Mooniswap Crypto Exchange Review: Better Earnings for Liquidity Providers?

Most crypto traders know Uniswap. But if you’re supplying liquidity to decentralized exchanges, you might be leaving money on the table. That’s where Mooniswap comes in - a lesser-known but smarter AMM built by the same team behind 1inch. Unlike Uniswap, Mooniswap doesn’t let arbitrageurs steal profits from your liquidity pool. It keeps them for you.

How Mooniswap Works Differently

Mooniswap is not just another DeFi exchange. It’s a fix for a problem most AMMs ignore: slippage leakage. When you trade on Uniswap, the price shifts slightly after your trade. Arbitrage bots jump in, snap up the better rate, and profit - while you, the liquidity provider, lose out. Mooniswap stops that.

Here’s how: instead of instantly updating prices after a trade, Mooniswap holds back the new rate for about five minutes. During that window, it creates "virtual balances" - fake numbers that make the pool look less profitable to bots. Arbitrageurs still trade, but they get worse prices. The profit that would’ve gone to them? It stays in the pool. That means more fees for you.

This idea didn’t come out of nowhere. Ethereum founder Vitalik Buterin once floated the concept in a forum thread. Mooniswap’s team, led by Anton Bukov and Sergej Kunz, turned it into a working protocol. And it works. Simulations by the 1inch team show liquidity providers earn 50% to 200% more than on Uniswap V2, depending on the token pair and trading volume.

Why Liquidity Providers Love It

If you’re staking ETH/DAI or WBTC/USDC on a DEX, your goal isn’t just to earn fees. It’s to earn more than you would elsewhere. Mooniswap delivers.

Take a real example: you add $10,000 worth of ETH and USDT to a liquidity pool. On Uniswap, you might earn $120 in fees over a month. On Mooniswap, thanks to captured slippage, you could earn $180 to $300. That’s not speculation - it’s based on backtested data using actual trading patterns from 2020-2023.

The platform also lets you earn from fee-sharing. Up to 5% of trading fees can be redirected to wallets or dApps that integrate with Mooniswap. If you’re a DeFi builder using Mooniswap in your app, you could get a cut. And the team has hinted that fees could drop to 0% in the future - meaning you’d earn even more from volume without paying anything extra.

What You Need to Use It

You can’t sign up for Mooniswap like you would for Binance. It’s fully decentralized. That means:

• You need an Ethereum wallet - MetaMask, Coinbase Wallet, or Rainbow work best.
• You need ETH to pay for gas fees. No ETH? No trades.
• You must understand smart contracts. Every swap is a transaction on-chain. If the network is congested, your trade might cost $20 in gas.

The interface is clean. Connect your wallet, pick a token pair, and swap. Adding liquidity is just as simple: deposit two tokens in equal value, confirm the transaction, and you get LP tokens in return. Those tokens represent your share of the pool. When you withdraw, they’re burned, and you get back your share of the accumulated fees.

There are no withdrawal fees. No account locks. No KYC. You own your keys. That’s the DeFi promise - and Mooniswap keeps it.

Downsides and Trade-offs

Mooniswap isn’t perfect. The five-minute delay that helps liquidity providers hurts traders who want instant prices. If you’re a day trader trying to scalp small moves, you might get worse fills than on Uniswap or Curve.

Also, liquidity is thinner. Mooniswap doesn’t have the volume of Uniswap or SushiSwap. That means higher slippage on large trades. If you’re swapping $50,000 of a low-liquidity token, you might get a bad rate - even with the virtual balance system.

And because it’s on Ethereum, you’re stuck with high gas fees during peak times. There’s no Layer 2 support yet. If you’re using tokens on Polygon or Arbitrum, you’ll need to bridge them first - adding complexity and cost.

Lastly, there’s no customer support. No email, no live chat. If something goes wrong - a failed transaction, a wallet issue - you’re on your own. That’s normal for DeFi, but it’s still a barrier for newcomers.

How It Compares to Uniswap and SushiSwap

Comparison: Mooniswap vs. Uniswap V2 vs. SushiSwap

Feature	Mooniswap	Uniswap V2	SushiSwap
Profit Model	Virtual balances capture slippage for LPs	Standard constant product formula	Same as Uniswap + SUSHI rewards
LP Earnings Potential	50%-200% higher than Uniswap V2	Baseline	Higher due to token rewards, but slippage still leaks
Trade Speed	5-min delay on price updates	Instant	Instant
Fee Structure	0.3% base, potentially 0% in future	0.3%	0.25% + SUSHI incentives
Integration	Part of 1inch aggregator	Standalone	Standalone
Network	Ethereum only	Ethereum only	Ethereum + multi-chain

If you’re a passive LP, Mooniswap wins. If you’re a frequent trader, Uniswap’s speed is better. SushiSwap offers token rewards, but those are volatile and often don’t offset slippage losses.

Who Should Use Mooniswap?

Mooniswap isn’t for everyone. But it’s perfect for:

• Liquidity providers who want to maximize returns without staking tokens or farming rewards.
• Traders who don’t mind slight delays for better long-term pool health.
• DeFi users already using 1inch - Mooniswap is built into their aggregator.
• Those tired of seeing arbitrage bots profit while their LP positions barely break even.

If you’re new to crypto, avoid it. You need to understand wallets, gas, and slippage. If you’re a DeFi veteran who’s watched their earnings shrink on Uniswap, Mooniswap is worth testing.

The Bigger Picture: Where Mooniswap Fits in DeFi

Mooniswap launched in August 2020 - right as DeFi exploded. Back then, everyone was chasing yield. Uniswap was king. But Mooniswap offered something new: a way to make liquidity provision profitable again.

Today, DeFi has changed. Layer 2s are here. New AMMs like Curve and Balancer offer specialized pools. But Mooniswap’s innovation still stands out. It’s not about flashy interfaces or tokenomics. It’s about fixing a broken economic model.

The 1inch team hasn’t abandoned it. Mooniswap is still actively maintained and integrated into their DEX aggregator. That means when you use 1inch to find the best swap rate, you might end up on Mooniswap - even if you didn’t choose it. That’s a sign of confidence.

Future updates could include Layer 2 support, lower fees, or even integration with other chains. But for now, its strength is simplicity: better economics, no gimmicks.

Final Thoughts

Mooniswap doesn’t try to be everything. It doesn’t have a token to trade. It doesn’t offer staking. It doesn’t have a mobile app. But it does one thing better than anyone else: it gives liquidity providers a fairer share of the profits.

If you’re supplying liquidity to a DEX and wondering why your returns are so low, Mooniswap might be your answer. It’s not magic. It’s math. And the math works.

Try it with a small amount first. Compare your earnings over a month. You might be surprised how much you were leaving on the table.