MuesliSwap, a Cardano-based decentralized exchange, has apologized to its users for causing them to lose money due to a misunderstanding of how the slippage mechanism works.
MuesliSwap Will Compensate Users
MuesliSwap, a DEX that allows users to exchange tokens on the Cardano blockchain, said in a statement today that it will refund affected users from the project funds.
Slippage is a common phenomenon in trading where the actual price of an order differs from the expected price due to market fluctuations or liquidity constraints.
In most DEXs, users can set a maximum slip tolerance to limit their exposure to price changes. But in MuesliSwap, slip tolerance is not a hard limit, but a voluntary incentive for market makers.
Market makers are investors who provide liquidity to the DEX by filling buy and sell orders. In MuesliSwap, they had the option to either refund the excess swipe to the user or keep it to themselves.
This feature was intended to attract more market makers to the platform, but it also confused some new users who did not know how it works.
As a result, some users had to pay high slippage fees to market makers, not realizing they could pay less.
According to MuesliSwap's tweet, this issue has been going on for at least a year and affects users who have traded in MuesliSwap pools in the past 12 months.
To remedy the situation, MuesliSwap said it will refund users who face high slippage from the project funds.
The refund process can take up to four weeks and will be done automatically by analyzing users' on-chain transaction history.
MuesliSwap also said that it has taken immediate action to resolve the issue of slippage in the order book, possibly by making it more transparent and user-friendly.
*Not investment advice.
