Creators of MuesliSwap, a decentralized exchange operating on the Cardano blockchain, have chosen to reimburse users who encountered significant slippage during the previous year. On August 8th, the MuesliSwap team acknowledged that they had failed to sufficiently elucidate the slippage mechanism within their protocol.
“To make amends, we will be refunding affected users who encountered high slippage on the MuesliSwap pools in the last 12 months from our project funds.”
Slippage refers to the price difference between the transaction submission and blockchain confirmation.
The users of MuesliSwap had been experiencing elevated slippage levels for over a year due to the setup of the decentralized matchmaker. This matchmaker, which was responsible for pairing buy and sell orders, had the discretion to either return the extra slippage amount or keep the difference, creating confusion for users.
In response, the team swiftly implemented measures to resolve the slippage concern within the MuesliSwap order book. Users had expressed worries about slippage across different Cardano decentralized exchanges (DEXs). Reports indicate that MuesliSwap was actively developing a DEX aggregator with the aim of reducing losses linked to slippage by dividing substantial trades.
Despite being the fifth-largest protocol on Cardano, with a total value locked (TVL) of $17.3 million according to DeFiLlama, MuesliSwap’s has experienced a 27% drop in TVL since the beginning of the month and 68% since its peak in April 2022. In December, MuesliSwap introduced an “organic APR” feature, which increased token emissions as liquidity in pools grew, aiming to incentivize users to provide collateral.