Mirror Protocol

Mirror Protocol is a synthetic assets protocol built by Terraform Labs. It allows users to issue and trade synthetics assets that track the price of real-world assets. This allows Mirror Protocol to track the price of stocks, futures, exchange-traded funds, and other traditional financial assets and bridges cryptocurrency markets with traditional markets. MIR is the governance token of Mirror Protocol and is used for governance, CDP closure fees, and liquidity mining.

This is intended to offer greater access to the US equities market through the minting of synthetic assets. These Mirrored Assets (mAssets) mirror the price behavior of the real-world assets and reflect the exchange prices on-chain. The decentralized representation grants traders price exposure to assets that would otherwise be inaccessible. These mAssets gather their price from decentralized oracles at thirty-second intervals.

Mirror Protocol works on the Terra blockchain and is available on Ethereum via the Shuttle-bridge. These platforms allow every asset to be represented on the blockchain. Mirror Protocol offers trading through a Mirror wallet application operated by ATQ Capital and offered for iOS, Android, and through Github. As well, Mirror offers a web application to trade, mint, and govern mirror protocol. And assets can be traded on Terraswap and Ethereum.

The native token for Mirror Protocol is the Mirror Token (MIR). This token is used for governance, staking, and rewards, and the token has a total supply of 370 million, which should drop over a period of four years. MIR is inflationary in nature and is expected to have new uses as the token matures.

Mirror Protocol allows for the creation of fungible assets, or synthetics, that track the price of real-world assets. To mint one of the mAssets, an issuer must lock up more than 150 percent of the current asset value in Terra stablecoins or mAssets as collateral. If the value of the asset rises above the collateralization threshold, the collateral is liquidated to guarantee solvency in the system.

While the mAssets use decentralized price oracles to target the asset price, if the price of the mAsset drifts significantly from the primary market, traders are incentivized to purchase, sell the asset to mint, or burn to claim the collateral.

To burn an mAsset, the issuer must burn the equal amount of mAssets issued when opening the CDP, and the collateral is then returned to the issuer.

The Mirror Protocol project was conceived in early 2020 by Do Kwon and Daniel Shin and the larger Terraform Labs team with the intention to add to the decentralization trend in the crypto markets. The impulse to decentralization led the team to ensure from the beginning there was no initial allocation of native tokens to team members or other special parties, and a partnership with Band Protocol to provide price feeds for the real world assets. As well, the Mirror Protocol team worked with CyberUnit to audit the company's smart contracts. And Terraform Labs maintains open bug bounties for any potential weaknesses in the protocol.

Originally intended to be launched on the Terra blockchain, the Terraform Labs team instead launched Mirror Protocol on Ethereum, where there was a larger and more active DeFi community. As well, the company added further interfaces for Ethereum fans. This provided deeper liquidity to the Mirror Protocol and helped Mirror Protocol receive more attention in the DeFi community. Mirror is designed to appeal to open-source altruism and is expected to grow with community-governed projects and benefits that are shared between participants rather than the company behind the product.

Mirror Protocol was not developed with a business model, does not have a token premine or owner keys, and the financial upside is intended to be within the community. Terraform Labs fulfills its mandate by making stablecoins more useful when Mirror Protocol does well, which means facilitating the growth of UST, which mAssets trade against. The UST is required for minting mAssets. Therefore, Mirror's growth helps expand the scope and use of UST, which is part of the goal of Mirror Protocol.

Mirror is a project developed and steered by its community: its markets are maintained by its own users through MIR incentives, and the protocol evolves with new ideas through democratic governance.

Mirrored GameStop (mGME) is a synthetic asset tracking the price of a GameStop stock. It can be minted on Mirror Protocol, which references on-chain prices provided by Band Protocol's decentralized network of oracles. mGME exists as CW20 and ERC20 versions, which can be traded on Terraswap and Uniswap, respectively.