Last edit: 2/10/2021
Mirror protocol v1 has resoundingly proven market demand for synthetic price exposure to real world assets, and has managed to self-organize an amazing community around itself. But it is not without its problems. In the short existence of the protocol, the community has identified many areas of improvement around the protocol & suggested potential fixes on and off this forum.
The goal for this document is to succinctly summarize the key issues of Mirror v1, and to collect the best solution to these problems that would culminate in a v2 protocol upgrade proposal. This is intended to be a living document to address problems & solutions as they arise, so if a problem area you think its important has not been included, please do leave links to relevant forum posts in comments below.
As the community forms a consensus around each of the problem areas, I will start to tag each problem with the tag “consensus”. Other states will be “unsolved”, and “debating”.
Mirror v1 key problems
- Premiums persist: mAssets consistently trade at a premium to underlying stocks. There is little incentive for users to try to bring them down
- New assets dilute liquidity rewards: new assets being added dilute liquidity incentives of existing pools
- Low incentive for gov participation: Rewards for gov staking is lower than for liquidity participation. For users already staked, voting actually results in a penalty, as it locks up tokens until the vote has expired.
- Listing process is too slow: GME, AMC were attractive listing targets when the proposals were made, they are no longer as attractive now. How can we list mAssets faster?
- Limit orders: Automated trading requires limit orders. How?
- Margin trading: It would be attractive for mAssets to trade at margin
- Pre-IPO contracts: This would be a cool-to-have.
- Shuttle is centralized
Mirror v2 solutions
- Premiums: 1, 2, 3. Most suggested solutions attempt to create incentives for inverse tokens, to absorb mAsset farming demand & allow users to hedge positions better.
- Reward dilution: This is actually an ok problem in my opinion - we just need to make sure the rewards on ethereum fall proportionally with the pool incentives on Terra to maintain parity.
- Low incentive for gov participation: No outstanding proposals. We should 1) only give out rewards to users that vote on at least [1/2] outstanding proposals.
Listing process is too slow: 1 - reduce the
effectiveDelayparameter to 1 day from 1 week
- Limit orders: No outstanding proposals.
- Margin trading: No outstanding proposals.
- Pre-IPO contracts: 1 (@Sihyeok please write up and link)
- Migrate Shuttle to Wormhole: Decentralized PoA bridge
Looking forward to thinking through to a rock-solid v2 together, folks!
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