Yesterday I discussed briefly about Terra's blockchain Anchor protocol and today I would like to stack up the potential earnings with Terra's Mirror protocol.
https://mirrorprotocol.app/#/trade
Anchor's UST versus aUST
Let us hit the ground running on how we can leverage Mirror protocol on top of Anchor. When we invest UST into Anchor for the near 20% interest there is a receipt of UST we get out of anchor. This recipt is a token called aUST.
On Anchor 1 aUST is worth a little more than 1 UST because aUST is the staked version of UST within Anchor that is earning the near 20% interest. What is important to observe here is when you put UST into Anchor for the 20% interest you can aUST. The aUST is what we will use in Mirror Protocol.
Mirror Protocol
On Mirror users can invest in synthetic tokens that follow the actual prices of stocks traded in real markets. These tokens do not hold any value by itself but do track the price of the stock ticker that is traded. The goal of this post is to identify the opportunity we have at using Mirror protocol on top of Anchor but not in detail as what is best to invest. This is to keep the post simple to understand.
So under borrow tab in Mirror users can borrow synthetic tokens by giving a collateral. Remember in Anchor users can provide collateral bLuna to borrow? Similarly on Mirror users can borrow synthetic tokens by providing aUST as collateral. Yes aUST that was received for investing in Anchor can be applied to Mirror to obtain synthetic tokens.
Borrowing the tokens users can earn interest for just holding the synthetic tokens. The interest is collected as MIR tokens which is the native token of Mirror is under $2.40 as of this post.
In order to collect MIR interest the holder of the synthetic tokens would need to put the tokens in farm, either short or long has a specific interest rate. When we are borrowing the shares we are technically short the stock so under the short column it is the amount of % interest we would earn in MIR tokens for holding the synthetic tokens. These interest is based on annual rate.
Conclusions
It may look complicated to see how the Mirror Protocol is earth shattering, but it is. Basically understand that the staked asset in Anchor can also be used to earn additional income on Mirror is something unheard of. Repeating again staked assets can be staked again to earn even more. Like you put money in a bank but still be able to use the money!
The short of it is use Anchor protocol and put UST to earn the 20% interest. Anchor provides aUST that you then put in to use as collateral on Mirror to earn interest for holding short synthetic tokens. The interest earned on Anchor is in UST while the interest earned on Mirror is native token MIR. Over the course of time users can sell MIR to obtain more UST and combine the earned UST in Anchor to invest more into Anchor to obtain even more aUST and reinvest that into Mirror. This is like earn 2 play kind of approach. Something totally different from what we are use to in play 2 earn crypto games. Terra blockchain has much to offer and if we use leverage appropriately we can obtain larger passive income than any other blockchain to date.
In future posts I hope to show examples to how to get all of these protocols work and continue discussing other opportunities within the Terra Blockchain. There are currently around 13 active Terra protocols but growing very rapidly. Each one has its unique problems to solve and ways for users to earn.
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
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