SIMP-1: End Ethereum MIR Rewards

Seriously Improving Mirror Protocol #1: Ending Ethereum Liquidity Incentives

This is the first proposal by the Mirror Steering Committee. We are introducing it before the vote on allocating funds to the committee completes given that the community have voted overwhelmingly in favor of our formation, and since it requires no funds to push forward, we can have more time to discuss the proposal.

https://eth.mirrorprotocol.app/

At the beginning Mirror was the first dapp on Terra, this necessitated incentivizing people to move between Terra and the Ethereum Network hence the need for Ethereum based Mirror emissions. Currently these are 50% of all emissions. However, as time has passed, and Terra has become one of the largest blockchains in the world, this has become a hindrance to Mirror. Most of the pools that are incentivized have very little trading volume. The mTSLA-UST pairing is averaging under $40,000 of volume per day over the last week without a single trade on some days.

https://v2.info.uniswap.org/pair/0x5233349957586a8207c52693a959483f9aeaa50c

This is clearly a vampire pool that serves no value to Mirror and should have its rewards removed immediately. This has been mentioned repeatedly over the last year.

Do Kwon actually mentions the issue with maintaining pool parity with Terra in his v2 post over a year ago. This has clearly not been the case. Currently 50% of all emissions occur on ETH focused on the original pools. Two tokens are no longer in their prior form, but emissions continue to this day to those pools. The mVIXY and mIAU pools no longer have functioning oracles and continue to emit every block. mVIXY holders receive over 14% per day on their liquidity with no fear of being liquidated. There is obviously no liquidity for this dead token, nor has there been for many months.

https://v2.info.uniswap.org/pair/0x6094367ea57ff4f545e2672e024393d82a1d3f28

However, there is a major issue that prevents easily changing the ETH based Mirror rewards; the contract keys have been burned. This will require a migration to a new Mirror token. The community will needs to express our desire for this major error in the original deployment, and solve the problem sooner rather than later. There is ~40m (~$55m) remaining to be distributed on the ETH side between MIR and mAsset liquidity incentives which serve no purpose. Mirror can easily afford to pay for this error to be fixed instead of paying a small number of users in dead pools. TFL would need to either take on this task themselves to rectify their error or work with the community to find suitable developers to take on this task.

What a YES vote means: Express support for ending ETH emissions via a MIR token migration

What a NO vote means: Express support for 50% of MIR emissions to go to a vampire farm

No tokens are to be transferred in this proposal as it is dependent on what TFL decides.

NB: You may recognize some names from the MSC in the prior posts, especially regarding v2 upgrades.

9 Likes

You forgot this:

What an ABSTAIN vote means: I don’t give a f*** i’m just here for the governance rewards

4 Likes

I believe the original idea of having liquidity on ethereum to draw in users was a good one. And it still is. TVL on Mirror continues to decline over time, in spite of the Terra ecosystem growing as a whole. In the ethereum-community we have a huge potential user base for Mirror.

The problem is that uniswap has de-listed mAssets in fear of the SEC. So most ethereum-users never discover Mirror.

The best solution would imo. be to move from uniswap to e.g. pancakeswap. I am sure lots of pancake-users would love to take part in staking Mirrored assets. And this could in turn be a great entrance to the Terra ecosystem.

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I think most of the volume on Terra is vampiric too with most people just farming rewards, especially delta neutral farmers. The transaction costs are just cheaper on Tera. It’s a bit of the pot calling the kettle black.

The pools aren’t dead other than mIAU and mVIXY. They track the price of the asset basically as well as the pools on Terra because they get arbed if they don’t.

How is that going to practically going to work with multiple centralized exchanges and custodians already supporting the wrapped MIR token? You’re just going to declare the old token is uncovertable and worthless after a certain date?

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  1. Perhaps, but it is on the native chain. Look at who was farming most of the volume, and where.
  2. That is completely inaccurate. The MIR-UST pool have less than 7% of astroport. It is routinely off by 3+% and receives 333% more rewards than any other pool. As of writing this, in the last 24hrs, there was an 8hr gap where no liquidity was utilized. No adds/removes or swaps. That is dead.
  3. They would need to convert. Yes. But that is beyond the scope of this particular proposal.

While I don’t think PCS is the best option (they were there and incentivized previously), I do believe expansion is necessary in the future. But that is beyond the scope of this proposal, this is just to initiate recouping the rewards from a dead ETH contract and then deciding what to do with it.

This is a concern that the MSC has as well and we are looking at various options to prevent/reduce extractive DN farming that does not contribute anything to the protocol. Some options being discussed include “mint on LP deposit” and “mint 2n to LP”. Other ideas are certainly welcome.

That said, ending the Ethereum MIR emissions is an obvious first step to righting this ship. There is a ~$55M sized leak that needs to be plugged as adjustments to the ship’s engines are being worked out.

Pancakeswap isn’t on ethereum mainnet, it’s on BSC. Liquidity cannot be moved there because it’s on the wrong network.

the delta neutral farm incentives is a $110m sized leak created by V2 that’s much easier to address. You’re talking about development and reauditing of likely all the protocol apps, the bridges, etc. which sounds very expensive in terms of limited dev resources. Not to mention the potential delisting of Mirror from exchanges. The end result will just be the whales moving from eth farms back to terra to farm there. So what do you get? Slightly deeper liquidity pools, I suppose.

It sounds big, but the eth pool emissions only end up being like 10% of the current outstanding market cap emitted over a couple years and it’s a lot of effort and additional risk to everyone just to end up with the same vampiric farming result.

3 Likes

Sorry, I meant Sushiswap. But anyway, it was just meant as an example. The point is we should move away from uniswap to another AMM.

Sushiswap would be a better choice than Uniswap, but that brings us right back to one of the core issues from the proposal:

However, there is a major issue that prevents easily changing the ETH based Mirror rewards; the contract keys have been burned.

We can’t redirect the rewards from Uniswap to Sushiswap any more than we can turn them off. The only way to exert any control over what’s happening on Ethereum would be via token migration.

So no changes can be done to the ETH-emissions without replacing the MIR token? This is incredibly unfortunate, but I guess it explains why TFL has not done any updates on ETH-Mirror pools since launch.

On the other side, most of the harm has already been done with over 50% of the total rewards issued in the first year.

Replacing the MIR-token would surely be a dirty process. Perhaps it is better to lobby for uniswap to re-list mAssets. Alternatively, promoting an alternative frontend, since the de-listing is only on the uniswap UI.

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Uniswap is not incurring the wrath of the SEC.

Here we go.
https://mirrorprotocol.app/#/gov/poll/252

How to maintain liquidity on ethereum ? if we can it would be good to rebuild the contracts.

The token emission can be (dynamically) adjusted on the different networks.

With a formula that could take into account the volume and the liquidities to allocate a fair share between networks for example.

With the ability to perform administration tasks and better pool management would be good.

There is no reason for liquidity to be on ETH. There is no trading volume.

I agree that there are no volumes at the moment.
However, it seems to me that depriving yourself of a major network would be a bit too drastic a decision. Let’s just be aware that there is an imbalance in the distribution of rewards. It seems to me that it would be preferable to envisage modifications concerning the contracts and their management.

Hence my questions for managers:

  • What is the current status of contracts on the ethereum network in terms of management and administrative rights?
  • Can we resume on this thread the distribution between the networks and the pools? Let us know what is editable and what is not.
  • How would the stop of the emission on the ethereum chain take place? List what would be altered with estimated deadlines.
  • Have you ever considered a “hard fork” if necessary? What is possible/not possible, what is easy/complicated, what causes problems and what does not cause problems.

Edit: I mean by this that we can of course respect the vote, however that does not prevent us from thinking about the implementation of something more balanced by going back to a vote of course.

Greetings

1 Like
  1. They are burned.
  2. Nothing can be changed.
  3. Migration to new wrapped MIR.
  4. New token is the only option.

It is certainly an option. But emitting to dead pools with no volume is the height of stupidity. Also keep in mind that Mirror has not even bothered to port new mAssets to ETH, so ETH isn’t actually even supported. It is a dead legacy implementation that is fundamentally broken.

Yes, also the fees for using ETH are still high, maybe when ETH 2.0 takes hold, things might be different, but LUNA as it is works well.

can we restart the vote again ? :confused: