How does Mirror Protocol (MIR) work?<\/strong><\/h2>\nIn Mirror Protocol, users act in one or more of the following roles: Trader<\/strong>, Minter & Shorter<\/strong>, Liquidity Provider<\/strong> and Staker<\/strong>. In addition, there are special auxiliary agents that are required for Mirror’s infrastructure called Oracle Feeders<\/strong>.<\/p>\n– Trader
<\/strong>A trader<\/strong> engages in buying and selling mAssets against UST through Terraswap and benefits from price exposure via mAssets.<\/p>\n– Minter & Shorter
<\/strong>A minter<\/strong> is a user that enters into a collateralized debt position (CDP) in order to obtain newly minted tokens of an mAsset. CDPs can accept collateral in the form of UST, mAssets, or whitelisted collateral and must maintain a collateral ratio above the mAsset’s minimum multiplied by a premium rate for each collateral type (set by governance).<\/p>\nA shorter<\/strong> is a user that enters into the same CDP but to sell the minted tokens immediately and get newly minted sLP tokens. sLP token can be staked to earn MIR reward when there is a price premium for Terraswap price compared to the oracle price. Therefore, shorters effectively take a short position against the reflected asset’s price direction. Excess collateral can be withdrawn as long as the CDP’s collateral ratio remains above the minimum. Minters can adjust the CDP’s collateral ratio by burning mAssets or depositing more collateral.<\/p>\n– Liquidity Provider
<\/strong>A liquidity provider<\/strong> adds equal amounts of an mAsset and UST to the corresponding Terraswap pool, which increases liquidity for that market. This process rewards the liquidity provider newly minted LP tokens, which represent the liquidity provider’s share in the pool and also provide rewards from the pool’s trading fees. LP tokens can be burned to reclaim the share of mAssets and UST from the pool.<\/p>\n– Staker
<\/strong>A staker<\/strong> is a user that stakes either LP tokens or sLP tokens (with the Staking contract) or MIR tokens (with the Gov contract) in order to earn staking rewards as MIR tokens. Whereas LP and sLP token stakers earn rewards from new MIR tokens from inflation, MIR token stakers earn staking rewards from CDP withdrawal fees.<\/p>\nIf the user has staked MIR tokens, they are eligible to participate in governance and receive voting power weighted by the amount of their total staked MIR. Governance is the process through which new mAssets get whitelisted and protocol parameters can be altered. LP Tokens can be unstaked at any time, but MIR tokens can only be unstaked when they are not used to represent a vote on a pending governance poll.<\/p>\n
– Oracle Feeder
<\/strong>An oracle feeder<\/strong> is a designated Terra account responsible for providing an accurate and up-to-date price feed for a specific mAsset or whitelisted collateral and is the sole party that is permitted to update the registered reported price of the reflected asset. Because of its crucial role in the operational stability of mAssets, the oracle feeder is elected through governance and will be swiftly replaced by the community if ever it underperforms in its duties.<\/p>\nWhat is the Mirror Protocol (MIR) token?<\/strong><\/h2>\nThe Mirror Token (MIR)<\/strong> is Mirror Protocol’s governance token. Currently, it must be staked to vote on active polls and is required as a deposit for making new governance polls. In future iterations of Mirror, it will serve further purposes for the protocol that increase its utility and value.<\/p>\nUsers that stake MIR tokens also earn MIR rewards generated from withdrawing collateral from CDP positions within the protocol.<\/p>\n
MIR is also used to incentivize users to farm yields by staking LP tokens which were minted by providing liquidity for MIR and mAssets. Yield is paid to the users from MIRs that are newly minted through annual inflation, which gradually increases the total supply of MIR until the end of 4th year.<\/p>\n[\/et_pb_text][et_pb_text _builder_version=”4.23.1″ _module_preset=”default” header_3_text_color=”#ff8f00″ header_3_font_size=”18px” locked=”off” global_colors_info=”{}” theme_builder_area=”post_content”]\n
Mirror Protocol development updates in 2023<\/h2>\n
In 2023, Mirror Protocol, a decentralized finance platform known for its synthetic assets that track real-world asset prices, has experienced a relatively stable year without significant technological advancements or major updates to its network. The key focus of Mirror Protocol remains on its foundational features and the utility of its MIR token. Here’s an overview of the key aspects as of 2023:<\/p>\n