Matchmaker Governance

Introducing our efforts into Matchmaker Governance and Monitoring

Our DAO governance is currently available on the Cardano PreProd Network https://preprod.dao.muesliswap.com

Motivation: Why We Need Matchmaker Governance

In many decentralized applications (DApps) on Cardano, a special type of actor called a batcher or matchmaker is responsible for collecting user transactions and submitting them to the blockchain in a single, efficient bundle. This process keeps trading and DeFi operations running smoothly — but today, most batchers are still centralized.

That means a small group (or even one person) controls how transactions are processed. This setup can create several risks:

• If a batcher fails or acts unfairly, the whole system can break down.

• A centralized batcher could censor transactions or reorder them for profit (a problem known as MEV — Maximal Extractable Value).

• The community has no direct control or visibility over who operates batchers and how they behave.

To fix this, we introduce our efforts for matchmaker/batcher governance — a decentralized way to manage who can operate as a batcher through community voting and on-chain licenses. Instead of a single operator holding power, a DAO (Decentralized Autonomous Organization) issues and revokes matchmaker licenses using transparent rules and token-based voting. Please note this is currently on preproduction network ONLY.

This approach aims to:

• Distribute power among the community instead of central entities.

• Increase transparency by making all governance actions visible on-chain.

• Promote fairness and accountability through regular license renewals and performance monitoring.

• Build trust in DeFi protocols by aligning incentives between users, developers, and batchers.

In short, matchmaker governance is about turning an essential but centralized system component into a community-driven, open, and auditable process — ensuring the long-term security, fairness, and sustainability of decentralized trading on Cardano.

Implementation on MuesliSwap

On MuesliSwap, matchmaker governance will be implemented through our new DAO setup. This setup connects governance, licensing, and monitoring into one transparent framework managed by the community.

To make this possible, several key components are required:

• DAO Governance Platform: A governance system that allows DAO members to propose, vote, and issue DAO-controlled licenses for matchmakers. These licenses define who is authorized to operate as a batcher within the protocol.

• DEX Smart Contracts: Smart contracts on the DEX must be able to verify and enforce DAO-issued licenses, ensuring that only approved matchmakers can process transactions.

• Monitoring Framework: A data and analytics layer that helps DAO members evaluate matchmaker performance, detect misbehavior, and make informed decisions about license renewal or revocation.

We divide matchmaker governance into two main components within the DAO interface:

1. Matchmaker Voting A smart contract–based voting system that enables DAO members to grant or revoke matchmaker licenses through on-chain voting. Each vote is transparent, and every license is represented by a NFT that always has a time-limit and the matchmaker is required to renew it.

2. Matchmaker Monitoring A visual interface that connects to our analytics backend, showing real-time data and historical metrics about matchmaker activity. DAO members can review transaction performance, profits, and reliability to decide whether a matchmaker should keep its license.

Together, these components form the foundation of a community-driven governance model for MuesliSwap. It ensures that matchmakers operate transparently, fairly, and in alignment with the DAO’s goals — building a more resilient and decentralized DeFi ecosystem on Cardano.