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What new features does Mirror V2 bring?

Read this article in 18 Minutes

The Mirror V2 version not only offers more options for pledging tokens, but also introduces a new short selling strategy that allows users to have more diverse options.

Different Ways to Earn on Mirror Protocol V2
By Joseph Mirror
0x55, beat BlockBeats

The introduction & have spent

Mirror is a DEFI protocol that creates synthetic assets. With the release of Mirror V2, there are now three ways to monetize Mirror:

· Mirror governance: obtain income by pledging Mir to provide liquidity;

· Be long FARM: buy or borrow to get M assets, and pledge them to the capital pool to get liquidity mining income;

· Short Farm: Short M assets to capture premium earnings between the price of TerraSwap and the price of the Predictor.

These three monetization strategies are different and will be analyzed in this article.

Different Monetization Strategies

1. Mirror governance

The first monetization strategy is Mirror Governance. This is the easiest way to monetise, as users only need to pledge Mir tokens. Currently, the average annualized return on pledged Mir is 48.69%, which of course will fluctuate as the performance of the Mirror fluctuates.

Mirror V2 also adds additional incentives to voters who actively participate in governance. In other words, users will earn money for voting in addition to their existing liquidity rewards. However, it is important to note that participating in the voting governance will lock the pledged MIR tokens until the vote is closed.

2. Do more Farm

This monetization strategy is a little more complicated. The core of the Long Farm is to provide liquidity to the "liquidity pool". If you are not familiar with the concept, here are some suggestions:

, & have spenthttps://learn.zapper.fi/articles/what-is-a-liquidity-pool

, & have spenthttps://www.youtube.com/watch?v=cizLhxSKrAc

This strategy also produces different returns across different pools of money. In general, the more liquidity providers (LPs) a pool has, the lower the return.

As you can see from the chart above, Mirror assets with higher volatility also have higher returns, because as the risk of "fickle losses" increases as the assets move, there are fewer people willing to provide liquidity to these risky assets. The following video explains transient losses in more detail:

, & have spenthttps://www.youtube.com/watch?v=8XJ1MSTEuU0& t=202s

To provide liquidity, users need to provide 1:1 value of M assets and UST. Users can obtain M assets in two ways:Direct purchase or casting.

· M assets can be purchased directly from the "Transactions" screen of the Mirror.

· Another way to get M assets is by casting, which can be done in the "Loans" screen. The minting of M assets is synonymous with the lending of M assets, since the user is in effect mortgaging other assets to obtain M assets.

In the Mirror V1 version, the only collateral that can be used to borrow M assets is UST and other M assets. But in the V2 version, new collateral options were added to AUST, Luna, Mir, and ANC.

Of all the new collateral, AUST is the most interesting because it is an income-generating asset in its own right.

Users mortgage the UST in Anchor Earn and receive the AUST as collateral. Because the AUST will continue to generate revenue, the user will usually receive a lower amount of AUST than the amount pledged.

Anchor Earn 的项目介绍如下： https://medium.com/qi-capital/different-ways-to-earn-on-anchor-protocol-e83592f60307

The casting of M assets is relatively simple: First, choose the assets to be mortgaged; Second, set the mortgage rate. Volatility assets such as Luna, Mir, and ANC typically have higher 'minimum collateral rates' than stable assets such as UST and AUST. Once the mortgage rate falls below the minimum, the user's position is liquidated directly.

For example, if I have 400UST as collateral and I set the collateral rate at 200%, then the value of M asset I can mint/lend is 200UST. But if the price of the M asset I've minted goes up, my mortgage rate will go down and I might even be liquidated. From this perspective, casting M assets can be viewed as a "short".

Note that users can only cast M assets during market trading hours. Because when casting, the user needs to refer to the forecaster price (the actual price), which can only be fed back at the opening of the market. At the close of the market, however, users can still buy M assets, albeit at a slightly different price than the price of the prognostic machine.

After acquiring M assets, the user can inject liquidity into the pool, which can be done in the Mirror's "Farm" interface.

为注入流动性，用户需有等值的 m 资产和 UST。注入完成后，LP 代币会自动质押并为持有者带来收益。

To withdraw liquidity, the user can simply unpledge it in the "My" section of the "Farm" interface.

To clear out a mortgage position (CDP), users can go to the Lending and Borrowing screen to view and manage their CDP. In this interface, the user can also track the income details of various Farm assets.

3. Short Farm

做空 Farm 是 Mirror V2 新引入的一个概念，其目的在于使得 m 资产的价格与预言机价格更为吻合。不同 m 资产的做空 Farm 收益也各不相同。一般来说，TerraSwap 价格（市场价）相对预言机价格（实际价格）溢价越多，产生的收益也就越高。

The process of shorting is very similar to that of casting M assets. The difference is that when a user goes short, M assets are sold directly, and the proceeds are locked in for two weeks. This is to prevent users from using the proceeds to immediately buy back M assets, which would wipe out the effect of the premium drop.

To short Farm, enter the "Farm" interface and click on any of the M assets you are interested in to select Short.

It can be seen that the process of shorting is very similar to that of casting M assets. Both of them need to select collateral assets and set collateral rate. But because the user is casting an M asset, the short position is open only during the opening hours of the market, while the long position is open at any time. Because when you go long, you can still get M assets by buying them in the market.

Shorts do not require UST to be matched equally with M assets because users are not providing liquidity to the pool in the same way as long ones. Users are simply forging M assets that can be sold instantly.

To manage short positions, enter the "My" screen. In this interface, the user can track the revenue details of different Farm strategies.

Strategies to Gain Revenue & NBSP;

We've seen three different monetization strategies on Mirror V2, and users can use a variety of strategies to make money.

One notable strategy is to use AUST. As mentioned earlier, AUST can be obtained by depositing the UST into the Anchor Earn. Those familiar with Anchor should know that lending UST on the platform can be profitable.

So in a nutshell, you can mortgage the bLUNA in the Anchor to get the UST, and then mortgage the UST to get the AUST in the Anchor. Then AUST can continue to be used as collateral to cast M assets, which can be used to provide liquidity in the long Farm.

You can see that in this policy, the user benefits from both the Anchor and the Mirror.

However, it is important to note that when implementing this strategy, try not to use all the AUST borrowed from Anchor to cast M assets,In this way, when faced with liquidation, users can still have a certain buffer when they repay the loans of Anchor.

Another important aspect to note is that when casting M assets with AUST,Try to find M assets with low volatility, because if M assets rise rapidly, liquidation is more likely.

Summary & have spent

Hopefully, after reading this article, readers will have a better understanding of Mirror V2's monetization strategy:

· Mirror governance & NBSP;

Do much Farm

, shorting Farm

Mirror V2 offers a variety of strategies, but there is no one right answer. Users need to weigh the risks and rewards and choose the strategy that works best for them.