What is Mirror Protocol, and how does it work?

6 min readDec 23, 2021


Mirror Protocol is a decentralized trading protocol that allows you to create and trade synthetic assets, bringing the conventional and blockchain worlds together in one location.

Mirror Protocol, which, like Synthetix, is focused on creating synthetic assets, is one of the fastest-growing DeFi protocols on Terra (SNX).

mAssets, or Mirror Assets, are synthetic assets that may be used to reference any form of assets, such as gold, oil, or any cryptocurrency.

The goal is to combine everything into one enormous market, allowing traders to trade various assets in one spot without going through KYC and in a decentralized manner.

If you don’t understand the scale of this concept, consider a decentralized exchange where you can trade the assets of the world’s top exchanges (Nasdaq and NYSE), then add the entire crypto world to the equation, and you have Mirror Protocol.

The platform’s capabilities are limitless, and many people make use of them to move freely between the regular financial world and crypto without friction, delay, or risk.

What is Mirror Protocol, and how does it work?

Mirror Protocol, as previously stated, is a decentralized finance programme that runs on the Terra blockchain and has a close relationship with the LUNA token and the UST stablecoin.

In principle, its function is analogous to that of Synthetix, where we may work with assets that synthesize and reflect the value of another asset (hence the name Mirror Protocol or Mirror Protocol).

Assume we want to acquire Amazon shares, but we want to do it on a decentralized platform controlled by Nasdaq. Mirror Protocol provides us with an alternative in this instance. All we have to do is go to its website and establish a new mAsset with the name mAMZN (AMZN is the market name of Amazon).

At this moment, we must infuse the required money to ensure the success of the mAMZN. This is because the production of this mAsset occurs in response to staking Overcollateralized inside Mirror Protocol, which, when completed, creates a particular number of mAssets.

Because the mAsset is overcollateralized, it is less likely to crash owing to the high volatility of the cryptocurrencies utilized in its production. As a result, while establishing mAMZN, the smart contracts required for our new mAsset to constantly represent one thing: the actual AMZN value on Nasdaq, all in a decentralized manner.

Suppose you are a crypto investor searching for new markets to diversify your portfolio. In that case, assets like AMZN or other corporations are excellent to start. Although they do not expand as quickly as many cryptos, their growth is typically fairly consistent, with solid returns and minimal danger.

In any case, it is a once-in-a-lifetime opportunity to bring the crypto world closer to the realm of traditional stock market investing.

As you can see, the Mirror Protocol has a lot of potentials. Consider for a second that you can accomplish the preceding with any firm or asset in a real-world exchange.

This opens the door to new investment markets and, as a result, new means of earning or preserving advantages. On the other hand, Mirror Protocol has that capability and makes it open to anybody in the world.

Mirror Protocol’s Roles

Of course, the above example demonstrates that there are several well-defined roles in Mirror Protocol, including:


Minters are the developers of Mirror Protocol’s synthetic assets (mAssets). Its primary function is to provide the required and overcollateralized liquidity to create new mAssets.

For example, a minter needs to enter roughly US $ 4.025 in UST stablecoin (15 per cent over-collateralization) or the US $ 5.250 in LUNA (50 per cent over-collateralization) to generate our mAMZN token (with a value of about US $ 3.500 per token/share).

As you can see, the same technique used to produce coins in MakerDAO is also utilized to generate coins in MakerDAO, and over-collateralization serves to stabilize the asset’s price against cryptocurrency price swings.

It may be exchanged in Mirror Protocol with the formation of mAssets (mAMZN in our example). It will always track the price of Amazon’s market share.


Traders are interested in purchasing or selling mAssets based on their needs and strategies.

They may acquire mAMZN tokens freely, without registering, and in real-time, exposing their money to a token that is a genuine mirror of the activity, they wish to buy, thanks to the Mirror Protocol.

Providers of Liquidity

Because Mirror Protocol is an AMM-type DEX, it requires liquidity providers to build the necessary liquidity pools to facilitate trades.

Like other DEX AMMs, Liquidity providers are paid commissions for any change made inside the pool in which they participate.


Finally, there are stakers, which are divided into two categories:

LP token holders get Mirror tokens (MIR tokens) in return for participating in the LPs.

MIR Stakers, who make money on CDP withdrawals.

The CDPs are responsible for enabling minters to create mAssets on the platform.


Farmers are users who utilize Mirror to implement yield farming tactics.

To do this, farmers must input the chosen mAsset token and its UST value in a 1: 1 ratio.

For example, a farmer in Mirror can take one mAMZN (worth 3.500 US dollars at the moment) and combine it with 3.500 UST to engage in Mirror’s yield farming option.

Farmers can get incentives for their positions using this approach, making it a viable alternative for generating passive money on this site.

MIR Token, also known as the Mirror Protocol token

The Mirror (MIR) token is the platform’s native token. Its primary function is to serve as a reward system for stakeholders and the token that measures the voting power of its holders within the protocol’s decentralized governance.

Because the MIR token is critical to the system, the developers have opted to restrict its existence to a maximum of 370.575.000 tokens to accomplish its revaluation.


Mirror Protocol is an intriguing concept with a lot of potentials.

The objective to connect the real-world financial and asset worlds with the blockchain cosmos can provide new possibilities and attract more investors.

In any case, the force of DeFi manifests itself once more, revealing all of its potential in a world more condemned to it.

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