Bonding Criteria for Colocated Drivers

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Proposed Bonding requirements

Current

• $500k yield bearing stable coin
• 1.5M COW (no specific $ value)

New (fully permissionless)

• Keep amounts
• Add yield-bearing ETH (value at 2-3k)

New (with autopilot signatures)

• 100k yield baring stable or ETH
• 1M COW

Transition Plan

• Allow selected solvers that are currently part of the CoW DAO bonding pool to run their own driver with the limited bonding requirements
• Require solution submission via MEV Blocker with all refunds going towards increasing the bond
• Additionally, require 25% of COW rewards need to go towards building a the full pool
• As soon as autopilot signatures are ready (and full bonding pool size is not reached, require use of autopilot signatures)
• Starting in Q3, solvers that want to continue using our driver should pay 25% of CoW rewards to CoW DAO

Open questions

• Are we willing to give up MEV Blocker rewards? (~3 ETH per day, 1/3 from Otex, Barter, Copium)
• How much CoW are we willing to spend on incentivizing running your own driver?

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Summary of call with Copium:

• Opportunity cost of locked capital (wants to start market making)
• Wouldn't want to run our version of the driver (write their own driver from scratch)
• ~2 weeks of work (if he gets to focus on it)
• Could pledge 50k USD, 400k CoW
• Wasn't aware of MEV Blocker rewards (would be willing to use those to further build up the bonding pool)

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Summary of call with Barter

• Happy to post their proposal
• Would run the vanilla driver initially
• Are ok with putting up the entire bond
• Looking for some form of extra incentive but giving soft commitment

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Summary of call with Rizzolver

• Would be excited to have more control over the submission (would allow them to quote tighter)
• Full bonding pool is too capital intensive (opportunity cost)
• Reduced requirements sound good, they have ~400k CoW (don't necessarily want to buy due to illiquidity not able to hedge, want to stay market neutral)
• Ressources are stretched (end of quarter is too tight, end of year possible)
• Would take them 1-2 months
• Not interested by extra incentives