Author: dark tide DeepFollow
“We have an incentive to provide global retail investors with an easier way to participate in the US stock market.”
On December 3, 2020, Do Kwon, CEO of Terraform Labs, behind the South Korean stablecoin project Terra (Luna), said on Twitter.
U.S. stocks are a very attractive asset class in the world. Star stocks such as Apple and Tesla have emerged. However, for most people in the world, the opportunity to enter the US$36.3 trillion market is limited.
On December 4, Mirror Protocol was officially launched.
According to the official introduction, the Mirror Protocol solves this problem by casting synthetic assets (mAssets) and anchoring the price of U.S. stocks. The protocol can track the prices of stocks, futures, exchange-traded funds and other traditional financial assets, thereby combining cryptocurrencies with Connect with traditional markets.
Today, Apple, Tesla, Twitter, Microsoft and other stock tokens have been minted and can be traded on Uniswap and Terraswap.
Note that the US stock tokens minted and traded here do not represent the real ownership of the stock in reality, but only anchor the price of the asset, similar to the issuance of DAI, which means that there will be no dividends.
If you want to mint U.S. stock tokens, users can mortgage their Terra stablecoins (UST) and make over-collateralization at a ratio of 150%. If they are mortgaged with mAsset, the over-collateralization ratio needs to be greater than 200%, compared to 700% of Synthetix Over-collateralization ratio, Mirror’s asset efficiency is higher, which is mainly due to the relatively low volatility of traditional financial assets and a greater margin of safety.
In order to keep the token price consistent with the US stock price, mAssets will use an oracle (bandprotocol) to track and update the price every six seconds. This is mainly used to determine the CDP mortgage ratio, and will not directly affect the mAsset transaction price on Terraswap .
So the question is, how does the agreement work during non-US stock trading hours?
According to the rules, at this time, the oracle will be invalid, so mAsset cannot be cast, but it can still be traded on Terraswap.
The creation of mAsset will greatly reduce the threshold for ordinary people to participate in the US stock market. There is no need to hold entire shares, no review, and no restrictions on trading.
Currently, Mirror Protocol has passed the Cyberunit contract audit.
Governance token MIR and liquidity mining
In order to better start the Mirror Protocol, Terra issued the governance token MIR, and simultaneously opened liquidity mining on the Ethereum chain and Terra chain.
According to the white paper, the total issuance of MIR is 370,575,000, which will be distributed within four years. At the beginning of the world, Mirror Protocol will issue 54.9 million tokens. The distribution ratio is as follows:
- UNI airdrop: 16.66% (9.15 million) tokens will be airdropped to UNI holders (users who hold 100 UNI or more in their wallet before the snapshot on November 23 will receive 220 MIR).
- LUNA stakeholder airdrop: 16.66% (9.15 million) tokens will be airdropped to LUNA stakeholders.
- Community pool: 66.66% (36.6 million) tokens will be allocated to the community pool.
For the next four years, MIR will be allocated at a fixed ratio to investors and community members who conduct liquid mining on Terraswap or Uniswap. Mirror Protocol has repeatedly emphasized in the document that this is a community-led project.
During the four-year period, the inflation rate of MIR tokens will decrease year by year. Until the end of the fourth year, no new tokens will be issued . The final distribution ratio is as follows:
- Airdrop [4.9%]: allocated to UNI holders and LUNA stakeholders.
- LUNA pledge reward [4.9%]: The pledger allocated to LUNA in the first year of the launch agreement.
- mAsset LP mortgage [45.1%]: allocated to all mAsset mortgage pools within 4 years.
- MIR LP mortgage [10.4%]: allocated to the MIR-UST mortgage pool within 4 years.
- Community pool [34.6%]: allocated to the community reserve pool in 4 years.
In addition to participating in governance, MIR holders will receive fee income when users burn mAssets to recover the basic collateral.
Today, investors can exchange USDT for Terra stablecoins (UST), and then provide liquidity on Terraswap or Uniswap respectively, mortgage LP, and obtain MIR.
In general, since the price fluctuations of US stock assets are relatively small, the risk of providing liquidity for US stock tokens is also relatively small.
Mining on Uniswap
Mining at Terraswap
In the field of cryptocurrency, many organizations have tried to introduce U.S. stock assets into cryptocurrency before, but most of them are centralized exchanges with little success. Now DeFi has taken the banner, the outcome remains to be tested, but such an attempt is worthwhile encourage.
After all, out of Amber, outside is the sea of stars.
Related Links:
Official website: https://mirror.finance
Airdrop: https://eth.mirror.finance/airdrop
Liquid mining (Ethereum): https://eth.mirror.finance
Liquidity Mining (Terra): https://terra.mirror.finance/
