What is Mirror Protocol?
Mirror Protocol (MIR) is a decentralised finance (DeFi) platform designed to facilitate the creation of synthetic assets, known as Mirrored Assets (mAssets). These assets enable users to trade and invest in an environment that reflects the price behaviour of real-world assets without the need to physically own them.
Key Features of Mirror Protocol
Synthetic Assets (mAssets)
Mirrored Assets (mAssets) represent different real-world assets, providing users with the opportunity to gain exposure to these assets without actually possessing them. This technology offers a unique way to trade asset prices in a manner that is both efficient and cost-effective.
Minting Process
The minting of mAssets involves a collateralisation process where an issuer must lock up over 150% of the asset’s value in Terra stablecoins or existing mAssets. This collateral serves as a safety net to ensure the protocol’s stability. Should the market value of the mAsset surpass the collateralisation threshold, the collateral gets liquidated to maintain the system’s solvency.
Decentralised Price Oracle
The protocol utilises a decentralised price oracle to access real-time pricing information for underlying assets. Prices are updated every 30 seconds, ensuring that traders receive accurate data for their transactions. This mechanism also incentivises traders to engage with the assets, particularly when the price of an mAsset diverges from its corresponding market price.
Trading and Liquidity
Mirror Protocol allows participants to act in multiple roles: trader, minter, liquidity provider, and staker. This versatility enhances user engagement and promotes liquidity within the platform, making it an attractive option for those interested in DeFi.
Benefits of Using Mirror Protocol
Users of Mirror Protocol can experience several advantages:
Global Access to Asset Prices
With synthetic assets, traders can gain exposure to various asset prices across the globe without the complications of ownership or physical transactions. This feature broadens the horizons for traders looking to diversify their portfolios.
Enhanced Trading Opportunities
Traders benefit from the flexibility and potential profit opportunities presented by mAssets, particularly in volatile market conditions. The ability to trade synthetic assets adds a new layer of strategy to trading methodologies.
Official Resources
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