Empowering CoW Protocol’s Data-Driven Growth Strategy

CoW Protocol, a prominent player in the aggregator ecosystem had a general understanding of their market share but desired more-specific user analytics and competitor analysis. They needed a deeper understanding of their users' behavior and how they interacted with their products in order to strategize effectively for growth.

To address this challenge, CoW Protocol turned to Dune. First, they set up a user analytics dashboard, which enabled them to gain deeper insights into active users by segments, user retention, and LTV (life-time-value).

Snippet of CoW’s User Analytics Dashboard

Then, they implemented the Monthly Report Dashboard. This dashboard was used for a month-to-month review of CoW Protocol’s status. The entire team would come together monthly to examine the aggregator ecosystem, why a number went a certain way, and what they should do based on the data next month.

Snippet of CoW’s Monthly Report Dashboard

By building their analytics on Dune, the team uncovered several key insights. CoW Protocol discovered that while their user base was small, they had the highest retention rates of their competitive set, with users returning month after month. This learning informed their growth strategy and highlighted the need to focus on attracting new users while maintaining their high retention rates.

The monthly report dashboard also fostered a data-driven culture within the company. By sharing the report with the rest of the company, more teams became aware of their performance. This approach allowed for more informed decision-making and strategy development, contributing to CoW Protocol's growth in the aggregator ecosystem.

Automating CoW’s Solver Rewards System and Alert System

CoW Swap is a decentralized application (dApp) built on top of CoW Protocol. The platform allows users to exchange digital assets directly (peer-to-peer) and via existing decentralized exchanges and aggregators. Unlike traditional DEXs, CoW Swap users sign an intent to trade two tokens at a specified limit price, which is then handed off to third-party solvers. These solvers compete for the user's order by trying to offer the best possible price. The Protocol grants the solver that can offer the best execution price the right to settle the user's order, and rewards them for doing so.

To automate the process of calculating solver rewards, CoW Protocol uses Dune’s powerful data platform. CoW first uploads its internal data to Dune using the data upload feature. Then, the team uses a combination of internal database and on-chain data from Dune to accurately calculate the rewards. The calculated data is then sent back to CoW to distribute the reward payment. This entire process is conducted on a weekly basis, ensuring regular and timely payments.

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One of the key aspects of this system is its transparency. The calculated reward data is not only used for distribution but is also made publicly accessible and verifiable. This transparency is crucial as it allows anyone to monitor the performance of each solver and gain insights into the overall operation of the protocol.

Snippet of CoW’s Solver Rewards Dashboard

In theory, solvers can be malicious and trick the protocol (though they will be slashed for doing so). To combat fraud, CoW Protocol implemented a robust alerts system with Dune queries to monitor malicious behavior solvers. The alerts system is designed to trigger whenever a certain threshold is met. The alerts are sent to the protocol's Slack channel, ensuring immediate attention and action.

Results

CoW Protocol’s integration with Dune has been instrumental in automating its workflows, enhancing its understanding of users and strategic planning, and ensuring transparency. This comprehensive utilization of Dune's robust data platform has empowered CoW to optimize operations and guide data-driven growth in the aggregator ecosystem.

Automating production workflows with reliable data is one of the many ways ambitious DeFi teams depend on Dune for accuracy and transparency. Create a team on Dune to discover how our data solutions can solve a variety of use cases for your business. For a customized solution tailored to meet your needs, please contact us. Experience the Dune difference and elevate your organization to new heights.