Welcome to Episode #30 of Wealth Mastery Coin Review. I hope everyone has had a wonderful week stacking sats and watching Ethereum dominate market sentiment. If you’re new to the newsletter I’d suggest downloading Issue #22 where I review Terra Protocol. If you haven’t already, It will assist in understanding the foundational structure behind today’s review of their newest addition Mirror Protocol.
Introduction
Mirror Protocol is the first synthetic assets protocol that tracks the price of stocks, futures, exchange-traded funds, and other traditional financial assets. Mirror Protocol enables the minting of synthetic assets called “mAssets” (Mirrored Assets). These mAssets “mirror” the price behavior of real-world assets by reflecting the exchange prices on-chain. These synthetics can be held in fractional amounts and transacted while maintaining open access and censorship resistance. Developed by Terraform Labs (Wealth Mastery Issue #22), Mirror is a decentralized protocol, with all decisions determined through on-chain governance. In doing so Mirror Protocol democratizes access to US equities and other assets that have been difficult to approach for anyone outside of the United States. Mirror Protocol is designed to expand global accessibility to foreign markets, reducing the friction when switching between different assets, and enabling speedy order executions. Combining the best that DeFi has to offer with real-world asset exposure built on both Terra and the Ethereum blockchain. Mirror utilizes a combination of liquidity pools for each asset with scalable, real-time decentralized oracles provided by Band Protocol and others to ensure that orders can be executed as fast as the block time of the network.
To mint these mAssets, issuers are required to lock up 150% of the current asset value in Terra stablecoins or other issued mAssets as collateral. If the value of the asset rises above the collateralization threshold, the collateral is liquidated, guaranteeing solvency of the entire system. In situations where the tracked asset undergoes a corporate event such as a stock split, merger, bankruptcy, etc. and becomes difficult to reflect due to inconsistencies, an mAsset can be deprecated, or discontinued, with a migration procedure determined by the Oracle feeder. To target the price of the mAsset, the system reads in underlying asset prices via decentralized price oracles where prices are updated every fifteen seconds. When the price of the mAsset drifts significantly from the primary market, traders are incentivized to buy or sell the asset in order to mint or burn and claim the collateral. Users can mint and burn mAssets against the CDP (Collateralized Debt Position) to adjust the value of their CDP’s effective C-ratio. This C-ratio, is the ratio of the value of a CDP’s locked collateral to the value of its current minted tokens. Developed to facilitate all of this is the Mirror Wallet. A completely non-custodial wallet that is maintained by ATQ Capital. Mirror Wallet allows users to buy synthetic assets and track the prices of the thirteen most popular US technology stocks, including Apple, Google, Tesla, Netflix, Twitter, Microsoft Corporation, Amazon, and Alibaba, all using TerraUSD (UST). In the future Bitcoin and Tether will be accepted for the purchase of synthetic assets. But, currently…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
