Cardano Based MuesliSwap, a decentralized exchange (DEX), announced its plans to refund users who suffered losses due to excessive slippage settings. The company attributes these issues to a “misunderstanding” concerning the way slippage functions within the platform.
Cardano Based MuesliSwap to Refund ‘High Slippage’ Losses for Users
In the context of trading, slippage refers to the difference between the expected price of a trade and the price at which it is actually executed. On DEXs like MuesliSwap, users can manually set the slippage level they are comfortable with.
Due to the way MuesliSwap’s decentralized matchmaker was designed, users have been setting and consequently paying high slippage, leading to unintentional losses. Market makers were allowed to “fill the limit order and choose whether to return the additional slippage amount or retain the difference at their discretion.”
The custom slippage setting was meant to incentivize decentralized matchmakers, but it resulted in confusion among newer users.
The Refund Process
MuesliSwap’s developers have vowed to refund affected users who encountered high slippage in the platform’s pools over the past year. The refunds will be financed from the project’s funds.
To address the underlying issue, immediate action has been taken to fix the slippage problem within the MuesliSwap order book.
The refund process is expected to take up to four weeks, with funds being automatically distributed based on an analysis of users’ on-chain trading history.
Implications and Concluding Thoughts
MuesliSwap’s decision to refund users showcases a commitment to transparency and customer satisfaction. The measure not only seeks to restore trust among the platform’s users but also highlights the inherent complexities and potential misunderstandings associated with decentralized finance (DeFi).
As DeFi platforms grow in popularity, clear communication and user education become essential to ensure that users understand the unique mechanics of decentralized exchanges. MuesliSwap’s situation illustrates the importance of accessible and comprehensible user interfaces and instructions, particularly in a space as intricate and dynamic as DeFi.
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