This was all the rage awhile back. Moly is a very slick material. My understanding of the theory is that it was supposed to reduce friction between bullet and barrel, increasing velocity at a given pressure while reducing barrel wear.

It seems truth has not lived up to theory. While moly still had believers, I've known people who swore it off due to ruined barrels (the "moly ring") and had this confirmed by a well-known gunsmith.

Moly is used in the hand-lapping process of custom barrels to help fill in and smooth the bore. Personally I think moly is good for making barrels but bad to put on bullets.