In this article, we would like to introduce Mirror Protocol known as a DeFi Protocol for synthetic assets. We’ll be covering the following topics:
- What is Mirror Protocol? How does Mirror work?
- MIR Tokenomics and How/Where to earn and store MIR tokens?
- Roadmap & Updates.
- Team members, Investors, and Strategic Partners.
Let’s explore the potential of Mirror!
What is Mirror Protocol?
Mirror Protocol is a DeFi protocol built on Terra’s blockchain for issuing and trading synthetic assets, called Mirrored Assets (mAssets). Mirror users are afforded the opportunity to participate in previously inaccessible markets, whether their former preclusion was dependent on government-dictated restrictions or a lack of capital to participate.
Some synthetic assets (mAssets) available to trade in Mirror protocol are mTWTR, mTSLA, mFB, mETH, mFB mIAU, mABNB, mGOOGL, mBABA, mAAPL, etc.
How does Mirror Protocol work?
Mirror launched Mirror v2 in July 2021 with multiple outstanding updates as follows.
Governance participation incentives: In Mirror v2, in addition to the existing governance staking benefits, active voters will be eligible for extra voting prizes to increase the motivation for staking activities.
New Collaterals: A highly requested feature of the community was to add MIR to the list of accepted collaterals for mint positions. Therefore, MIR, LUNA, ANC, and aUST are those new collaterals for this update.
Short Incentives: One of the largest issues in Mirror Protocol v1 was the persisting price premium between the Mirror and Oracle price. To close this price gap, Mirror needs to have arbitrage transactions right on its own platform.
Mirror v2 presents a new non-tradable token called sLP tokens, which is minted from creating a short position. sLP tokens are also stackable and generate a reward that is dynamically increasing or decreasing based on the current price premium between Terraswap and Oracle prices.
Pre-IPO Assets: Assets scheduled to undergo an IPO can be whitelisted and traded on Mirror v2. Any user can specify the details of the underlying asset via governance poll creation.
Besides that, some of the primary sections interact in the Mirror ecosystem:
Trade: mAssets are traded through interacting with liquidity pools on Terraswap. Traders buy and sell mAssets on Mirror using Terra’s UST stablecoin as the trading pair pegged on DEXs like Terraswap.
Arbitrage trading: This serves the purpose of closing the price gap between Mirror and Oracle. For example, if the price of TSLA on the NASDAQ was $1000, but the price of mTSLA on Mirror was $900, an arbitrageur would buy the asset on the expectation that the mTSLA price would eventually converge to the $1000 NASDAQ price with enough purchasing pressure in the near future.
At that point, the arbitrageur would sell mTSLA for $1000, netting a $100 profit per share. Similarly, if the NASDAQ price of TSLA was $1000, but the Mirror price of mTSLA was $1100, an arbitrageur would provide collateral, mint the mTSLA asset, and sell it at $1100, assuming that the mTSLA price would eventually converge to the NASDAQ price of $1000 with enough selling pressure in the near future.
Borrow or Mint: Minting is the process of providing collateral to issue a synthetic mAsset. You can choose the collateral you want to offer using the “Set a Collateral Ratio” option. Below 150% is highly risky and the safe side is above 200%. The more you drag the slider to the right, the less you can borrow against your selected collateral, but the safer your borrowing will be.
Farm: Stakers on Mirror take two forms. First, LPs can stake their LP tokens, which accrue staking rewards in the native MIR token from its emission schedule. Second, a 1.5% Mirror protocol fee is charged whenever a withdrawal from a CDP is made and distributed to MIR token stakers as a staking reward.
What is the MIR token?
The MIR token is the native token of the Mirror Protocol and it is used for governance, for staking, and for liquidity providers as rewards.
Detailed information about MIR Token
MIR Key Metrics
- Token Name: MIR Token.
- Ticker: MIR.
- Blockchain: Ethereum.
- Token Standard: ERC-20.
- Etherum Contract: 0x09a3ecafa817268f77be1283176b946c4ff2e608.
- Binance Smart Chain Contract: 0x5b6dcf557e2abe2323c48445e8cc948910d8c2c9.
- Token Type: Governance.
- Total Supply: 370,575,000 MIR.
- Circulating Supply: Updating…
MIR Token Allocation
- mAsset LP Staking Reward: 45%.
- Community Pool: 35%.
- MIR LP Staking Reward: 11%.
- Luna LP Staking Reward: 5%.
- Airdrop: 5%.
MIR Token Release Schedule
There are planned to be a total of 370,575,000 MIR tokens to be distributed over 4 years.
MIR Token Sales
MIR Token Use Cases
Governance: Active stakeholders and liquidity providers are actively engaged in the process of discussing and voting for protocol upgrades.
Liquidity incentives: MIR is distributed as a reward to users who provide mAsset liquidity to AMM. There is a fixed fee called the LP commission of 0.30% which serves as a reward for liquidity providers for Mirror-related pools on Terraswap.
Minting: In the Mirror Protocol V2, MIR tokens appeared as one of the new collateral options for minting mAssets. Several other new features were added in this version, such as the support of pre-IPO Assets, “Mint/Short” LP Token, and some governance issue fixes. Therefore, the demand for using MIR will grow as the number of users using the platform increases.
How to get MIR Token
You can buy MIR Tokens on Uniswap, Coinbase or Gate.io.
How to store MIR Token
You can store MIR on Coin98 Wallet with these steps:
Step 1: Open Coin98 Wallet & click Search Icon on the home screen.
Step 2: Search MIR Token.
Step 3: Click on the correct result at Receive Tab, copy the wallet address and send MIR to this address.
Mirror update Mirror V2 in July 2021. The team will be improving and simplifying the existing process of adding new assets onto the protocol through the governance and proposals of the Protocol’s users.
Team, Investors, and Partners
Terraform Labs: Terraform Labs has developed the Terra Blockchain that powers the startup’s cryptocurrencies and financial apps.
Do Kwon (Co-Founder & CEO): Do Kwon is the Co-Founder and CEO of Terraform Labs (TFL), the company that launched the Terra Proof-of-Stake (PoS) public blockchain built on the Cosmos SDK.
A Forbes 30-Under-30 profile in 2019, Do previously founded Anyfi, a peer-to-peer communications solution using mesh network technology, where he was the CEO before launching TFL with Co-Founder Daniel Shin. He received his Bachelor’s Degree in Computer Science from Stanford University.
Terraform Labs, the South Korean company behind the Terra public blockchain, has raised $150m from major crypto investors including Arrington XRP Capital, Pantera Capital, Galaxy Digital, and BlockTower Capital.
The $150m commitment is to Terra’s Ecosystem Fund, which Terraform Labs uses to sponsor projects built on the Terra blockchain. Projects like Mirror protocol, Anchor protocol, Pylon protocol, among others, utilize the Terra blockchain.
Band Protocol is providing real-time prices for an array of initial Mirrored Assets based on popularity, provision of long and short positions, and broad coverage.
Is Mirror (MIR) a good investment?
I have some insights about the chance to invest in Mirror, which I believe will be helpful to you.
The traditional US stock market has a market capitalization many times larger than the cryptocurrency market. Mirror’s mission is for retail investors around the globe to more easily participate in the US equities. As a result, Mirror has a lot of promise as a pioneer in providing this solution.
On the other hand, Mirror and Terreform are encountering legal issues since Mirror permits the trading of synthetic assets of stocks listed on the New York Stock Exchange without first obtaining SEC (The U.S. Securities and Exchange Commission) approval (Read more information: here). Terraform Labs and its co-founder, Do Kwon, filed a lawsuit with the SEC on October 21st, 2021. As a result, we’ll need to keep a closer eye on this event before deciding whether or not to invest in Mirror.
During the last four months, Mirror’s TVL (Total Value Locked) has been ranging between $1.5 billion and $1.8 billion. Therefore, the need for investors to come to a Defi product to trade traditional stocks is still a big question when they have so many other cryptocurrencies options.
Synthetic (SNX): Synthetix is an Ethereum-based protocol for the issuance of synthetic assets
UMA Protocol (UMA): UMA, or Universal Market Access, is a protocol for the creation of synthetic assets based on Ethereum.
I just finished introducing the basic information about Mirror Protocol. Do you believe Mirror is a good place to invest right now? Please leave a comment below to discuss Mirror together.
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