Utilising Mirror Protocol
Disclaimer: This article assumes that you already have a Terra wallet with funds in UST or LUNA and an understanding on how how to interact with dApps. This article is for the Flipside Mirrror Protocol bounty. However I would also like to share about the strategy that I found and am using to maximise returns on Mirror.
Mirror Protocol enables the creation of synthetic assets (mAssets) in a decentralised manner allowing users to literally track real life assets as long as there is an oracle for price.
The most obvious mAssets to track would be US equities, however, you can also mint mBTC, mDOT, mETH, etc as mAssets too. This allows for anyone in the world to have access to markets that may be out of reach for any reason. And on top of that you are able to use your mAssets to generate yield through farming!
Using Mirror.finance
The most simple strategy is to buy and hold your favourite mAsset, but that would not be the smartest thing to do given the functions of mirror protocol!
Here is a quick overview of what strategies you are able to deploy on mirror
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Short Farm mAssets
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Long Farm mAssets
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Staking $MIR
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Combination Strategies
'short, long buy neutral' combination strategy
The strategy I have decided to go with is a delta neutral strategy that isn't affected by the volatility of price in the long run. Please do follow the link I have provided to find a list of strategies that was shared in the Terra community.
Brief overview of the dashboard.
Step 1 2/3 of the principal was already deposited Anchor Earn for that juicy 20% APY. Using the aUST that is given after depositing you will short your chosen mAsset in Mirror.
Step 2 Buy the mAsset you have shorted in step 1 with 1/3 of principal. You will long farming this mAsset in 2 weeks. Technically you are already neutral, but you are not maximising the mAsset by long farming as it requires an equal amount of UST to farm.
Step 3 UST is unlocked from step 1
Step 4 Long farm mAsset/UST. By this stage you will be earning $MIR from your short and long farm and remain delta neutral to the price of your mAsset
If your investment principal is below <10k I would not suggest you to collect your $MIR rewards that often as the tx fees will not be worth it. Currently after a month of farming with $1500 I only have like $30+ in MIR rewards
Bonus step 5: With Apollo launching soon, they are currently having a community farming event where you can earn Apollo tokens @ launch price!
By farming in their mAsset or MIR vault, how cool is that! Instead of earning $MIR you can participate Apollo's launch here with your LP pair. You will have to break the LP pair on Mirror and then provide liquidity on Apollo, you cannot just port the LP pair over. As Apollo is a new project, do ape responsibly.
In the dashboard below I started with $1500, I would suggest an amount above $1000 for such strategies to make sense. If you are reading this pre col-5, wait until col-5 is deployed tx fees should be lower!
Resources to master your Mirror journey
Danku_R - Amazing guy from Germany sharing quality content for TeFI and introduced me to the delta neutral strategy on Mirror
Mirror Tracker Shoutout to the team who created this! Use this website to understand deeper on the strategies you can deploy to earn that juicy yields. It has historical data on mAssets APR, a ROI calculator and even an alert feature!
Mirror.finance documents As you know in crypto we need to DYOR, so please don't take everything I have said as truth but go to mirror.finance gitbook and get it from the source itself!
SQL Credit: TheZoomer's article
Given my limited SQL ability, I am using the SQL code I found on THEZOOMER's article. Do go take a read if you are interested in understanding more about Mirror's assets.
I thought it was interesting to note that the 2 most traded mAssets are other crypto projects as well.mBTC and mETH still dominates transaction volume on Mirror by a mile. I would imagine most people interacting with DeFI and TeFi at the moment are savvy investors that probably already have US equity positions with their brokers outside crypto.
Given that Mirror Protocol is still susceptible to black swan events and normal DeFi risk, it would make sense for people to be sticking with other crypto project mAssets for a higher potential upside and take on more risk
The graph in thezoomer's article has volumes that are much greater than what we see in the last 30 days. Would be interesting to dive deeper to understand why Mirror's total tx volume has decrease tremendously since July.