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MuesliSwap is a decentralized exchange (DEX) on the Cardano blockchain that enables you to trade Cardano native tokens.
Backed by a newly developed token swapping protocol, MuesliSwap aims to become the go-to DEX on Cardano. MuesliSwap uses a hybrid trading model with an on-chain order book connected to liquidity pools, providing crypto traders with features like limit orders. In this model, there is no central order matching authority. Instead, order matching is incentivized and can be performed by anyone, subject to rules fixed in a smart contract.
MuesliSwap distinguishes two types of users, traders and matchmakers.
- Traders place orders (buy or sell) using the web interface. An order is simply a transaction offering to buy or sell a certain token at a certain price. Upon confirming the trade with a Cardano wallet (such as Nami), the order is locked in a smart contract on the blockchain as a EUTxO.
- A matchmaker constantly scans the blockchain for open buy and sell orders. When such matching orders are found, the matchmaker executes a transaction, fulfilling the order and sending the assets to the respective parties. For this, the matchmaker obtains a small fee. Orders can also be fulfilled using liquidity from liquidity pools.
The orders are locked in a smart contract in the form of an UTxO, and can be unlocked by matchmakers only for a trade that satisfies the trader's demanded limit price. An order may be partially filled, resulting in a new order that buys or sells the remaining token amount. A pending order may be canceled at any time by its creator, unless it has been completely filled already. If it has been partially filled, a cancel retrieves the remaining order and the part of the order that has been filled already.
We have created an exhaustive blog post about the detailed trading concepts of MuesliSwap on Medium, check it out here: https://medium.com/@muesliswap/muesliswap-presents-the-protocol-powering-cardanos-first-dex-3db25a844245