How solvers use external market makers

An external market maker is a professional liquidity provider that offers a price for a token trade outside a public on-chain pool. The key condition is whether its quote remains valid and delivers more to you, after costs, than the other routes available before your order’s limit is reached.

Solvers compare maker quotes with other routes

When you trade from a centralised exchange, its order book or market maker handles the other side of your order. In a wallet-based swap, you sign an order describing what you want to sell and the minimum you will accept; a solver searches for a way to fulfil it. That may involve a public pool, another trader in the same batch, or an external market maker.

A market maker can offer a direct quote, much like a request-for-quote service: a price for a particular token pair and trade size. The solver checks that quote against available on-chain liquidity and other sources. It then builds a proposed settlement, including the steps needed to bring the maker’s liquidity into the trade. The market maker is a source of liquidity; the solver assembles and submits the winning route.

In CoW Swap, solvers can combine private quotes with public liquidity while competing to settle a batch. The cowswap interface lets you submit the signed trade intent; solvers do the routing work behind it. A quote from one maker does not automatically win: the proposed settlement must satisfy your order and compete on the value it delivers.

For example, say you offer 1,000 USDC and want at least 0.49 ETH. One maker quotes 0.498 ETH, while a pool route would return 0.496 ETH after its price impact and fees. If the maker quote is still executable and the complete settlement costs do not erase the difference, the solver has reason to use it. If your minimum is 0.50 ETH, neither route qualifies, so the order should remain unfilled rather than silently accept less.

The displayed amount depends on more than the maker’s price

A maker’s quote is not the same as your final net output. Its spread—the gap between the price at which it buys and sells—compensates it for inventory, volatility, and operating costs. The solver also considers settlement gas, any applicable order or protocol fees, and whether other trades in the batch can reduce the amount of external liquidity needed.

That means a quote that looks best per token can lose once all the pieces are counted. A route may use a maker for most of the order and a pool for the remainder, for example; the blended result matters. In the cowswap flow, check the quoted receive amount after fees and set a minimum you would genuinely accept, rather than judging the route by its source or headline price alone.

Most swaps begin with an off-chain signature, so placing an order does not itself submit a transaction. An ERC-20 token may need a one-time approval before it can be used, and the eventual settlement still takes place on-chain. The quote can also be size-limited or time-sensitive: if the maker’s price changes or its available inventory is used up before settlement, the route may no longer work. Your signed minimum protects the trade from executing below its terms, but it cannot guarantee that a fill will be available.

Your minimum and the available quote decide the trade

Before signing, check the sell amount, estimated receive amount, minimum receive amount, and order expiry. For a market order, the minimum usually reflects the slippage tolerance you chose; for a limit order, it is the price boundary you set. A tighter minimum protects your price but can leave the order waiting or unfilled if maker quotes move away.

I would use a market order when I need a prompt swap and the displayed minimum still makes sense; I would use a limit order when price matters more than timing. If the pair is thin, the trade is unusually large, or only one quote appears, I would lower the size or wait for a better opportunity. Those conditions change whether a maker’s apparently attractive quote is a practical route at all.

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