CIP-Draft: Simplifying the operations of the CoW DAO bonding pool

Governance
8

Agree with simplifying the operations, and we understand the systemic risk of having too many solvers rely on the DAO pool long term.

We recently joined the protocol as a new solver team (Nexroute) on BNB Chain. As we work to stabilize and optimize our setup, we are experiencing firsthand the heavy infrastructure costs required to remain competitive. To keep contributing to the protocol’s execution quality, covering these out-of-pocket costs is our immediate priority. The proposed flat 30% cut from day 1 conflicts with the goal of attracting new solvers and pushing them toward self-bonding for two main reasons:

  1. Slowing down capital accumulation: The first 6 months are the most expensive for a new solver due to node setup, human resources, and optimization costs. New solvers also operate at lower matching efficiency early on, meaning thin or negative margins.
    • The 20% HODL from day 1 locks up critical operational cash right when expenses are highest. A solver cannot accumulate a bond if they run out of liquidity and go bankrupt in month 3.
    • The 10% service fee permanently extracts capital (going to the DAO instead of the Solver Bond Safe) that could otherwise be used to fund the bond. Combined, reducing available rewards to 70% from day 1 actually delays the time it takes to reach a reduced or full bond, keeping solvers dependent on the CoW DAO bonding pool for longer.
  2. No economic incentive for reduced bonds: Under the current draft, a solver that locks up 200k USD in stables/ETH of their own capital (or reaches it via HODL) pays the exact same 10% fee and 20% HODL as a solver with no initial bond. While they get driver autonomy, there is no financial incentive to tie up capital and take on slashing risk.

We can solve both issues without adding governance overhead by using a standardized ramp. Since reward distributions are already script-driven, applying a time-based rate based on a solver’s onboarding date is trivial to automate and adds close to zero manual tracking overhead for the core team:

For solvers in the CoW DAO bonding pool (without a reduced bond):

  • Months 1-6: 0% fee / 0% HODL (100% liquid) → gives new teams runway to bootstrap, optimize, and prepare for the accumulation phase.

  • Months 7-10: 10% fee / 10% HODL (80% liquid)

  • Month 11+: 10% fee / 20% HODL (70% liquid)

For solvers with a reduced bonding pool (200k USD in stables/ETH, or 100k USD + 0.5M COW):

  • 5% fee / 10% HODL (85% liquid). This recognizes the capital risk the solver is taking, and provides a clear financial incentive to self-fund or reach this tier quickly.

  • If a solver joins the pool with a reduced bonding pool from day 1, they get the same 6-month grace period (0% fee / 0% HODL) to cover setup, followed by the 5% fee / 10% HODL rate.

For solvers whitelisted under their own full bond:

  • 0% fee / 0% HODL (100% liquid), as proposed.

This keeps the rules simple and automatic, but ensures the onboarding funnel remains viable and rewards solvers who de-risk the DAO. Voting now without addressing these points seems premature.