2025/07/14 by Nag, Abhimanyu, Madhur Prabhakar, Prabhakar, Madhur +2
Business, Management and Accounting · #Computational Engineering #Computer Science and Game Theory (cs.GT) #Corporate Finance and Governance #Corporate Governance and Law #Corporate Insolvency and Governance #FOS: Computer and information sciences #FOS: Economics and business #Finance #Trading and Market Microstructure (q-fin.TR) #and Science (cs.CE)
paper · pdf · doi:10.48550/arxiv.2507.10149
openalex publication_date 2025/07/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We propose a mathematically rigorous framework for identifying and completing Coincidence of Wants (CoW) cycles in decentralized exchange (DEX) aggregators. Unlike existing auction based systems such as CoWSwap, our approach introduces an asset matrix formulation that not only verifies feasibility using oracle prices and formal conservation laws but also completes partial CoW cycles of swap orders that are discovered using graph traversal and are settled using imbalance correction. We define bridging orders and show that the resulting execution is slippage free and capital preserving for LPs. Applied to real world Arbitrum swap data, our algorithm demonstrates efficient discovery of CoW cycles and supports the insertion of synthetic orders for atomic cycle closure. This work can be thought of as the detailing of a potential delta-neutral strategy by liquidity providing market makers: a structured CoW cycle execution.