Melafix (a proprietary name) is an all-natural aquarium antibiotic consisting of an essential oil of the Melaleuca genus. Contrary to popular opinion it is not made from the common Tea tree, Melaleuca alternifolia, but from Melaleuca leucadendra, also known as the Cajeput Tree. This is confirmed by the manufacturer's Safety Data Sheet.
It is a wide-range antibiotic product, and thus is effective for a wide variety of mild gram positive bacterial infections, such as fin rot. However, it is generally ineffective against aquatic parasites and is typically used for treating the wounds caused by them in order to prevent secondary infection by other microorganisms.
Controversy & Dangers
Some consider there to be real dangers with the use of Melafix in fish aquariums. Being that Melafix is an oil based product, it is said that the oil can make it difficult for fish that breathe air. There are theories for why this happens, but what has been shown is if proper water parameters are maintained, there's generally not an issue.
Melafix needs to be used as directed. Many issues that come from the use of Melafix is the fact that it is being used incorrectly. The medication is a mild antibiotic. It can be used to treat mild infections, but used in other ways than intended, could result in the real problem not being treated correctly and Melafix appearing to be the cause of the issue. Knowing the infection and properly treating is a must.