Crypto Currencies

Mirror Protocol Review and Opinions 2022 Is it legit?

mirror financial analysisMany people make a clear distinction between the world of cryptocurrencies and the rest of the markets, like the stock market. But thanks to projects like Mirror Protocol, the line between these types of assets is thinning.

In this article, I will tell you what the mirror protocol is, what its proposal consists of and how it can change the way millions of people invest.

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Introduction What is the mirror protocol?

MirrorProtocol is a DeFi protocol which allows users to manufacture tokenized assets by creating synthetic assets. But what is a tokenized asset? These types of assets are nothing more than representations of real-world assets on the blockchain.

To do this, Mirror Protocol opted for the creation of 100% synthetic assets, a much more efficient and interesting method than creating tokenized assets backed by a real asset.

What are mAssets?

The mAssets are the synthetic assets that are generated in the Mirror Protocol network, and well that there are currently only US stocks, ETFs and some crypto -currencies, it is expected that in the future there will be a much larger catalog of synthetic assets.

These assets replicate the price of your real asset and can be traded 24/24. Of course, all this works thanks to a system of smart contracts or contracts smart which runs on the Terra network.

But what is the advantage of investing in these hammers instead of the real asset?

The main advantage of Mirror Protocol synthetic assets is that they are available to anyone, anywhere, anytime.

So, if someone wants to buy mBABA (synthetic shares of Alibaba), they will have the same facilities whether they live in the United States, Spain or Egypt. In addition, any type of middleman who charges high commissions is eliminated, since operations are performed directly on the blockchain.

What can we do in the mirror protocol?

For the entire Mirror Protocol system to work properly, the participation of 5 types of users is necessary:

Traders

Most users of the Mirror Protocol platform are tradespeople, which are in short those who use the platform to buy mAssets.

These purchases are made on scholarships Terraswap or Uniswap, both of type AMM (Automated Market Makers), and the stablecoin Terra UST is used for this.

Coin acceptors

The coin acceptors are the users who are responsible for creating the mAssets. They do this by blocking a portion greater than 150% (collateral ratio) of the value of the asset in Terra UST or another masset that can be used as counterparty.

coinage in mirror protocol
Strike with 150% guarantee

In case the price of the asset falls below the counterparty, the position will be automatically liquidated in order to guarantee the solvency of the system. Therefore, the offset position must be at least 150% of the mAasset position.

Moreover, the higher the rate of warranty is high, the less likely this is to happen (the maximum is 400% of the asset value).

when monteur does this, a Secured Debt Position (CDP) is created that is backed by Terra UST or another mAsset. As change machine, you can withdraw your position whenever you want, by burning the mAsset and receiving the UST or the collateral mAsset.

If you decide to frapper, it is important that you review your positions frequently to add more consideration if necessary so that the position is not automatically liquidated.

Liquidity providers

Suppliers of liquidity are those who provide the liquidity necessary for traders to operate on stock Exchange. This happens because the mAssets are purchased on scholarships AMM, in which the counterparty to your transaction is not another user, but a smart contract.

Of course, there has to be someone to provide the resources for this. smart contract, and this is the role of liquidity providers. These users deposit Terra UST and mAssets in the pools, and in return they receive LP tokens.

These LP tokens can be converted back into assets that have been used to access the pool at any time. And as you can imagine, the liquidity providers do so in search of the rewards that Mirror Protocol offers to those who give liquidity to the market (they get them from commissions paid by users).

stakers

mirror protocol with staking

Users who provide liquidity to the system (liquidity providers) have the opportunity to obtain rewards by staking with the LP tokens they receive for depositing funds into the pools. As staker, you can withdraw your LP tokens and generated rewards at any time.

These LP tokens can be either mAsset–UST or MIR–UST, but in either case the staking works similarly. Each LP token has different rewards for the staking with him, and is represented by the acronym APR (annual percentage rate).

Oracle Loader

THE Oracle or Oracle in French is the mechanism used by the Mirror Protocol system to detect the price of replicated assets and thus modify the price of mAssets.

This replication is not perfect or instantaneous (Oracle takes 60 seconds to update the price), so sometimes it is possible to see a small discrepancy between the asset price and the asset price.

When this happens, platform users have more incentive to buy or sell mAssets, which ultimately means that the price of mAsset is closer to its real price.

The MIR token

The Mirror Token (MIR) is the native token of the Mirror Protocol platform, and its primary uses include governance. En staking your MIR tokens, you can vote on open proposals or create your own, so the fate of the platform is largely up to users.

But this is not the only function of the MIR token, it also serves to induce liquidity providers and subscribers, who receive their rewards in MIR tokens.

It is a token that runs on the Ethereum blockchain with a limited supply of 370 MIR, which will be distributed gradually over 575 years and in various ways. There are currently less than 70 MIR in circulation and its market capitalization is approximately $000.

Platforms

One of the big advantages of Mirror Protocol is that you can use its mAssets and other functions from different platforms. These are the main ones:

Mirror Web App

Mirror Web App is the official platform of Mirror Protocol. Here you will find everything you need to exchange with mAssets, frapper, add cash and stake out, among other tasks.

To use it, you just need to install the Terra Station extension (only supported by Google Chrome) and connect your cryptocurrency wallet. Once the extension is installed, you can create wallets or select existing wallets, whether physical or virtual.

Mirror Wallet

Mirror Wallet is the official Mirror Wallet, specially designed for users to access Mirror protocol features from their own mobile device. It is available for Android and iOS, although the truth is that it does not work as well as the Web Mirror application.

terraswap

Some assets obtainable in TerraSwap
We can find assets such as Microsoft, Apple or Ethereum, among others

Mirror Protocol relies on Terraswap to further decentralize your system. This way, you can use Terraswap to acquire and trade mAssets and to deposit and withdraw tokens from pools, i.e. to provide liquidity to the system.

meth

Another platform you can use to invest in MIR and other assets is mETH, a website that allows you to stake the LP tokens that you get by providing liquidity to the system.

However, for mETH to be fully functional, you must use it in conjunction with Uniswap, which will allow you to trade with mAssets and provide liquidity to the system to obtain LP tokens with which you can bet mETH.

To use mETH, all you need to do is connect your cryptocurrency wallet, and it currently supports: Metamask, WalletConnect, and Coinbase Wallet.

Opinion and conclusion

The Mirror Protocol and other tokenized asset creation platforms such as Synthetix are creating a new way of understanding investments because although today only stock, ETF and cryptocurrency assets can be created, this technology can be extended to many other markets such as commodities, precious metals and even NFTs.

The future of the mirror protocol is uncertain, although there is no doubt that asset tokenization has practical benefits that everyone can benefit from:

  • It allows users to buy and sell fractions of assets.
  • Transactions can be made anytime, anywhere.
  • No intermediary can increase costs and slow down the process.
  • Many assets will gain liquidity when tokenized, opening the door for many people to invest in them.

However, it will be necessary to study how this project is developed.

Currently, a sharp increase in liquidity can be seen within the platform, which exploded in the first half of 2021, reaching over $1,2 billion.

This gives us clear indications that the crypto community receives the mAssets quite well, and nothing can make us think that will cease to be the case when they continue to add tokenizable assets.

More information on Mirror Finance website

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