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Cardano
$1.39 -3.16%
ADA · 7w

MueѕliSwap presents: The protocol powering Cardano’s first DEX

On November 26, 2021, MuesliSwap successfully launched a decentralized exchange (DEX) on Cardano mainnet, making it the first among many competitors to leap into a new era of DeFi on Cardano. As team MuesliSwap, we have been thrilled to see the very first decentralized token swaps happening on Cardano, and we are more than grateful for the warm welcome into the Cardano community. Great interest has been shown in how MuesliSwap operates from a technical perspective, and therefore in this article, we would like to take a step back and shed some light on the inner workings of the MuesliSwap DEX.

Note that a few weeks back, we published our whitepaper which contains an in-depth treatment of how to conceptually build a DEX on an EUTXO-based blockchain such as Cardano, including discussions on how to best leverage concurrency, avoid contention, ensure fairness, and alike. These considerations are all necessary and important when developing a DEX. In this article though, we want to break down all the concepts relevant for interested users. Because as team MuesliSwap, we believe in true decentralization. Openly discussing our technical solutions and having a user base that understands the platform they are trading on well is a crucial part to decentralization, and the best source of trust for everyone.

First of all, the exchange model at the basis of MuesliSwap is fundamentally different from DEXs on other chains like Uniswap on Ethereum, and in fact replicates the traditional order book exchange in a new, decentralized way. For a detailed discussion on why we believe this is a good choice, check our whitepaper. We now describe the trading workflow from a user’s perspective.

Let’s say Charles wants to buy some of his favorite tokens, namely 10 MILK, and is willing to give at most 5 ADA in return. This corresponds to him setting a limit price of 0.5 ADA per MILK. He then places an order at ada.muesliswap.com/swap which is then being entered into the ...

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