The team behind MuesliSwap, a decentralized exchange (DEX) built on the Cardano blockchain, has decided to refund users who have been affected by high slippage over the past year. In an announcement made on August 8, the MuesliSwap team acknowledged that they did not provide sufficient clarity on the slippage feature within their protocol.
Slippage refers to the difference in price between when a transaction is submitted and when it is confirmed on the blockchain. MuesliSwap users have been experiencing high slippage for at least a year due to the decentralized matchmaker’s setup. The matchmakers, which are responsible for scanning and matching buy and sell orders, were able to determine whether to return the additional slippage amount or keep it for themselves.
While this slippage difference served as an incentive for the matchmakers, it caused confusion among users. To rectify the situation, MuesliSwap has decided to refund affected users who encountered high slippage on the platform’s pools over the last 12 months using project funds. In addition to the refunds, immediate action has been taken to address the slippage issue in the MuesliSwap order book.
The problem of slippage is not unique to MuesliSwap. Users have been reporting slippage issues on all Cardano-based DEXes. One trader took to Twitter on August 4 to highlight the problem, stating that completing large trades on any Cardano DEX is subject to significant slippage, which diminishes the trader’s value by a large percentage. The trader mentioned that MuesliSwap was supposedly working on a DEX aggregator to split large trades and mitigate losses caused by slippage.
Despite the slippage issues, MuesliSwap remains one of the largest protocols on the Cardano blockchain, with a total value locked (TVL) of $17.3 million, according to DeFiLlama. However, the TVL of MuesliSwap has dropped by 27% since the beginning of the month and is down 68% from its all-time high in April 2022.
In December, MuesliSwap introduced an “organic APR” feature, which increased token emissions as more liquidity was added to the pools. This was intended to incentivize users to provide collateral. The protocol received both praise and criticism for this initiative.
In conclusion, the MuesliSwap team has acknowledged their failure to provide adequate clarity on the slippage feature and has taken steps to address the issue. By refunding affected users and working to improve the slippage problem, the team aims to regain trust and ensure a smoother trading experience on the platform.
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