Mirror Protocol(MIR) is Terra Network's Synthetic Asset Creation Protocol, which enables users to issue mAssets that resembles the real-world assets such as Stocks. This protocol allows users to mint synthetics by depositing collateral and trade them on automated market makers. Also, this protocol is basically governed by holders of its native Mirror token (MIR).

How does Mirror Protocol works?

Though Mirror Protocol is built on the Terra network, its Mirror assets (mAssets) will be available on Ethereum and Binance Smart Chain(BSC).

Trading Mirror Assets:

Let us see how these mirror Assets (mAssets) are implemented and minted in decentralized platform.

If an user wishes to redeem the collateral deposited on MIR, he should burn the mAssets issued or can trade mAssets interacting with Liquidity Pools(LP) such as Uniswap or Terraswap.

The below animated series will list out the top 20 Mirror assets traded over the last one Quarter

The below graph helps us explore the Total Value Locked (TVL) metric for Mirror Assets traded over the past one month, tracked on daily basis.

Here is the graph which shows the Total amount(USD) of Mirror assets traded over the past 3 months i.e. in last quarter.

The minting of mAssets is undertaken by users throughout the Terra network by opening a position and depositing collateral. Mirror will ensure whether there is sufficient collateral within the protocol to cover mAssets and also manages markets for mAssets by listing them on Terraswap (UST).

Users needs to first deposit collateral to the protocol with amount more than 150% of the current asset value to create or mint an mAsset.

This protocol accepts UST, LUNA, MIR, ANC, aUST and all mAssets tokens as Collateral to deposit. If in case, the real-worls asset's value exceeds the value of Collateral deposited, the collateral will be liquidated to be solvent.

Mirror Protocol Fee:

1.5% Mirror protocol fee is charged whenever a withdrawal from a CDP is made (including position closure and liquidation auction). The protocol fee is calculated based on the value of the mAsset at the burning of minted asset. This fee is then sent to the Collector contract, converted into MIR through Terraswap and distributed to MIR token stakers as a staking reward.

Governance Proposals:

Governance is the democratized process through which proposals for change in Mirror Protocol are introduced and accepted by the community through voting.

The Mirror Token (MIR) serves as Mirror Protocol's governance token. Only users with a staked MIR position can vote on polls, and each user receives voting power weighted by their amount of staked MIR. For every poll, a user can choose to allocate up to their total staked MIR.

Mirror relies on Terraswap to establish UST trading pairs for mAssets and for the MIR token, which enables a decentralized on-chain exchange for the various assets involved in Mirror Protocol.