Making the trade market easier and accessible to the market interest, Mirror Protocol gives crypto traders access to traditional financial assets. The smart contracts issued by Mirror Protocol (MIR) help create ‘synthetic’ assets/shares of the companies.
The centralized intermediary institutions make it difficult for any layperson to enter the market. Additionally, the accessibility is very less. To solve these issues, the smart contracts by MIR can be traded over its decentralized network. The synthetic mirrored assets, tokens on a blockchain, can also be subdivided into smaller parts. These are called as mAssets. It is more affordable for people. This method of fractional ownership. Mirror Protocol aims to replace the centralized intermediary institutions.
Mirror Protocol was launched by a South Korean company called Terraform Labs which is known for creating the Terra network. Founder Do Kwon made a mirror protocol to decentralize token and financial assets. The protocol was designed in 2020. Mirror is just one small part of the Terra galaxy. They call themselves Terranauts and plan to expand further.
Its co-founder Daniel Shin and Do Kwon wished to promote cryptocurrency and blockchain technology adoption by focusing on its usability and price stability. MIR holders have complete freedom to conduct governance of the protocol. This gives the MIR token holders an upper hand over other users.
The Team behind Mirror Protocol
Do Kwon and Daniel Shin designed the project Mirror Protocol to encourage cryptocurrency and blockchain technology use by emphasizing usability and price stability. Kwon was named CEO of Terraform Labs, the company that created Terra and Mirror Protocol.
Do Kwon frequently expresses his dedication to the global goals of cryptocurrency. Kwon founded his first company, Anyfi, in 2016. It received a one-million-dollar grant from South Korean government officials and angel investors.
Features of Mirror Protocol
The main features of the Mirror Protocol are very innovative and unique. The key aspect is the mirroring of regular stocks and the incentives for users to adopt various strategies.
Mirror Protocol’s wallet, the Mirror Wallet, is managed by ATQ Capital. It is used to purchase crypto and ETFs with cryptocurrency. Users have complete access to the financial markets. Mirror Wallet is a simple wallet that connects to the protocol and offers a variety of synthetic investment options.
The Mirror Protocol uses three types of tokens: MIR tokens, LP tokens, and mAsset tokens. Liquidity providers use LP tokens to add liquidity to pools. MIR encourages users to stake LP tokens for governance purposes.
The Mirror Protocol also includes four major components:
- It enables users to trade MIR and mint stock. The estimated pool and oracle prices of the asset are provided.
- Borrow- Fees are also included in the transactions. Users must repay their loan according to the agreed-upon terms before purchase.
- Govern: MIR tokens are used to vote on various proposals. This ensures the network’s decentralization.
- Farm: The Farm tab displays a list of available staking pools to users. Users can earn MIR by holding both long and short positions.
The MIR token serves two primary functions in the Mirror ecosystem: reward distribution and governance. Staking MIR also grants holders the right to guide protocol governance by voting on proposals, which is compensated in MIR tokens. This system was designed to promote behavior that protects the Mirror ecosystem.
Unlike many DeFi projects, no tokens are assigned to the Mirror Protocol’s developers, who strongly emphasize decentralization. The value of MIR is derived from its parent protocol Terra, which allows the token to be used in various ways.
Mirror was launched with 54.9 million MIR in circulation, and the supply is expected to grow to 375,575,000 tokens over the next four years. The final toke distribution will approximately be designated to 60 percent of the staking rewards.
The usage of mirror protocol is a relatively, very straightforward procedure. The users of Mirror Protocol have the option to either mint or trade synthetic assets. To start with the functioning of the Mirror Protocol, the users must first access the website and connect it to the Terra blockchain. As there are a wide variety of features of the Mirror Protocol, the users have the option even to farm, borrow or take part in the governance process. One can create an account in CoinDCX, verify the account and Buy MIR to begin the crypto journey in Mirror Protocol.
Mirror Protocol functions in four ways: minting, trading, liquidity provision, and staking.
- Minting: Before being used elsewhere on Mirror’s platform, synthetic mAssets must be minted. For minting, a collateralized debt position (CDP) with a minimum collateral ratio is required.
- Trading: Once minted, a mAsset can be bought or sold against UST. Mirror claims their protocol has lower network transaction fees than many of the industry’s leading decentralized trading platforms.
- Staking: Users can earn MIR tokens in one of two ways. MIR can be staked in the governance smart contract to allow voting as well as earning rewards.
- Mirror users with mAssets can deposit them—along with Terra’s stablecoin UST—into Terraswap’s liquidity pools.
The MIR Token
The project seeks to enable 24/7 stock trading by minting “synthetic” copies of the real thing. Mirror Protocol (MIR) is an Ethereum token that governs the Mirror Protocol. It allows us to generate fungible assets that track the price of real-world assets.
MIR tokens can be used to vote and propose significant protocol modifications. In other words, by mirroring the exchange values on-chain, mirrored assets are tokens that operate like a mirrored counterpart of actual assets. They provide fractional ownership, open access, and censorship resistance, just like any other cryptocurrency, while providing traders with price exposure to real assets.
Mirror Protocol is addressing inequalities in financial opportunities. It gives residents of less developed nations access to financial resources that are often only available to a small number of traders. This provides its users with a wide range of opportunities and allows the project to grow along with the new market.
A group of reputable developers created it in an environment primed for rapid expansion. Up to this point, Terra has demonstrated a great capacity to handle a wide range of DeFi dApps and protocols with many use cases.
However, MIR also comes with certain limitations. The investors can create a replica of their assets, but they do not own the assets. They do not have the right to brain votes, access to dividends, or shareholders’ rights. It isn’t good for long-term investments.
Global accessibility without entrance limits, the representation of fractional orders as numbers on the blockchain, and the elimination of the intermediate bundling process are all benefits of mAssets. Furthermore, as mirrors rely on the liquidity provided by each unique asset pool, orders can be fulfilled as quickly as the network’s block time (around 6 seconds). Thus, even if they don’t own the underlying asset, Mirror enables investors to directly participate in investments or price speculation. A governance resource of the Mirror Protocol is MIR currency. Owners may suggest and decide on operational changes. The total supply of MIR tokens is 370575000.
The MIR holders that control the Mirror Protocol are totally decentralized. The distribution of MIR tokens among network users is equitable and is based on each participant’s place in the protocol; the tokens are not pre-mined. The project’s major goal is to make it simple to enter the financial markets and to provide liquidity to promote the production of synthetic assets.
The LUNA price, which is now present on the new Terra 2.0 chain, is decided by pricing oracles, which the Mirror Protocol uses. After Terra’s fork, some validators did not upgrade their software, so LUNA was priced at $10 instead of LUNC at $0.0001. As a result, exploiters could borrow mAssets with very little security.