- Cardano Decentralized exchange MuesliSwap is under scrutiny for its trading system.
- MuesliSwap traders have been paying market makers without intending to.
- MuesliSwap looks to clear the air and fix the situation.
Cardano-based Decentralized exchange MuesliSwap is under a lot of heat after users incurred substantial losses due to a critical error within the platform’s system.
To remedy the situation, the Cardano exchange is taking necessary steps to fix the issue, including issuing reimbursements to affected users and acknowledging that it didn’t provide adequate clarity for the feature within its protocol.
MuesliSwap Issues Returns
On August 8, the MuesliSwap development team notified users of a critical problem with its order book system. The exchange noted that its decentralized matchmaker setup allowed trading participants to fill limit orders and choose whether to return the additional slippage amount or retain the difference.
In trading, slippages happen when users receive a different trade price than intended due to low liquidity. Given that assets on Decentralized exchanges often lack liquidity, users manually set a preferred slippage level to ensure their orders are executed.
Interestingly, MuesliSwap users incurred high slippage to market makers due to how the system was set up. The exchange shared that it intended to use the custom slippage system to incentivize matchmakers, yet it inadvertently led to confusion among users.
To clear the air, the platform announced that it would refund users affected by the critical error over the past year via its project funds. Over the next month, the MuesliSwap team will work to gather the necessary data and implement the distribution code. Additionally, the developers have taken immediate steps to fix the slippage issue.
It’s worth noting that MuesliSwap addressed the issue after users shared their frustrations with the platform’s high slippage issue on digital forums. Some traders have even pointed out that the issue seems prevalent across all Cardano decentralized exchanges.
MinSwap, WingRiders, and other Cardano exchanges have not addressed the slippage issue at the time of writing.
On the Flipside
- While MuesliSwap plans to refund its users, it has yet to provide an estimate of how much it will refund.
- MuesliSwap is the sixth-largest DeFi platform and the second-largest DEX on Cardano.
Why This Matters
MuesliSwap’s decision to refund users for its mistake is commendable. Not many decentralized exchanges or Web3 platforms would address the issue with the same transparency and accountability.
More on Cardano:
More from Charles Hoskinson: