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Remember when Robinhood restricted the number of shares of GME/AMC that each user can buy? This restriction on stock trading for retail investors is something that centralised platforms can do at any time. This is why I believe that we need a platform for synthetic assets in Defi where decentralisation allows anyone to trade assets freely.
Introducing Mirror Protocol on Terra! Mirror Protocol allows the creation of fungible assets or synthetics which tracks the price of the real-world assets. Currently, the assets on Mirror consists of stocks such as mAAPL and mTSLA, ETFs such as mQQQ and mARKK and even cryptocurrencies like mBTC and mETH.
Uses of Mirror
1. Trading of assets
The simplest way to use Mirror would be to trade the assets however you like through buying and selling using UST (Terra Stablecoins). You can even use Limit Order when buying or selling! Here, we can buy and sell mGOOGL using UST
2. Long Farm/ Short Farm
For the experts(Farming Degens), you can take up long and short farming positions using mirror protocol. The basic idea for Long Farm is simply to provide liquidity in the asset's liquidity pools (LP) and earn MIR tokens. Whereas for short farming, it is more complicated where you have to first mint the asset and it will be sold immediately. The user will receive sLP tokens which will also earn MIR tokens.
Basically, for long/short farming, I advise you to understand how it works before apeing in!
Since I am yet to become a pure degen, I am currently Long Farm on MIR-UST pools only :)
Here are some resources for you to learn (Ape) more on the different strategies available on Mirror Protocol:
Different Ways to Use Mirror
Advanced ways to use Mirror
3. Staking
Lastly, if you really believe in the importance of synthetic assets, you can consider staking your MIR tokens to participate in the voting of new assets addition. Also, to incentivise active participation of stakers in voting, Mirror will only return full staking rewards for users that vote on proposals.
Before the incentive (Mirror Version 1)
After the incentive (Mirror Version 2)
** Delta Neutral Strategy **
Congrats if you manage to read until here! Once you are familiar with Mirror protocol, you can actually try out this delta neutral strategy where users of Mirror found a way to earn $ without any risk! Here is the alpha you have been looking for :)
NFA!
Closing Thoughts
I have been using Mirror protocol for the past few months too but mainly focused on farming by participating in the liquidity pools and staking. I would say that the rewards do fluctuate depending on the APY but have yet to dive deep into the different mechanisms of Mirror.
In addition, there is insurance coverage available on Insurace for smart contract vulnerabilities so there is an extra safety option for the users.
To end off, I would say there Mirror has great potential, especially in the coming months where Terra Projects are going to utilise Mirror for asset management (Spar Protocol) and smart ETF balancing (Nebula Protocol). It is going to be incredible for the Terra ecosystem when all these projects launches!
Thank you for reading and hope that this was informative for you. Feel free to comment or rectify any errors that I might have made! Cheers :)
