On August 9th, the group behind the decentralized exchange MuesliSwap, built on the Cardano platform, made a decision to refund users who had experienced high slippage fees over the past year.
Specifically, on August 8th, the MuseliSwap team admitted that they had not provided “sufficiently clear information” about the slippage feature within their protocol. This led to MuesliSwap users having to pay high slippage fees for at least a year, due to the way their decentralized automated market maker (AMM) tool was set up.
The group stated, “To rectify this, we will refund affected users who have incurred high slippage fees on MuesliSwap over the past 12 months from our project fund.”
MuesliSwap also noted, “Intermediate brokers seeking to match and execute orders can adjust the limit and choose to refund additional slippage fees or retain the price difference as they decide.”
Prior to this, numerous users had raised concerns about slippage on all Cardano decentralized exchanges (DEXs). One user shared their perspective on August 4th, saying, “Currently, executing a large trade on any Cardano DEX can lead to significant slippage fees, causing the transaction value to decrease by a considerable percentage.”
The MuseliSwap team mentioned that they were implementing a consolidated DEX tool to address the slippage issue, by breaking down large trades and limiting losses caused by slippage.
In this context, slippage refers to the price difference between the time a trade is sent and when it’s confirmed on the blockchain. This disparity often incentivizes decentralized intermediaries, but it also confuses users.
Presently, MuesliSwap is the fifth-largest decentralized protocol on Cardano, with a total locked value of $17.3 million USD, according to data from DeFiLlama. However, MuesliSwap’s TVL has decreased by 27% since the beginning of the month and 68% from its all-time high in April 2022.
In December 2023, MuesliSwap introduced the “Organic APR” feature to increase token issuance as more liquidity gets channeled into pools, as a way to encourage users to add collateral assets.