CoW Protocol's CIP-74 reward reform concentrated large-order trading value onto incumbent solvers and dispersed small-order value, without changing average execution quality or trade-count concentration.
Quantifying Price Improvement in Order Flow Auctions
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abstract
This work introduces a framework for evaluating onchain order flow auctions (OFAs), emphasizing the metric of price improvement. Utilizing a set of open-source tools, our methodology systematically attributes price improvements to specific modifiable inputs of the system such as routing efficiency, gas optimization, and priority fee settings. When applied to leading Ethereum-based trading interfaces such as 1Inch and Uniswap, the results reveal that auction-enhanced interfaces can provide statistically significant improvements in trading outcomes, averaging 4-5 basis points in our sample. We further identify the sources of such price improvements to be added liquidity for large swaps. This research lays a foundation for future innovations in blockchain based trading platforms.
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2026 1verdicts
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Incentives and Market Structure in Intent-Based Exchanges: Evidence from a Solver-Reward Reform
CoW Protocol's CIP-74 reward reform concentrated large-order trading value onto incumbent solvers and dispersed small-order value, without changing average execution quality or trade-count concentration.