Distributed caching improves the performance of a system that uses microservices by reducing the number of requests that need to be made to the microservices. 

By storing frequently accessed data in memory on multiple machines, the system can access this data more quickly without having to make a request to the microservice each time. 

This reduces the workload on the microservices, improving the overall performance of the system. 

https://medium.com/design-microservices-architecture-with-patterns/microservices-distributed-caching-76828817e41b