TL:DR

• CIP-62’s tokens (under management by the Treasury Team) are not earmarked for Core Contributor grants and alignment;

• The 100 M COW request extends the contributor alignment program, not operational funding and is a lower request than the allocation on TGE;

• In our view, operational revenue should in the short term support growth and product delivery, not token repurchases above the level currently performed; and

• The DAO retains full discretion to later adopt buyback or yield programs once core funding stability is secured.

• The Core Team suggests to add the design of a value distribution mechanism to this Service Agreement.

[valloderbabo]

Thanks so much for the detailed response. I really appreciate the transparency and how clearly you explained everything.

It’s reassuring to see the distinction between CIP-62 and the Team Grant Allocation, and knowing that a large part of the 42 M $COW reserve is still available definitely builds confidence in the DAO’s long-term sustainability.

On funding team incentives via buybacks or revenue:

totally understand the reasoning. The DAO needs revenue to cover growth, development, audits, and infrastructure. Using that for continuous buybacks would reduce the ability to invest in the core products, so it makes sense to prioritize operational stability first. Aligning contributor incentives with $COW is also smart for long-term commitment.

On buybacks and value flow:

good to see that the Core Team acknowledges that sustainable value should go to tokenholders and that buybacks, staking, and other mechanisms are under active discussion.

Adding value distribution design to the 2026 roadmap is a positive step and shows that the DAO is thinking about alignment, even if the timeline is a bit far out.

That said, waiting until Q1–Q2 2026 to address $COW utility feels a bit late. A DAO like CoW can handle multiple priorities at once. If we’re managing multi-million token movements, complex treasury operations, and continuous product development, we can also spin up a small taskforce or working group focused on token utility/value alignment. It doesn’t need to be a huge engineering project, just early steps like:

• collecting and refining community ideas
• reviewing existing proposals
• drafting a short concept paper

The DAO is growing, products are performing well, revenue and volume are up, but the token hasn’t reflected that yet. The longer this disconnect remains, the more $COW risks losing relevance, trust, and liquidity. Token health isn’t a side concern in a token-based DAO, it’s central to growth, identity, and long-term credibility. Without meaningful $COW utility, CoW DAO risks functioning more like an open-source company with community governance rather than a true DAO.

Taking even small, early steps toward $COW utility now would show that the token truly benefits from the DAO’s success and isn’t just an afterthought. That would send a strong, motivating signal to contributors, tokenholders, and the wider community.

[m0xt]

Thank you for your reply.

I wanna start by saying that the team is doing amazing job and the fundamentals have never been better.

However, there remains a notable lack of clarity around the tokenomics, particularly in areas that are critical for current and potential investors to assess valuation risks and dilution impacts.

Previously, I raised a question in Discord regarding whether platforms like Tokenomist.ai could be reliably used to track token unlocks on a monthly basis. The response indicated that such tools may not be accurate and should not be relied upon by investors.

That said, the absence of a reliable, authoritative source for tracking token distribution and unlock schedules makes it very difficult for us as investors to evaluate the current token landscape and anticipate future supply dynamics.

While we had a brief discussion in Discord a few weeks ago, the overall picture remains somewhat opaque.

With vesting expected to end by January 2026, as previously mentioned, it becomes even more important to have a clear understanding of both the present and the token roadmap for the next 12–24 months.

To that end, I would appreciate clarity on the following:

1. Circulating Supply Accuracy
   Can you confirm whether the circulating supply reported on CoinGecko is accurate? I assume it is since you provide the data via your endpoint?

2. DAO-Owned Circulating Supply (Unallocated)
   How much of the current circulating supply is held by the DAO and not earmarked for ecosystem programs, treasury management, or team grant allocations?

3. DAO-Owned Circulating Supply (Allocated)
   How much of the circulating supply is held by the DAO and is allocated to ecosystem programs, treasury management, or team grant allocations?

4. DAO-Owned Non-Circulating Supply (Unallocated)
   Of the remaining non-circulating supply, how much is DAO-controlled and not designated for ecosystem programs, treasury management, or team grant allocations?

5. DAO-Owned Non-Circulating Supply (Allocated)
   Conversely, how much of the DAO-held non-circulating supply is already allocated to ecosystem programs, treasury management, or team grant allocations?

I understand that this is a nuanced and tricky topic - particularly with aspects like the 80M tokens from CIP-62 being technically marked as “circulating,” despite not being actively used or sold yet.

But as the protocol matures, providing transparency around token distribution will be increasingly important for community trust and long-term capital alignment.

I (and likely many others in the community) would be extremely grateful for a detailed update, including any forward guidance you’re able to provide for the next 12 to 24 months in terms of tokens.

[notsoformal]

@valloderbabo , thank you for your message.

My understanding on the main issue of your message is that taking Q1 - Q2 for sharing thought on a value distribution model is too long, and that there would be capacity to spring this new research project.

To be fully transparent, the Core Team can’t commit to a Q4 nor even early-Q1 study We are deep in heavy features and partnerships works.

The solver team main priority is improving the Protocol mechanics and profitability and the Ops / Finance team will spend significant time dedicated to consolidating the Foundation’s framework and supporting its team.

A middle ground would be to propose an RFP to the Grants committee to open a joint task force between Committee members (e.g. 2 seats), an external research company, and other interested stakeholders to join a total of 4-5 people to work on getting a thought a proposal by end Q1, which could be implemented in Q2 or Q3.

However, this action is outside of the purpose of this CIP and as we commit to work in the value distribution mechanism in this mandate, as per the last message, the Core Team can only commit to initiate the RFP on a reasonable effort basis without guarantee of success or delivery timeline (asking @Kowrigan to edit the proposal).

[notsoformal]

Thank you @m0xt , also great to have you involved in the ongoing discussions!

Regarding the platforms, there have been providers proposing 10k-30k yearly subscriptions, which as DevCo we felt are too expensive / not in the budget for our service agreements. As you’ve actually built one dashboard, I think it might be a Grants DAO oriented request. If the community shows this need further, we would need to increase slightly the overall budget for this service agreement.

Regarding the token release schedule, I’ll try to support, but think this is lateral to the current CIP.

1. Coingecko Supply - We’ve built the Github repository from where Coingecko is feed. This repository has been made open-source. Note: Currently the Foundation wallets are excluded for Mainnet, meaning that tokens bridged will count towards circulating supply.

2. DAO-Owned Circulating Supply (Unallocated) - All Foundation level wallets are considered non-circulating supply.

3. DAO-Owned Non-Circulating Supply (Unallocated) - The amounts in CoW DAO wallet.

4. DAO-Owned Non-Circulating Supply (Allocated) - All tokens allocated to purpose specific wallets, have specific mandates, e.g.:

1. CoW Grants DAO, COW earmarked to Grants

2. Treasury - COW earmarked for raising funds / partnerships (as per my previous message and CIP-62

3. Buyback wallet - Committed to fund ongoing solver rewards

4. Solver rewards wallet - Operational funds to pay next week’s rewards.

I would be happy to liaise with you on Discord, and define a wider framework to include in the CoW Foundation Transparency report (aimed to be delivered at the end of Feb).

[Kowrigan]

Thank you @notsoformal, the text of the CIP was edited accordingly. Search for [/edit] in the text.

[m0xt]

Thank you for your response.

Would you be able to share the wallet addresses along with a brief description of their respective mandates? This will allow my quant to consolidate the figures, and I can then include the totals on the dashboard alongside the adjusted market cap.

Then regarding the proposal itself…

I noticed you’ve now added a 4-year vesting schedule for the proposed 100M COW token allocation.

This is a helpful step as it adds structure and reduces the risk of any perception around quick access to funds (not suggesting that was the case), but it does mitigate some concerns.

And, as discussed earlier, once you provide the relevant wallet addresses, we’ll be able to get a clearer picture of actual inflation and how the outstanding supply plays out in practice.

However, the size of the allocation—100M COW—is significant, especially compared to the current circulating supply of 520M.

I assume a portion of this allocation is intended to be used as incentives for employees—on top of base salaries—to help attract and retain talent for Cow Protocol.

Plus I also recognize that you haven’t used all of the initial allocation, which reflects a level of prudence.

Still, even unused, the size alone can raise concerns among investors who have no way to gauge whether 30%, 70%, or the full 100% might be deployed over the next few years.

And if I assume the full 100M is eventually used, the number feels quite high—even for a team with a strong track record and serious ambitions to scale.

**It’s not necessarily a question of trust, but rather of perception and clarity, especially in the eyes of external stakeholders trying to assess long-term dilution risk and token value.
**
I’m also aware of your plan to share more around the roadmap and value accrual mechanisms in Q1 next year. That context will definitely be valuable, but given that it’s coming after this proposal, it may not fully address the immediate concerns some stakeholders have around timing, clarity, and alignment.

With that in mind, I wonder if we could explore a more nuanced structure—perhaps splitting the allocation and tying a portion not just to time-based vesting, but also to performance milestones.

For instance, unlocking certain tranches of tokens could be contingent on meeting clearly defined KPIs.

This kind of approach could go a long way in improving alignment between the team and token holders, and help build confidence in how incentives are structured moving forward.

Is that something the team would be open to exploring further?

The intention here isn’t to undercut the team’s contributions or risk losing key talent due to weaker incentives.

On the contrary—it’s about ensuring those incentives are structured in a way that reflects outcomes, not just time spent.

[notsoformal]

Hey @m0xt , thanks a lot for pushing on this – these are exactly the kind of questions we should be having around a 100M COW ask.

• Yes: the 100M COW top-up is meant exclusively as a team incentive pool – i.e. long-term alignment grants for contributors on top of cash compensation, not a substitute for salaries, and not a slush fund for BD deals, solver rewards, or operating expenses.
• Yes: the 4-year stream + time-based vesting was added precisely to address “quick access / rug” optics.
• No: we don’t think a protocol-level KPI-gated unlock for this pool is the right tool, even though we fully understand the intuition (“pay more when performance is strong”).
• So in practice: and we’re talking about an envelope we may use over several years, not a promise to spend 100% of it. Historically we’ve been conservative (there’s still unused allocation left from the original pool).

We completely get the intuition: “if performance is strong, unlock more; if not, go slower.” The issue is where you encode that.

Our worry with hard KPI gates on the pool itself:

1. It’s weird if, for example, security + infra + ops do everything right in a tough market, but they still get “punished” because total volume didn’t grow fast enough, or some other KPI is not reached

2. Incentivises short-termism and gaming.
   If comp is hard-wired to a couple of metrics, you tend to get:

   • “end-of-quarter” behaviour to push volume/fees at all cost;

   • reluctance to ship things that hurt KPIs short-term but are good for users or robustness (e.g. turning off misaligned fees, changing mechanics).

   • Create a “mercenary spirit”, where there is a clear incentive to capture a KPI release (e.g. reach a vesting KPI, get the tokens unlocked) and then slow efforts if the next KPI seems too far / not reachable.

3. The Core Team has historically erred on the side of user protection and mechanism soundness even when it doesn’t maximise short-term fees. We think that getting KPI gated token release will make our development less “risk neutral”.

4. Governance overhead.
   If markets, products or chains change, we’ll end up back on Snapshot every X months to “fix” KPIs that turned out to be badly specified. That makes the Service Agreement + tokenomics layer more rigid precisely when we need flexibility. To be clear:

   • the token allocation is under community control, e.g. if the community thinks the Core Team is not delivering, the Grant or/and the Service Agreement can be terminated;

   • There is a clear yearly checkpoint where we request next year’s mandate and budget, which will also work as a checkpoint for the community to raise any output / impact inconsistencies.

The question “are we over-allocating to the team?” is real, but KPI formulas inside this CIP don’t actually solve it; they just add another moving piece. Also, take into consideration that the request is 33% lower than what was done at TGE time, that the team size is growing to 50+ and expected to grow in this next four years given the development plans.

We think performance is better reflected inside the Team Grant Allocation Process managed by its dedicated Committee:

• Who gets grants at all: the Core Team may part away with underperformers and their grant is terminated accordingly.

• How big / how long those grants are: grant size, cliff and vesting can all reflect actual impact and responsibility

• DAO’s ultimate decision: the DAO can always tighten or even shrink the program through governance in case of gross misalignment

This is much more granular and closer to how you’d run performance-linked comp in any organisation, instead of gating dozens of very different roles on the same few KPIs.

Where we fully agree with you is on the need for clarity around dilution and usage. Concretely, we’re happy to move on:

1. Clear wallet labelling and reporting.

   • Dedicated Team Grant wallet tagged as such.

   • Include in the ongoing reporting by the Committee:

     • how much from the 100M has been streamed in,

     • how much has actually been granted,

     • how much has vested,

     • what’s left and a rough expected horizon.

2. Governance guardrails.

   • Make explicit in the CIP that the DAO can always pass a future CIP to slow, pause or reduce the stream if usage looks out of line. (cc @Kowrigan )

TL;DR

• The 100M top-up is only for team incentive, on top of compensation.

• It’s streamed over 4 years and then vested again to individuals – not a big one-shot unlock.

• We don’t think hard KPI-based unlocking at pool level is the right mechanism (too noisy, misaligned and brittle).

• We are very open to:

  • better labelling and reporting,

  • explicit governance levers if the pace or usage of the pool ever looks off.

Requests on wallet information:

Let’s connect over Discord to discuss this and also push that information to the documentation. We are working with the CoW Foundation to add this information in the Transparency Report (planned for February), but can work on adding information to the public documentation in the meanwhile.

[tanglin]

I’d be more than happy to support once we get more clarity on circulating vs FDV and how’s that being used (think @m0xt was working on it)! Dilution is a hard pill to swallow when token performance hasn’t been great, despite the success of the protocol.

Not get me wrong, to me all that matters at this stage is protocol success and I’ll vouch for the supply increase if that will help push us where we want to be, but imo resolving some of the question marks is crucial.

Give me revenue, give me transparency and clarity, and i’ll happily vote for that supply increase

[Kowrigan]

Dear Community,

Please find some edit in the initial proposal:

• Last paragraph of the “Contributor Alignment” section which details the wallet addresses involved as well as the suggested start date.
• The “Transaction Data” section which will execute the above in case this CIP is adopted.

[tanglin]

it may be a bit late to discuss this but has been on the table the idea of building that allocation as the protocol generates revenue (with token buybacks, no emissions) which Paired with lock-ups and vesting, this creates a long-term flywheel where more revenue drives more protocol success, which in return increase team allocation and the value of it?

Would be hard to get to desired numbers with current protocol revenue over the next 4 years?

Every stakeholder benefits from the same growth curve.

[Kowrigan]

Hi @tanglin,

Thank you for your messages, and no, it is “never too late” to ask questions and clarification.

On your question related to circulating supply: @notsoformal did provide an answer to m0xt as well as the open source tool made to calculate it. You should be able to get the ratio circulating supply vs FDV using this data See here.

The second question you raise was also answered and justified by notsoformal. Additionally, it was agreed to facilitate a tokenomics study by end of Q1 and the subsequent (Q2-Q3) delivery of a proposal to mitigate dilutions here

[m0xt]

Well the idea is to develop a more detailed and accurate understanding of the token supply, rather than simply referencing the circulating supply available on platforms like CoinGecko.

As said earlier, the team plans to establish a dedicated group to lead this effort.

But before that, it would be very helpful to compile a complete list of wallets associated with the protocol.

This will allow us to better understand the total supply, including how much is really circulating, how much has been marked as circulating but remains undistributed, how much of the remaining supply is held by DAO etc…

Ideally, the list should include wallet addresses along with a short description of each wallet’s role or mandate. This information will be important for improving the next version of the dashboard and ensuring it reflects a more accurate view of token distribution.

Perhaps we should continue this discussion on Discord, as it’s more relevant there and would help keep this thread focused on the 100M $COW allocation topic.

About that topic… I understand your points and appreciate the perspective.

That said, at this stage I believe performance-based incentives should take precedence over time-based ones. This does not mean it has to be strictly one or the other. A balanced combination could be effective.

Assuming contributors are already being paid a fair market salary for their roles (please correct me if that is not the case), I am not sure that additional time-based incentives need to be particularly generous → needs to be 100M of $COW?

More importantly, time-based structures can unintentionally discourage critical thinking, limit innovation etc… They may create a dynamic where simply aligning with leadership and blindly following their “orders” becomes more rewarding than actively challenging ideas or proposing meaningful improvements.

Again, I really appreciate all the work from the team so far, and I would welcome hearing more perspectives in this discussion.

[Kowrigan]

Hi M0xt,

Touching on the two topics you raised.

1. Token addresses

This can be handled with @notsoformal in Discord, as there is the initiative of adding context to the github project and the Transparency Report to be done in early Q1. From that source of information, we can also push the information to the CoW Documentation.

2. Vesting type

This point was also answered by notsoformal on the Core team’s position on the type of vesting. Given the way / features the Core Team has delivered, we think there is proper track record on keeping the team engaging and productive. If team members are not productive and aligned enough with the project, the Core Team has the full capacity for said individual to be parted with in the normal course of business (as this has happened in the past)

[cp0x]

Forgive me, but I’ll get straight to the point.

1. Even after reading the previous and current budgets, I don’t see any overlap – absolutely every line item and title has been changed. I understand this may not have been intentional, but then please provide a comparison for everyone that has changed.

2. If I understand correctly, marketing used to include events and travel, and now it’s +$1.6 million. Why such a large increase in expenses?
   Vesting 10% of all tokens is too much of a distribution. What’s the justification for this specific amount?
   However, there is also a distribution to the team, and it’s also increased, but it’s distributed among developers and DevOps.

3. Also, the purpose of the $1.5 million for solvers is unclear. Don’t they get a share of the profits? Why are they required to receive additional funds?

---

I would appreciate a comparison table – I would make one myself, but the information provided isn’t enough to understand which lines now correspond to which in the new budget.

[Kowrigan]

Hey @cp0x

To keep things efficient and transparent, here is the context on the changes you flagged between the agreements. A full comparison table is a great idea but for now, here is the breakdown:

1 . The new budget breakdown. This “new” breakdown follows the repartition of line of budget per activity following the legal structuring of CoW DAO pursuant to CIP-64. However, you are correct in flagging it as it should have been expressed more clearly in the section “Scope of Service and Entity Mandates”.

The main difference stands in “Team Compensation”. You can see that in the previous Service Agreement No 4 (CIP-58) Team Compensation had its one dedicated line of budget while in this new Proposal the Team compensation is included in each line of activity (i.e. Frontend Team, Backend & Smartcontract Team, Solver Team, etc…). The budget form takes into consideration the expected budget for each activity including its team, infrastructure cost related to the activity (if any), travel expenses, etc.

Providing here a comparison, but we decided the current methodology makes more sense to us as we intend to share how much we spend per “functional area” to provide the services to the DAO.

	Serv. Ag #4	Serv. Ag #5
Cost Centre	CIP Total	CIP Total	Var
Team compensation	5,398,000	8,460,000	56.72%
Third party services	517,000	1,670,000	223.02%
Events & Travel	366,000	590,000	61.20%
Network fees & testing	0	0	-
Hosting	570,000	850,000	49.12%
External tooling	144,000	330,000	129.17%
Office (& Misc costs)	42,000	500,000	1090.48%
Tax Provision	563,000	0	-100.00%
Total	7,600,000	12,400,000	63.16%

Note on the main gaps:

• Office (& Misc) - These include:
  • Smart contract audits & bounties - 100k usd
  • Business development incentives - 283k usd, for commercial payments to integrators, partners, co-payment of integration fees, targeted to ensure that we can pay integration fees that lead to significant volume growth to the DAO.
• Third party services - Increase in spend with external service providers (not core team), on initiatives like research support projects, paid ads, advertisement and placement of the brand, SEO optimisation, etc. Also includes several systems (that note software) that are directly impacted by the increase in networks.

Tax provision - Given incorporation of CoW Foundation, DevCo decreased its tax risk and hence no longer makes sense to request funds for tax provisions.

2 . Marketing & BD - The marketing & BDbudget for 2.9M includes:

• Marketing - all Core Team dedicated to that (5 team members and a prospective hire), a significant budget of 1M for paid media (which we’ll test like we did in Devconnect with wider awareness campaigns), an a reinforced budget for events (sponsorship, booths and travel)
• BD - 2 dedicated team members and 2 prospective hires. Also includes key travel and incentive budget for integrators and partners.

We find it key to double down on this area. CoW DAO product suite is top notch, and we need to ensure that it is known to all retail and used by the majority of bluechip protocols (e.g. this is the team that brought Sky, Aave and other integrations to the fray).We are moving from “maintenance” to “market capture”.

3 . Solver Funding - To clarify: this line item is not for paying the solvers themselves (who, as you noted, are incentivized by surplus/rewards via CIP-62). This budget funds the engineering and operations (including core team members) required to support the solver network. It covers the research and development of open-source drivers, improved APIs, and the technical onboarding of new independent solvers. We are building the infrastructure that allows them to compete and generate that surplus in the first place.

4 . Vesting distribution - As stated before, that requested amount is intended to align core team members and allow us to retain the help of world class contributors that are building and deploying CoW’s products. As the team size grows, overall token compensation increases as well but to reinforce, this is 5p.p lower than he initial allocation requested.

[cp0x]

Thanks for the clarification; it was really helpful.

I support the project’s development, including the Events & Travel expenses (I visited your booth in Argentina at DevConnect).

Personally, it’s important to me what the team’s goals are.
That is, there’s a task – for instance, we need 10 programmers for it, and therefore our budget is such-and-such. Then I understand exactly what’s happening and why.

However, this request isn’t very transparent, and I voted against it. I hope future budgets will be more informative regarding personnel costs.

I also saw responses regarding 100 million CoW – however, I think that’s too big a bonus for a team without clear KPIs.

[sunce86]

Please don’t find this comment malicious but isn’t it a conflict of interest for COW core team members to vote on a proposal that funds their own services?

Although my initial vote was YES considering the fact that I understand the 100M dilution and the need for it, I changed my vote to NO to support the community which is in heavy majority in this case.

Sidenote, the snapshot quorum of 35M seems too low, and it should be increased.