[BIP-931] Balancer x CoWSwap Tokenswap and token purchase

Governance General Proposal
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Balancer x CoWSwap Tokenswap and token purchase

Simple Summary

This BIP proposes that Balancer DAO and CoW DAO revert the tokenswap performed under BIP-770, with COW DAO Managed Treasury purchasing the remaining COW owned by Balancer DAO at a 15day TWAP.

Motivation

In January 2025, Balancer DAO and CoW DAO executed a tokenswap under [BIP-770] of 200,000 BAL for 631,850.824075 COW, with a two-year hold period, to support the launch of CoW AMM on Balancer infrastructure.

The orderly winddown proposal changes the purpose of both positions. Balancer DAO will distribute its treasury in kind and pro rata, with round one opening at the end of May 2027. Distributing COW in kind spreads an illiquid governance token across thousands of redeemers, each of whom must then sell it. Selling it on-market between now and May 2027 exposes the DAO to 8 months of price risk on a position it no longer holds for any strategic reason.

CoW DAO’s Treasury committee is currently offering to remove this risk by allowing Balancer DAO to convert the full position to ETH at a fair reference price, in a single transaction, with no market impact and no execution burden on the transition team.

Rationale

Based on current data from Balancer portfolio, Balancer DAO holds a total of 1,179,455.7313 COW, of which 631,850.824075 are locked under governance proposal until January 2027. Given the current 15day TWAP price of COW / ETH= 0.00005518429144, this operation would entail the return of 200k BAL and a payment of ~30.22 ETH for Balancer DAO’s COW holdings.

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TWAP price calculation: 2026.09.21 - Balancer token swap (ext)

Specification

Token swap would occur under guidance of @kpk as the mandated treasury manager for both DAOs.

Edit: Amounts were updated as per Balance treasury council communication on held COW.

1 Like
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In support of this proposal. Thank you for bringing it forward, @notsoformal. Since this proposal was brought up, today the Treasury Council, as agreed with @kpk, has revoked the TWAP order for selling COW tokens (held outside BIP-770) that was put in place last week.

It would be fair to CoW DAO that we revert the deal, and to honor our partnership for so many years, that we accept this offer. There’s also a marginal gain for the redeemed portion since BAL is trading currently below NAV, and the remaing purchase in ETH will carry the market upside mentioned by @Fernando in the winddown proposal.

The total amount of COW tokens held can be verified in the Treasury.

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Also generally in favor of this proposal, but I think using the 30-day TWAP is biased as the price of COW has increased quite a bit in that period:

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Would you suggest that had the price gone in the other direction?

I guess the purpose of doing a TWAP is to avoid price manipulation, which I would doubt would happen in this relatively small swap. I’d agree to using the TWAP of the last 2 or 3 days before the execution so the fair price is used.

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Hello @Fernando ,
The rational of a 30d TWAP was on one hand to average out the price, and second to align with the TWAP that the Balancer treasury already had running (30 parts,509k COW sold at a limit price of 0.119737).

The COW Managed Treasury rational was that any price execution above the Balancer defined limit price would be a reasonable offer.

If the Balancer community feels strongly, I feel that that doing a 15day twap (mid-range from 30d to last day closing) would be reasonable:

COW= 547,604.91 units
COW / ETH= 0.00005468357725
ETH Payment = 29.95

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Thanks for the context.

I think even though the difference is small it makes a lot more sense to use a value closer to the market value, so 15d is much better than 30d.

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Hi @Fernando , I’ve proceeded with the adjustment, in spirit of alignment.
If there are no further developments in the next days, would be great to see this proposal move to voting.

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https://snapshot.org/#/s:balancer.eth/proposal/0x226fb6694d559008975f64474f34620ffa33173c8afb97d8a6985243bf474a9e