MRC-2: New Asset Listing - MIR

Description of the Proposal

I propose to list MIR on Mars Protocol.


Mirror protocol is DeFi protocol on terra chain, that enables creation of synthetic assets called Mirror Assets, short mAssets, price of mAsset mimics that one of it’s real world counterpart. Main objective of Mirror Protocol is to allow anyone in world to trade, and bet on price of assets, without requiring KYC, big bank accounts, all while being fully decentralized.

Mirror Token (MIR) is Mirror Protocols governance token, MIR captures value of protocol, it is used for inventivizing positions and providing liqidity.

Basic links

Market Risk

Per proposal of Red Bank Asset Listing Risk Framework, here are market risks.

  • Maximum intraday drawdown: -30%, 3.6.2022
  • Volatility: 6.3%
  • 24hr volume: $2M on LP pair, 100M on all markets.
  • Worst 7-day volume: $3.7M on LP pair, I couldn’t find one for all markets

The above metrics lead to the following scores:

Ticker 1D Worst Drawdown (1y) Volatility (90d) Volumes (90d 24hr avg.) Volumes (Worst week 1yr)
MIR B B D or B D

Technical Risk

Different parts of the contracts have been audited as follows:
Mirror v2 Smart Contract Audit by Cryptonics

Mirror has Bug Bounty Program, that will pay a reward of $500 to $150,000 for eligible discoveries.
GitHub page where source code is hosted: Mirror Protocol · GitHub

The above metrics lead to the following scores:

Ticker Honey Pot Time since launch # of SC audits Quality of SCs

Centralization Risk
Mirror is fully controlled by DAO, recently MIR governance has elected Mirror Steering Committee, but there role is only formal, and they have no control over protocol.

Centralization Risk:

Ticker Honey Pot Time since launch

Oracle Risk
I propose that we use MIR-UST LP pair from Mirror as basis for oracle, MIR-UST LP pair on mirror protocol has 39.11M, while astroport has 38.93M
Current liquidity: $39.11M

For the specific implementation of the TWAP we propose using the Mars TWAP 1 (same implementation being used on Fields) with the following parameters:

Window: 32 minutes
Tolerance: 2 minutes

Risk Parameters Suggestion

Following the methodology provided in the Red Bank Asset Listing Risk Framework 14 I propose the following risk parameters:

  • Loan-to-Value: 70%
  • Liquidation Threshold: 80%
  • Liquidation Bonus: 15%
  • Interest Rate Model: This asset will use a 2-slope (kinked) interest rate implementation with the following parameters:
  • Base Rate (interest rate at 0% utilization): 0%
  • Slope 1: 10%
  • Slope 2: 300%
  • Optimal utilization: 50%
  • Whether the asset will be usable as collateral: Yes
1 Like

thanks for creating the MRC @JonathanSmith

two issues i have with this proposal:

  1. the DEX liquidity for MIR-UST is a bit low for TWAP; it’s generally considered that $100M is required;
  2. the collateral power you’re suggesting is aggressive: 70% LTV and 80% liq. threshold. in comparison, ANC uses 40% LTV and 50% liq. threshold. this could be risky as of now when we don’t have an efficient community of liquidators.

RE point 1: Chainlink is working on an MIR feed (among others) which i expect to go live on Terra mainnet soon. would you be open to: 1) put off this MRC until the Chainlink feed is ready, and 2) use more conservative risk paramters? (which, of course, can be adjusted by governance later)

  1. When ANC has LP providing incentives they were for ANC-UST LP, the mirror has incentives but they are for all LP pairs, so MIR liquidity is spread across all mAssets, that is why it is much lower than ANC liquidity.

  2. Ok, let’s lower it to 40%, 50%, I prefer more aggressive LTV, and automatic liquidations.

Would it be possible to implement the liquidation queue similar to the one seen in Anchor? This way we could onboard the Terra community through Kujira.

Happier community + Better liquidations.

This should be made into another proposal

Kujira kujira

so we shouldn’t worry about liquidations on MARS