MuesliSwap, a Cardano-based decentralized exchange (DEX), announced on Wednesday that it would be refunding users who lost money due to a misunderstanding about how slippage works on the platform. Market makers, or trading participants who fill buy and sell orders, were able to fill the limit order and choose whether to return the additional slippage amount or retain the difference at their discretion, developers said in a tweet. Slippage occurs when a market participant receives a different trade execution price than intended due to factors such as available liquidity. On DEXs, users can manually set a slippage level they are comfortable with.
However, MuesliSwap users have been setting – and thus paying – high slippage for at least a year due to the way the decentralized matchmaker was set up. This custom slippage was intended to be an incentive for decentralized matchmakers, but it caused some misunderstanding among new users. To make up for this, MuesliSwap will be refunding users who encountered high slippage on the platform in the last 12 months from their project funds. Additionally, they have taken immediate action to fix the slippage issue in the MuesliSwap order book.
The refund process may take up to four weeks and funds will be automatically distributed by analyzing a user’s on-chain trading history. MuesliSwap currently locks over $10 million worth of various tokens and is one of the most-used platforms on the Cardano network. According to DefiLlama data, it has traded over $500 million worth of tokens in the past year.