[Proposal] Introduce inverse mAssets to replicate short positions

Current situation: Users can mint mAssets, which represent tradeable long positions on an mAsset.

I believe that we should support the introduction of inverse mAssets (similar to inverse synths on Synthetix) which represent synthetic short positions in the given mAsset.

Each inverse mAsset (imAsset) would also be minted with a collateralisation ratio. If the mAsset falls in price, the equivalent mAsset would rise in price, and the collateralisation ratio would fall. (This is inverse to the mAsset situation, i.e. when the mAsset falls in price, the collateralisation ratio rises.)

This is equivalent to giving users the freedom of choice to both long an asset AND short an asset.

Proposal: Introduce inverse mAssets to allow users to replicate a short position in an mAsset.

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Any response on this? I think this is essential. Liquidity providers could effectively mint one of each entering into a directionally neutral position like a short option straddle, and the capital requirement for minting both would be the same as for minting one, since only one side can go bad. It would immediately double the available liquidity for traders to access.

Hi, any update on this, I think it would be a great feature to have.

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This can be a solution to current problem with price premium, as well as giving incentive for “shorting” mAsset.

But this also requires a large mechanism change (also for web frontend) so it should be investigated carefully before making this change.

  1. Long position for mAsset is still a benefit if we consider the LP staking benefits.
  2. Inverse mAssets, even when it’s price rises, if it does not benefit the minter more than LP staking for regular mAsset, it would still be more benefitable to just provide liquidity for regular mAsset
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Wouldnt this reduce the incentive to mint (mint and sell = short) and then the whole thing would fall apart?

-If you could stake in a pool of the mAsset & it’s inverse as the pair (rather than using ust) then you could provide direction-neutral liquidity for the same capital requirement as minting just one mAsset.

-The primary incentive to mint, in my view, should be to provide liquidity and not the ability to be short. If you mint the mAsset & the inverse even @ a 200% capital requirement, it would more advantageous to do so than to buy the mAsset/inverse on swap market and stake that way.

Then, any market participant would have the option to go short and it should drive more volume/rewards/adoption etc…