CIP: <to be assigned when moved to phase 2>
title: Distributing COW rewards on mainnet for all chains
author: @harisang , @notsoformal and Core Team
status: Draft
created: <2025-06-03>
Simple summary
With CIP-57, CoW DAO has decided that COW rewards must be distributed as part of the rewards mechanism of the solver competition in each chain the protocol operates. As the protocol is aiming to expand on more chains, technical issues might arise around the bridging of the COW token to the respective chain.
To resolve this, we propose that COW rewards, awarded to solvers in any of the chains the protocol is active, will be distributed only on mainnet. This will allow both the DAO and the solvers to manage COW inventory more easily and uniformly.
Regarding protocol fees, which are intended to be paid back in COW, CIP-38 provides the flexibility to solvers to pay back the protocol in COW or in ETH. If the protocol fee is collected in ETH, or more precisely, the native currency of the chain, we propose that this amount is bridged to mainnet and converted into COW on mainnet.
Motivation
The rewards mechanism with its COW rewards has proved instrumental in helping the protocol establish a very strong competition among solvers. As the DAO aims to activate the same rewards mechanism in every chain the protocol will be active, as decided in CIP-57, it is crucial to establish a sustainable and simple way of distributing the COW rewards.
On its initiatives to expand to new Networks, the Core Team was faced with several challenges on bridging COW to some of these networks, creating a deployment blocker.
Bridging COW to a new network involves more than simply making the token available. It also requires ensuring sufficient liquidity and accessibility; otherwise, shallow markets can be exploited by bad actors for manipulation. To avoid this, the token should only be bridged once there is organic demand on the target network, enabling the formation of a healthy market.
Furthermore, distributing liquidity across multiple chains can fragment the market and reduce efficiency. Additionally, some networks lack native bridges, relying instead on third-party solutions run by specific projects — a setup that introduces significant risk.
While the team still expects to pursue the opening of native bridging of COW token, in order to avoid dealing with technicalities and issues around bridging that are chain-specific, we propose that the DAO starts paying COW rewards only on mainnet, regardless of the chain that these rewards were initially awarded. This, for example, means that a solver that operates on Arbitrum, would get rewarded according to the caps on Arbitrum, but then the DAO would distribute these COW rewards on a mainnet wallet of the solver’s choice.
Regarding protocol fees, we propose that solvers pay them either in COW or in the native currency of the chain. Specifically, if solvers decide to pay protocol fees in COW, this payment should be executed on mainnet, while if solvers pay back in the native token of the chain, this payment should be executed on the corresponding chain. We further propose to modify the clause of CIP-38, and instead of converting all protocol fees collected in the native token to COW, we propose to bridge all protocol fees on mainnet, and convert a sufficient amount (all, if needed) to cover the COW emissions due to solver rewards.
Specification
We propose that COW rewards start being distributed exclusively on mainnet rewards addresses starting with the accounting week of June 24-31, 2025. In the meantime, the core team will work with all solver teams on all chains to ensure that revouching of all solvers is executed until June 30, 2025, on mainnet rewards addresses, so that the distribution on June 31, 2025, can be executed on mainnet only.
Moreover, the core team commits to executing the systematic bridging of protocol fees collected in the native token to mainnet, and converting a sufficient amount of those to COW to match COW emissions for solver rewards.