Project Insight: Mirror Protocol

Mirror Protocol

Mirror is a Decentralized Finance (DeFi) protocol that brings the ability to trade (US) equities 24/7 to everyone. The protocol achieves this by minting synthetics assets, called Mirrored Assets (mAssets). 

Mirror Protocol is powered by smart contracts and runs on the Terra network, mAssets are designed to mimic the price behavior of the real-world assets they represent. 

This enables traders worldwide to trade their favorite real-world assets (Stocks or ETF) on the blockchain, anytime and anywhere using the Mirror Protocol. This tool is extremely powerful, especially with the tendency of centralized exchanges like RobinHood that have halted trading.

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Terraform Labs

The South Korea-based Terraform Labs was founded by Do Kwon and Daniel Shin back in January of 2018. The company created its programmable stable coin $LUNA, backed by some large companies like Coinbase Ventures, Pantera Capital, Polychain Capital, Galaxy Digital, and Arrington XRP Capital, who provided the initial investment capital of $32 Million. Other prominent companies like Okex, Binance Labs, Huobi Capital, Dunamu & Partners, Kakao Ventures, and Kakao Investment also have backed Terra.

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Intended as a decentralized global payment system, the Terra Network settles transactions within 6 seconds, requiring a minimal transaction fee. The network has a market capitalization of over $14.5 Billion, according to CoinMarketCap. 

The platform is most popular in its home country South Korea where ​​there are over 2 million unique monthly users making payments worth well over $2 Billion each month.  Most transactions are generated by the South Korean e-commerce payment application CHAI and MemePay – a Mongolian-based platform. 

The native $LUNA token also bears yield because 100% of transaction fees are distributed back to $LUNA holders. If you would like to know more about Terra Money, you can read their white paper HERE.‍

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Mirror Protocol: mAssets

The fully decentralized and community-driven Mirror Protocol provides secure synthetic assets for its users. The founding Terraform company has no special admin functions in the contracts and has no pre-mine in the Mirror Protocol.

After bridging to the Ethereum Network, Mirror Protocol has also bridged to Binance Smart Chain (BSC), bringing tokenized synthetic assets to the BSC community. Mirror Protocol allows users to tokenize real-life assets, physical and abstract assets alike. Physical assets would include real estate, art, precious metals, commodities, and other illiquid assets. 

On top of this, users can mint abstract assets like stocks, derivatives, bonds, investment funds, etc. As you can see, almost anything can be tokenized, which brings a plethora of benefits:

• 24/7 permission-less trading anywhere in the world
• No need for intermediaries; all transactions will be on the permission less blockchain ledger.
• The tokenization allows users to trade fractions of an asset.
• For some assets, the tokenization will allow for better liquidity.
• The use of smart contracts on the blockchain will significantly cut legal and operational costs.
• Through the tokenization, assets will be more accessible; the fractional ownership will allow less liquid users to participate.

Synthetic assets minted on the Mirror Protocol, so-called mAssets or mirrored assets, can be created by anyone. Here are the main mechanics of mAssets:

• Users must lock up 150% of UST's current asset value or 200% if using other mAssets as collateral.
• If positions go under the minimum collateral ratio, they will be liquidated; this measure regulates and secures the minting process.

• For redeeming an mAsset, users must burn the same amount of mAssets issued when opening the CDP to get back the provided collateral.
• Assets are listed and can be traded on various automated market maker (AMM) decentralized exchanges (DEX) like PancakeSwap (BSC), TerraSwap (Terra), and Uniswap (Ethereum). Some of the trading fees flow back as an incentive for liquidity providers.
• A price Oracle that updates every 30 seconds ensures that the mAsset is pegged to the real asset, drifting prizes of mAssets incentivizing traders to arbitrage.
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mAssets can simply be held or used for multiple purposes, such as: providing collateral in lending protocols, creating LPs for various decentralized exchanges, creating synthetic stable pools, and many other possibilities. 

For a much more in-depth explanation about the mAssets click HERE. 

The team has also received an audit from Cyber-security firm, Cyber Unit, and the successful results of the audit can be found HERE. Overall this audit concluded that Mirror protocols smart contracts are secure.

Mirror also has a bug bounty program with Immunefi worth $100,000 for critical bugs. All protocols with a bug bounty show a proactive step toward protection. 

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Mirror on The BSC

Mirror Protocol launched on the Binance Smart Chain in January 2021 by kicking off a partnership with the BSC giant, PancakeSwap (PCS). This is a win-win as PCS is the first mover to innovate five tokenized stocks to their AMM, allowing users to provide liquidity and earn yield. 

Current deployed BSC Terra/Mirror contracts that are tradeable on PancakeSwap currently only include: mAMZN, mGOOGL, mNFLX, mCOIN, and mTSLA. 

With more coming, this is the list with corresponding contract addresses so far:

• LUNA 0xECCF35F941Ab67FfcAA9A1265C2fF88865caA005
• UST 0x23396cF899Ca06c4472205fC903bDB4de249D6fC
• KRT 0xfFBDB9BDCae97a962535479BB96cC2778D65F4dd
• SDT 0x7d5f9F8CF59986743f34BC137Fc197E2e22b7B05
• MNT 0x41D74991509318517226755E508695c4D1CE43a6
• MIR 0x5B6DcF557E2aBE2323c48445E8CC948910d8c2c9
• mAAPL 0x900AEb8c40b26A8f8DfAF283F884b03EE7Abb3Ec
• mGOOGL 0x62D71B23bF15218C7d2D7E48DBbD9e9c650B173f
• mTSLA 0xF215A127A196e3988C09d052e16BcFD365Cd7AA3
• mNFLX 0xa04F060077D90Fe2647B61e4dA4aD1F97d6649dc
• mQQQ 0x1Cb4183Ac708e07511Ac57a2E45A835F048D7C56
• mTWTR 0x7426Ab52A0e057691E2544fae9C8222e958b2cfB
• mMSFT 0x0ab06caa3Ca5d6299925EfaA752A2D2154ECE929
• mAMZN 0x3947B992DC0147D2D89dF0392213781b04B25075
• mBABA 0xcA2f75930912B85d8B2914Ad06166483c0992945
• mIAU 0x1658AeD6C7dbaB2Ddbd8f5D898b0e9eAb0305813
• mSLV 0x211e763d0b9311c08EC92D72DdC20AB024b6572A
• mUSO 0x9cDDF33466cE007676C827C76E799F5109f1843C
• mVIXY 0x92E744307694Ece235cd02E82680ec37c657D23E
• mFB 0x5501F4713020cf299C3C5929da549Aab3592E451
• mCOIN 0x49022089e78a8D46Ec87A3AF86a1Db6c189aFA6f

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$MIR Token 

The $MIR token is the Mirror Protocol's governance token and is also used to reward liquidity providers. These rewards are generated by the fees users have to pay for closing their position on mAssets, creating a "poll" and trading fees, the collected fees will be used for buying $MIR that will be distributed amongst the liquidity providers.

The maximum supply for $MIR will be 370.575.000 Tokens all to be released over a four-year period. At the current point in time, there are 77,742,679 tokens in circulation; it has a market cap of around $338 Million, and it is ranked #273 on CoinGecko and #331 on CoinMarketCap.

$MIR can be earned in several ways:

• By staking $LUNA, this requires the use of the Station Wallet desktop app, which can be found HERE
• By providing liquidity to MIR/UST pair. (UniSwap, TerraSwap, PancakeSwap)
• By providing liquidity to any mAsset/UST pool pairs (non-BNB)
• By staking $MIR tokens to generate more MIR rewards when withdrawing collateral from CDP positions within the protocol
• Yield of MIR is also paid out to MIR token holders that is newly minted each year by inflation

• Community Pool: The remaining supply will be distributed to the Community Pool after four years

The $MIR token can be traded at several prominent exchanges: Binance, Mandala Exchange, Huobi Global, OKEx, and HitBTC. 

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Governance

The $MIR Token serves as the Mirror Protocol's governance token. Users that have a stake position in $MIR can participate in the protocols governance system. The amount of voting power is weighted by the amount of $MIR tokens staked, the more $MIR tokens that you stake, the more power it will give you. Any users can create a new "poll" or governance proposal, but to do so, requires an initial deposit of $MIR tokens. This deposit will be given to $MIR stakers if the request fails.

When a Poll has met all parameters (quorum and threshold) and has been voted "yes" by the community, the "Mirror Governance Contract" will execute the parameters that were set in the poll. The governance contract can invoke any function defined in the other Mirror smart contracts; this does not require updates to the core protocol and will be automatically implemented after a set time.

As stated before, Mirror Protocol is an autonomous and community-governed project. Terra does not have any special admin functions and does not hold a pre-mine.

Since the early version of Mirror did not incentivize users to actively participate v2. sought to change that. V2 has implemented a new voting incentivization program that rewards active participation in on-going polls. This strategy will seek to boost quorum in polls and give users more reasons to participate in governance.

The entire front end of the user interface (UI) for Mirror Protocol is completely decentralized. The UI is fully open-sourced on GitHub as well. 

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Conclusion

The ability to buy tokenized stocks or any other real-world asset is just incredible. This ability allows people to enter markets that they else would or could not. It also means that trading those assets can be done 24/7 and from anywhere in the world—no more official trading hours. This is the power of decentralization! On top of this, the incentives given to their liquidity providers and stakers on their platform are decent and paid in  $MIR. The $MIR token can be obtained easily through various DEXs and CEXs.

With TerraForm Labs at the basis of this project, healthy fundamentals have been laid out; this strong team juristically increases the odds of an explosive future. As the bull market moves onward, users will not only have access to mAssets on the BSC, Ethereum and Terra as the team plans to continue cross-chain expansion. Overall, Mirror offers an innovative service, allowing users to take advantage of assets in a trustless and permissionless manner creating a strong foundation for growth and an influx of new users.

For more information, or if you wish to stay up to date on the project, check out project and media pages: Website | Twitter | Medium | Telegram