DeFi (decentralized finance) is going strong, creating more equality and accessibility to financial instruments for people anywhere on earth than ever before. DeFi protocols allow us to benefit from unprecedented access to trade. Mirror Protocol has been growing extensively since its launch in December 2020 and is one of them.
This article explores the basics of Mirror Protocol and its key characteristics.
What is Mirror Protocol?
Mirror is a protocol on the Terra Network – and one of Terra’s recent introductions – powered by smart contracts. It enables the creation of the so-called mAssets (Mirrored Assets).
In a nutshell, mAssets are synthetic assets that track the price behavior of real-world assets. Why is it important? mAssets give traders open access to price exposure – regardless of location and without having to purchase or transact real assets.
What’s more, mAssets are minted by users throughout the network when they need to open a position and deposit collateral. Mirror Protocol’s design ensures there is always sufficient collateral to cover mAssets.
The Mirror Token
The Mirror Token (MIR) is Mirror Protocol’s governance token. The total MIR distribution is planned at 370,575,000 tokens, released over the course of four years.
How can you use MIR within the protocol? Users must stake MIR to be able to vote on existing polls or deposit the tokens to be able to create new governance polls.
In addition, users staking the protocol’s native token earn MIR rewards. These rewards are generated from withdrawing collateral from collateralized debt positions (CDP) within Mirror.
Furthermore, Mirror allows users to receive MIR rewards by staking LP tokens. LP tokens are for Liquidity Providers who ensure liquidity for MIR and mAssets. Yield is paid to the users from MIRs that are newly minted through annual inflation, which gradually increases the total supply of MIR until the end of fourth year.
Surely, users can expect more use cases in the future.
The Mirror Wallet
As the name suggests, Mirror Protocol has its wallet.
The Mirror Wallet enables users to invest in synthetic stocks and ETFs. The most notable thing is that its users can access any financial markets, any time. That is correct, at any time of the day.
Connecting users with the protocol, the wallet application enables them to:
- Access market data and financial news in real time,
- Make instant deposits and withdrawals,
- Take advantage of the 24-hour open access to the market.
Mirror Protocol’s Key Characteristics
Here are some key takeaways about Mirror Protocol:
- Mirror enables the creation of mAssets that follow the price behavior of fiat assets and give traders worldwide open access to price exposure, without the burdens of owning or transacting the assets.
- Top trading assets on Mirror Protocol include mGOOGL, mTSLA, mNFLX, as well as Apple, Microsoft, and Alibaba assets.
- Mirror Protocol’s native token is Mirror Token (MIR).
- MIR is minted by the protocol itself and distributed as a reward to drive behavior that secures and benefits the entire ecosystem.
- The Mirror Wallet enables 24-hour trading of synthetic versions of stocks and NFTs.