Mooniswap Review: DEX Features, Fees & Liquidity Provider Returns (2025)
Mooniswap Earnings Estimator
Estimate Your Mooniswap Earnings
Compare potential earnings as a liquidity provider on Mooniswap versus Uniswap V2.
Estimated Earnings Comparison
| Metric | Uniswap V2 | Mooniswap |
|---|---|---|
| Protocol Fee (0.30%) | $0.00 | $0.00 |
| Slippage Capture | $0.00 | $0.00 |
| Total Estimated Earnings | $0.00 | $0.00 |
Mooniswap review - you want to know if this DEX lives up to the hype. Below you’ll get a plain‑spoken breakdown of how it works, how it stacks up against the big players, what fees and earnings look like, and a step‑by‑step guide to start swapping or providing liquidity.
TL;DR
- Mooniswap is a 1inch‑built AMM on Ethereum that uses “virtual balances” to capture slippage for liquidity providers.
- Liquidity providers can earn 50‑200% more than on Uniswap V2, according to 1inch simulations.
- Fees are flexible - up to 5% can be routed to wallets or dApps, and a future 0% fee is possible.
- To trade, you need an Ethereum‑compatible wallet (MetaMask is the most common) and enough ETH for gas.
- Risks include Ethereum gas spikes, thin liquidity on some pairs, and a 5‑minute price‑delay that can affect fast arbitrage.
What is Mooniswap?
When you first hear the name Mooniswap is a decentralized exchange (DEX) built on the Ethereum blockchain. It was launched by the team behind 1inch, a well‑known DEX aggregator, in August2020.
The core idea behind Mooniswap is its virtual balances technique. Instead of immediately updating pool reserves after each swap (the classic constant‑product model), Mooniswap keeps a hidden “virtual” reserve that only updates gradually over roughly five minutes. This delay lets the protocol keep most of the price‑slippage that would normally go to arbitrage bots, funneling that revenue back to the liquidity pool.
Because Mooniswap lives on Ethereum, every trade is an on‑chain transaction, subject to the network’s gas fees and congestion.
How does Mooniswap differ from other AMMs?
Traditional AMMs like Uniswap (especially V2) instantly recalculate the price curve after each trade. This instant update creates a lucrative opening for arbitrageurs who snap up the price difference, siphoning slippage away from liquidity providers.
Mooniswap’s virtual balances act as a buffer. By smoothing price changes over several minutes, the protocol reduces the profit margin for arbitrageurs and redirects that profit to the pool. The result, according to internal 1inch simulations using real‑world data, is a projected 50‑200% boost in earnings for liquidity providers compared to Uniswap V2.
| Feature | Mooniswap | Uniswap V2 |
|---|---|---|
| Price‑update method | Virtual balances with ~5min delay | Instant constant‑product update |
| Liquidity‑provider earnings (simulated) | +50‑200% vs. Uniswap V2 | Baseline |
| Fee flexibility | Up to 5% can be routed; future 0% possible | Fixed 0.30% protocol fee |
| Arbitrage impact | Reduced due to delayed price changes | High - arbitrage captures most slippage |
| Supported wallets | MetaMask, WalletConnect, Ledger, etc. | Same ecosystem |
Fee Structure and Liquidity‑Provider Returns
Mooniswap’s fee model is intentionally adaptable. The protocol can allocate up to 5% of each trade’s fee to external actors such as wallet apps or dApps that integrate the AMM. This means a dApp could, for example, reward users with its native token for swapping through Mooniswap.
The whitepaper notes that the team might lower the protocol fee to 0% in the future, making trades effectively fee‑free (aside from gas). Even with the current fee settings, the key metric for liquidity providers is the share of slippage they capture, not just the explicit fee.
Let’s put numbers on it. Suppose a pool on Mooniswap processes $1million in volume over a week, with an average slippage of 0.2%. Traditional AMMs would see most of that 0.2% absorbed by arbitrage bots. Mooniswap’s design redirects roughly 80‑90% of that slippage back to the pool, translating to an extra $1,600‑$1,800 in earnings for LPs on top of any protocol fee.
Getting Started: Using Mooniswap
- Set up an Ethereum‑compatible wallet. The most common choice is MetaMask. Install the browser extension, create a new wallet, and back up the seed phrase.
- Fund your wallet with ETH. You’ll need ETH to cover gas fees for every transaction - swaps, adding liquidity, and withdrawals.
- Visit the Mooniswap interface. Go to the official Mooniswap URL (always double‑check the domain to avoid phishing).
- Connect your wallet. Click the “Connect Wallet” button, select MetaMask (or another supported wallet), and approve the connection.
- Swap tokens. Choose the token you want to sell (e.g., USDC) and the token you want to receive (e.g., DAI). The interface shows the estimated amount, slippage tolerance, and gas cost. Confirm the transaction in your wallet.
- Add liquidity. Click the “Add Liquidity” tab, select a pair, and deposit equal values of each token. You’ll receive LP tokens representing your share of the pool.
- Harvest earnings. Over time, your LP tokens accrue a share of the pool’s fees and slippage capture. When you’re ready, remove liquidity to burn the LP tokens and claim the underlying assets plus earned fees.
Remember, because Mooniswap runs completely on‑chain, every step consumes gas. During periods of high network congestion, fees can spike dramatically, so it’s wise to monitor gas trackers before executing large swaps.
Risks and Considerations
- Gas volatility. Ethereum’s gas price can swing wildly. A trade that looks cheap in USD terms might become expensive if the network is congested.
- Liquidity depth. Mooniswap’s total value locked (TVL) is lower than that of Uniswap or SushiSwap for many pairs. Thin order books can cause higher price impact for large trades.
- Price‑delay effect. The five‑minute virtual‑balance window benefits liquidity providers but can leave traders with slightly worse rates compared to instant‑update AMMs.
- Smart‑contract risk. While Mooniswap’s code has been audited, any on‑chain protocol carries the risk of bugs or exploits. Use only funds you’re comfortable losing.
- Regulatory environment. DeFi platforms are largely unregulated. Stay aware of your jurisdiction’s stance on crypto trading and liquidity provision.
Future Outlook and Development
The Mooniswap team remains active within the broader 1inch ecosystem. Ongoing work includes tighter integration with the 1inch aggregator, which could route users through Mooniswap when it offers the best price, and experiments with dynamic fee models that react to market conditions.
One of the most talked‑about roadmap items is the potential shift to a 0% protocol fee. If realized, Mooniswap would become the most cost‑effective AMM for traders while still delivering higher yields to liquidity providers thanks to the slippage‑capture mechanism.
Adoption will hinge on two factors: the ability to attract deep liquidity for popular token pairs, and the willingness of traders to accept the slight price‑delay in exchange for lower fees. As Ethereum moves toward scalability solutions like zk‑rollups and the upcoming Paris upgrade, gas costs could drop, making Mooniswap’s on‑chain operations more attractive.
Frequently Asked Questions
Is Mooniswap safe to use?
Mooniswap is an open‑source protocol that has undergone multiple audits. Like any smart‑contract system, it carries inherent risk, so only use funds you can afford to lose and consider diversifying across multiple DEXs.
How do fees on Mooniswap compare to Uniswap?
Mooniswap’s protocol fee is flexible (up to 5%) and can be routed to third‑party wallets, whereas Uniswap V2 has a fixed 0.30% fee. The real advantage of Mooniswap is the additional earnings liquidity providers receive from captured slippage, often outweighing the raw fee difference.
Do I need to hold any specific token to trade on Mooniswap?
No. Mooniswap works with any ERC‑20 token. The only requirement is enough ETH in your wallet to pay for gas.
Can I earn rewards by providing liquidity?
Yes. LPs earn a share of the pool’s transaction fees plus the slippage that Mooniswap redirects back to the pool. Simulations suggest returns can be 50‑200% higher than on Uniswap V2 for comparable pairs.
What wallets are compatible with Mooniswap?
MetaMask, WalletConnect, Ledger, and any wallet that can sign Ethereum transactions. The interface will prompt you to connect the preferred wallet.
Shelley Arenson
Mooniswap looks promising, love the slippage capture! 😊
Joel Poncz
I think its kinda neat but the fee zero thing seems weird lol
Kris Roberts
The concept of virtual balances on Mooniswap introduces a novel way to think about liquidity provisioning.
By allowing providers to capture a high percentage of slippage, the protocol promises more efficient capital use.
Yet, the theoretical capture of 80‑90% must be examined against real‑world trade volumes.
In practice, market depth and price impact will temper those optimistic figures.
Moreover, the absence of a protocol fee shifts risk onto liquidity providers during volatile swings.
This trade‑off mirrors the classic tension between fee income and exposure to impermanent loss.
If one adopts a philosophical lens, the DEX becomes a microcosm of risk‑reward equilibrium.
The estimator tool, while visually clean, hides assumptions about slippage distribution.
Users should consider that slippage is not constant; it varies with order size and market conditions.
The comparison with Uniswap V2 serves as a useful baseline, yet it oversimplifies the dynamics.
For instance, Uniswap's constant product formula has predictable behavior, whereas Mooniswap's virtual balances add complexity.
From a developer standpoint, the additional accounting may increase gas costs marginally.
For a long‑term LP, the key metric remains the net APY after accounting for price volatility.
Historical data on similar platforms suggests that high slippage capture can be eroded by arbitrageurs.
Therefore, the promised earnings bump should be taken with cautious optimism.
Ultimately, whether Mooniswap outperforms depends on the specific trading pairs and the LP's risk tolerance.
lalit g
The virtual balance approach is interesting from a risk perspective.
Reid Priddy
Actually, the claimed 80‑90% slippage capture feels like marketing fluff.
Shamalama Dee
While the estimator provides a clear layout, readers should verify the underlying assumptions before deploying capital.
scott bell
Whoa this could change everything!
It's exciting to see new mechanisms emerge.
vincent gaytano
Sure, because we all love another DEX promising miracles.
Dyeshanae Navarro
Liquidity providers can benefit from this design if they stay patient.
roshan nair
The estimation tool is helpful, but requires correct input values to avoid miscalculation.
Jay K
I appreciate the thoroughness of the presented data.
Kimberly M
Nice overview 😊
Navneet kaur
Why is the table empty? This looks fake.
Marketta Hawkins
Our own projects should lead, not copy DEXs 😎
Drizzy Drake
I think the tool is a solid starting point for anyone curious about LP returns.
However, it's vital to factor in gas fees, which can eat into profits.
Also, keep an eye on token price volatility as it directly impacts your underlying assets.
In short, use the estimator as a guide, not a guarantee.
AJAY KUMAR
India must adopt this tech now!
bob newman
Of course the slippage capture is 0% because you forgot the math.
Anil Paudyal
Looks good but need more data.
Kimberly Gilliam
Wow another DEX, yawn.
Jeannie Conforti
Great job on the layout, but double check the numbers.
tim nelson
I think it's fine but also risky.
Rochelle Gamauf
The discourse surrounding decentralized exchange mechanisms necessitates a rigorous analytical framework.
Lexie Ludens
This article drags on, yet somehow intrigues me.