Terraform Labs announced today the launch of ‘Mirror Protocol,’ the first synthetic assets protocol that tracks the price of US stocks, futures, exchange-traded funds, and other traditional assets, connecting crypto with global financial markets.
Globally, the US equities are an attractive class, but access to the $36.3T market is limited. Mirror solves this by enabling the mining of synthetic assets or “Mirrored Assets,” which mirrors real-world assets’ price behavior. Reflecting the exchange prices on-chain Mirror will give traders price exposure to real assets that may not be accessible.
The Terra vision
South Korea-based Terraform Labs is the company behind the programmable stablecoin, Terra. The platform investors are Arrington XRP Capital, Coinbase Ventures, Galaxy Digital, Pantera Capital, and Polychain Capital.
“I met the founders, Do and Daniel (Shin) in Korea in mid-2018 and was impressed with their eCommerce experience and vision for what Terra could become,” Michael Arrington of Arrington XRP Capital said.
The founders wanted to produce a stablecoin meant to be used in eCommerce transactions.
“Their vision of using seigniorage as a way to encourage its use in eCommerce, creating a virtuous cycle of usage and growth, seemed like a no-brainer,” he added, noting that “they have executed beyond our expectations since then. We have never sold any of our original investment, and we have slowly acquired a multiple of that initial investment over time.”
Investing in US equities worldwide
Kwon, the co-founder, and CEO stated that his team was “motivated to create a way for retail investors worldwide to participate in the US equities market more easily. Mirror enables the minting of synthetics that trace equities and other traditional financial assets demanded by everyday retail investors, further integrating cryptocurrencies into the global economy.”
Investors worldwide have spent years trying to look for ways to integrate cryptocurrency with traditional financial markets. Kwon stated that the target market for the product is the users coming outside of the US:
“One of the main value propositions of Mirror is to grant 24/7 exposure to and fractional ownership of synthetic assets, such as US equities, to people who don’t currently have an easy way to access these types of assets.”
Mirror will launch a farmable governance token (MIR) that earns fees from the asset trades. mAssets are listed and traded on Uniswap and Terraswap decentralized exchanges. By adding the Mirror governance token to liquidity pools, MIR holders can earn 0.25% from trading fees. To burn the mAssets, the issuer must burn a similar amount of mAssets issued, which stimulates the formerly locked Terra stablecoin collateral return.
Terraform Labs states that users need to contribute to liquidity provision for mAsset and MIR pairs on Uniswap to be permitted to receive airdropped MIR. Users may go to Terra.mirror.finance to produce Terra-side liquidity, and eth.mirror.finance to provide Uniswap-side liquidity.
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