4 min read
Captain’s Pick — MuesliSwap
For this captain's pick, I've done a deep dive on MuesliSwap, the first Dex to have launched on Cardano is now the first to launch new functionality post the Vasil hard fork.
Without a history, what good is a monthly pick?
There was a competition to be the first Dex to debut on Cardano following the Alonzo upgrade around this time last year. MuesliSwap won the competition. Since then, a lot of Dexs have been released, and MuesliSwap has fallen to fourth place in the list of Cardano Dexs according to TVL. Although there is a significant distance between first and fourth, as shown in the table below, recent MuesliSwap post-Vasil events have me optimistic about their possibilities of narrowing that gap.
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With the launch of V2 Plutus, MuesliSwap's most notable improvement is the addition of an aggregator that enables users to use their service to find the best price for a transaction across all other Cardano Dexs. This is combined with their order book approach (the only functionality they've had historically) and the launch of their own liquidity pools that will eventually have triple-yield farming.
Users that provide their tokens for liquidity will have the chance to be compensated in the Cardano Dex's own token, the project's token, and ADA that is generated via staking the unused ADA existing in the pool to a stake pool and receiving incentives.
Because Cardano's unlock period from staking is instant, unlike other blockchains, it is possible to store ADA intended for liquidity in a stake pool until it is required. Note that not all projects offer triple yield in the manner outlined above. Triple yield farming is only available in a few pools when there is a cooperation between the project and the Dex since the project will provide the rewards in its token as an additional incentive to ensure liquidity.
In October, MuesliSwap will launch with double-yield farming using the project's token, $MILK, and double-yield farming using ADA. Which projects will offer a twofold income on their pools has already been confirmed.
I think MuesliSwap's first-mover advantage and new functionality following Vasil will draw a lot of interest. The simplest way to create genuine value for users is to simply allow them to visit one location and trade at the lowest costs and best pricing across all DEXes.
As you can see in the tweet below, they have used the upgrade to cut costs in addition to enabling Vasil functionality to add features. This alone should entice customers to the platform.
Along with the above mentioned advantages, MuesliSwap has integrated with the Milkomeda bridge. An EVM called Milkomeda is building a link between Cardano and Ethereum. Interoperability, in my opinion, is the key to blockchain's future. Users need to be able to smoothly communicate between their different dApps independent of the underlying tech if blockchain is to be widely adopted. A platform that has an advantage in this technology should therefore be valuable again.
The Milk Token
A few months ago, MuesliSwap released the $MILK token in anticipation of this new launch and to provide liquidity to their community as a thank-you for their support.
There is a fixed quantity of 10 million $MILK utility tokens, of which 5.3 million are currently in use. Only 1.12 million of this supply will be used for the yield farming campaign, which should lessen the likelihood that the token will experience inflation. That was the case for a large number of the other Dex tokens that were given out as incentives for providing liquidity.
Below is an overview of the value of the $MILK token
- Trading: access to exclusive exchange features and lower transaction fees
- Voting: Vote on community governance proposals
- Staking: Participate in the MILK pools and collect new Cardano tokens
- Early Access
The Hungry Cows NFT
The Hungry Cows NFT was launched a few months back the collection has 10,000 unique utility NFTs. The NFTS boost your yield farming rewards by locking a Hungry Cow when yield farming on MuesliSwap. Each Hungry Cow NFT has a boosting factor between 10% and 90% (based on its rarity level). The release was a good indicator of the loyalty of the MuesliSwap community. The collection sold out in minutes and there was such an appetite from the community that the collection had to be extended.
While MuesliSwap is far behind in the Dex race, I think they are a project worth keeping an eye on. Their new functionality coupled with the Milkomeda bridge and smart tokenomics does mean there is potential upside for the $MILK token. Over the past 3 months, the token has seen positive price action and that is with no shortage of economic headwinds, so it is definitely one to keep an eye on.
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