A Co–Ag potential in the form of TB-SMA (the second moment approximation of the tight-binding scheme) is derived based on some ab initio calculated physical properties. Applying the derived potential, molecular dynamics simulations reveal that a Co-/Ag-based solid solution retains its atomic homogeneity up to a critical ratio of9 Ag/12 Co at.%, over which the Ag/Co solute atoms begin to segregate. Correspondingly, a cage-like configuration is proposed to have 1 Ag/Co atom isotropically surrounded by 9 Co/7 Ag atoms for the homogeneous solid solution. Moreover, when the solute atoms exceed 12 Ag/18 Co at.%, the solid solution turns into an amorphous phase with inhomogeneous atomic structure.