- MuesliSwap acknowledges transparency lapse over the slippage feature.
- Many users experienced value reduction in transactions due to high slippage.
- The exchange plans to reimburse affected users and take corrective measures.
Cardano-based exchange MuesliSwap recently came forward about a clarity oversight on a feature within their system known as “slippage.” The exchange recognized on August 8 that they had fallen short in effectively communicating the workings of this feature to their user community.
“Slippage” simply means the change in price between when a user starts a transaction and when that transaction gets confirmed on the blockchain. Over the past 12 months, a considerable number of MuesliSwap users noticed that the slippage they experienced was more than they anticipated, which consequently lessened the effectiveness of their trades.
Delving deeper into this matter, it was found that decentralized matchmakers on MuesliSwap, those responsible for connecting buyers and sellers, had a decision to make. They could either return the extra funds caused by slippage to users or retain the extra for themselves. This design, intended to encourage the matchmakers, ironically ended up puzzling many who used the platform.
In response, MuesliSwap expressed intentions to refund users impacted by this high slippage issue from their own funds, covering events from the last 12 months. They’ve also initiated action to mend the existing slippage challenge in their system to thwart similar problems down the line.
It is essential to note that the slippage dilemma is not just a MuesliSwap concern. Other exchanges on the Cardano network have been in the hot seat for analogous issues. Just a few days earlier, on August 4, a trader highlighted that making a substantial transaction on any Cardano-based decentralized exchange might lead to noteworthy slippage, which could eat into the transaction’s value. There’s been talk about MuesliSwap exploring ways to spread out larger transactions to cut down losses because of slippage.
Currently, MuesliSwap is recognized as the fifth most significant protocol on the Cardano network with assets worth $17.3 million locked in. However, this month hasn’t been kind to them. Their total locked value has dipped by 28% since its beginning, and a sharp 69% drop from its highest value recorded in April 2022.
In a move to inspire users to pool more liquidity last year, MuesliSwap rolled out a feature that increased token rewards as more capital was gathered.
Difference of Cardano-Focused DEXs
Cardano has emerged as a trendsetter with its novel DEXs. Taking a leap from the traditional proof of work (PoW) systems, as seen in Bitcoin, Cardano employs an energy-efficient proof of stake (PoS) mechanism. This not only rewards those who secure their Ada tokens but also ensures efficient block creation based on the staked tokens.
Another feather in Cardano’s cap is its advanced smart contract features. The recent Alonzo update has transformed the platform, paving the way for the inception of smart contracts, management of diverse assets, and even the burgeoning world of non-fungible tokens.
While Cardano and Ethereum both act as foundations for decentralized apps and smart contracts, Cardano stands apart. Boasting of enhanced scalability, reduced transaction expenses, and improved energy efficiency, it also gains an edge with a robust academic endorsement, hinting at a future where it might outpace Ethereum’s capabilities.
With a mission to bridge the banking divide, it charts its development journey through distinct eras, each symbolizing pivotal milestones. The much-anticipated Voltaire era is on the horizon, aiming to reshape voting and treasury functions, nudging Cardano closer to its goal of full decentralization.
