On Wednesday (October 5), Cardano-powered decentralized exchange (DEX) MuesliSwap announced that it had launched Plutus v2 contracts, as well as liquidity pools, to become “the first DEX on Cardano with both Orderbook and AMM trading.”

In a subsequent tweet, the MuesliSwap team noted that “yield farming with double and triple yield opportunities will launch in the coming weeks.”

MuesliSwap’s blog post started with a brief history of the popular DEX:

In November 2021, after the Alonzo hard fork bringing smart contract support to Cardano, we launched the first Cardano-native decentralized exchange based on a simple model, where eUTxOs correspond to orders in a decentralized orderbook, locked in a smart contract. Since then, a lot has changed in the ecosystem.

It then went on to say how Cardano’s Vasil upgrade, which took place on September 22, had helped MuesliSwaap:

Now, after the 2022 Vasil hard fork, we are launching the next development iteration, focused on leveraging new Vasil features for improved efficiency and user experience. Among other things, this iteration will bring liquidity pools that will interact directly with our existing orderbook, along with significant improvements in transaction size and cost. The coming improvements are enabled by the recent Vasil chain upgrade (hard fork)…

The Vasil hard fork focuses on scalability. There are many benefits of the upgrade, but crucially it allows the use of so called Reference Inputs. Previously, a transaction’s complexity had been limited by the number and size of Smart Contracts involved. With Reference Inputs, this limit has been lowered a lot, as size doesn’t matter anymore! We can now let multiple Smart Contracts interact in a single transaction, such as our unique decentralized order book and our liquidity pools.

It then went on to add:

The same eUTxO model that allowed us to launch MuesliSwap v1 in November now allows us to launch MuesliSwap v2, based on the unique Hybrid DEX model. Due to the unique functionalities of eUTxO, we are able to merge our decentralized orderbook with liquidity pools, giving users a unique trading experience. In particular, it is now possible to automatically fill limit orders using the entire liquidity locked in any liquidity pools across the blockchain. This makes markets on MuesliSwap more liquid and efficient!

Here is what is new in MuesliSwap V2:

  • ability to process multiple orders in a single transaction (the “10x decrease in transaction size for complex” enables “efficient trading even under high network load”);
  • support for an LP-enhanced orderbook (“The new protocol allows orders to be filled by any input — not only inputs from the same protocol”);
  • complete interoperability with legacy scripts (“the existing legacy orderbook and MILK liquidity pool remain compatible with the newly developed orderbook and pool contracts”); and
  • improved support for external market makers (“in the new protocol, liquidity used for satisfying orders does not have to come from the protocol itself”).