Aave Trade Breakdown

On July 10th, 2023, After a successful governance vote from Aave DAO, CoW Swap processed a large LP position trade for Aave using the exchange’s signature intent-based trading design and Milkman contract.

Since then, Aave completed another trade totaling $1,948,000 with the goal of treasury diversification.

1st Trade Details

Aave DAO acquired a direct position in the B-80BAL-20WETH Balancer pool by swapping their entire aBAL & aWETH balances. The trade occurred over two transactions (Transaction 1) (Transaction 2).

• USD value of the trade: $2,026,573.69
• Amount the DAO received: 157,169.86 B-80BAL-20WETH, with an average BPT price of $12.89
• Slippage tolerance: 1.5%
• Actual slippage: 1%
• Positive difference compared to direct deposit: 1,918.72 units of B-80BAL-20WETH
• Positive difference due to slippage: 556 units of B-80BAL-20WETH

2nd Trade Details

Aave DAO swapped DAI to USDC for treasury diversification purposes. This trade also occurred over two transactions (Transaction 1) (Transaction 2).

• USD value of the trade: $1,937,476
• Amount the DAO received: 1,937,476 USDC
• Price Surplus: $9,699.15

Why CoW Swap?

CoW Swap’s solver competition ensured that Aave received the best possible execution price, even after announcing trade details publicly in a governance proposal ahead of time.

Compared to a direct deposit, CoW Swap provided several benefits for this trade:

1. Protection from attack vectors caused by the delayed execution
2. The minimum amount in a direct deposit proposal would have been uncertain, requiring a high slippage tolerance to successfully execute the trade, which in turn would expose the trade to MEV bots
3. Use of the Milkman bot for protection against MEV, slippage, and re-entrancy risk

Milkman

The CoW Grants Program-funded, and Yearn.fi-developed Milkman bot was critical to the Aave trade.

The Milkman bot ensures that trades execute for the real-time price or better by utilizing a price checker, such as a Uniswap v3 pool, Chainlink oracles, or a custom price checker. Instead of setting a slippage tolerance, DAOs can utilize Milkman to determine a maximum percentage deviation from the price checker, guaranteeing that their trade will finalize at a fair market price. Milkman also simplifies governance for trades as DAOs don’t have to define a fixed price re-vote if the market moves significantly.

For this swap, Aave DAO chose the Chainlink oracle as their price checker, guaranteeing that they would receive no less than the minimum specified in the governance proposal.

CoW Swap: The leader in DAO trading

The largest DAO trades take place on CoW Swap, and the exchange is single-handedly responsible for more than 30% of all DAO trades. Check out CoW Swap for DAOs to learn why DAOs such as ENS, Nexus Mutual, and more trust CoW Swap with their large trades.

If you’re a DAO looking to make a large trade on CoW Swap, get in touch with us on Twitter or through our Discord. You can check out CoW Swap for yourself here.