Mirror Token (MIR)

The Mirror Token (MIR) is Mirror Protocol's governance token. Currently, it must be staked to vote on active polls and is required as a deposit for making new governance polls. In future iterations of Mirror, it will serve further purposes for the protocol that increase its utility and value.

Users that stake MIR tokens also earn MIR rewards generated from withdrawing collateral from CDP positions within the protocol.

MIR is also used to incentivize users to farm yields by staking LP tokens which were minted by providing liquidity for MIR and mAssets. Yield is paid to the users from MIRs that are newly minted through annual inflation, which gradually increases the total supply of MIR until the end of 4th year.

Mirror Token Supply

There are planned to be a total of 370,575,000 MIR tokens to be distributed over 4 years. Beyond that, there will be no more new MIR tokens introduced to the supply.

Cumulative Distribution Schedule (in millions)

Genesis

Y1

Y2

Y3

Y4

UNI airdrop

9.15

9.15

9.15

9.15

9.15

Luna staking airdrop

9.15

9.15

9.15

9.15

9.15

Luna staking reward

0

18.3

18.3

18.3

18.3

mAsset LP staking

0

89.2125

133.81875

156.121875

167.2734375

MIR LP staking

0

20.5875

30.88125

36.028125

38.6015625

Community pool

36.6

36.6

54.9

91.5

128.1

Token supply

54.90

183.00

256.20

320.25

370.575

Annual inflation (%)

-

233.33%

40.00%

25.00%

15.71%

Total of 54.9M tokens are available at genesis of Mirror Protocol. The distribution of these tokens will be made as below:

  • UNI Airdrop: 16.66% (9.15M) tokens will be airdropped to UNI holders

  • LUNA staker airdrop: 16.66% (9.15M) tokens will be airdropped to LUNA stakers.

  • Community Pool: 66.66% (36.6M) tokens will be allocated to community pool.

Total supply of MIR tokens will increase for 4 years due to inflation, until the total token supply becomes 370.575M.

The distribution structure at the end of year 4 will look like the below:

  • Airdrop: The airdrop amount which was originally distributed to UNI holders and LUNA stakers will now account for 4.9% (18.3M) of the total token supply.

  • LUNA staking reward: 4.9% (18.3M) will be distributed to LUNA stakers throughout the first year since the launching of Mirror Protocol. MIR will be distributed every 100,000 blocks (approximately once every week) to Luna stakers only on the first year, starting from block height 920,000. Snapshot will be taken every 100,000 blocks to determine who is eligible for the staking reward distribution.

  • mAsset LP Staking: 45.1% (167.27M) tokens are distributed to all mAsset and mAsset (mETH) staking pools by the end of year 4. Tokens are distributed daily to each staking pool (initially 13 pairs for each Mirror and mETH) based on their weight compared to other assets.

  • MIR LP Staking: 10.4% (38.6M) tokens are evenly distributed to MIR-UST and MIR-UST (mETH) staking pools by the end of year 4. MIR-UST pair has an initial weight of 300, which is greater than weight of mAssets (First batch of mAssets have 100, and whitelisted mAssets have 30 weight).

  • Community Pool: 34.6% (128.1M) of total MIR supply will be distributed to Community Pool by the end of year 4.

Distribution Rate (Inflation)

Inflation rate of MIR tokens are designed to gradually decrease every year until it reaches 370.575M at the end of year 4. After the end of year 4, no more MIR tokens will be minted through inflation.

MIR Staking Rewards

This section discusses staking rewards for MIR tokens, which come from trading fees used to buy back MIR from the market. Staking LP and sLP tokens also generate MIR rewards, which come directly from new MIR tokens created every block. Learn more about it here.

From Protocol Fees

MIR Token stakers receive MIR token rewards every block which protocol fees are generated from CDP withdrawals. The protocol fees are collected from CDP collateral and are sold for TerraUSD to buy MIR through Terraswap after being sent to the Collector contract. The MIR tokens are then distributed as rewards to MIR stakers and voters in proportion to the percentage of total stake. This process balances the generation of new MIR by creating buying pressure.

From Poll Creation Fees

Whenever a new governance poll is created, an initial deposit of MIR tokens must be paid. If the poll does not reach the voting quorum, this deposit is distributed to all MIR stakers proportionately.

From Voting Rewards

From protocol fee and poll creation fees from polls that have not reached voting quorum, voter_weight is used to determine the amount of MIR tokens that are distributed among users who voted on on-going polls. If total MIR governance reward which includes both staking and voting rewards is RtotalR_{\text{total}} is,

Rpassive+RvoteR_{\text{passive}}+R_{\text{vote}}

where RpassiveR_{\text{passive}}is the reward for MIR stakers that did not vote, and RvoteR_{\text{vote}}is the reward for users that have voted on on-going polls. If voter_weight is WvoteW_{\text{vote}}, and each individual and total number of MIR voted for the iith poll are mim_{\text{i}} and MiM_{\text{i}},the voting reward RvoteR_{\text{vote}} is,

i=1nmiMiWvoteRgovn\sum_{i=1}^n \frac{m_{\text{i}}}{M_{\text{i}}} \frac{W_{\text{vote}}{R_{\text{gov}}}}{n}

APR Calculation

Note Since protocol fees for most mAssets are only generated during trading hours of their underlying real-world asset, the actual reward distributed over the weekends and holidays will be much lower.

Mirror Web App displays the annual percentage rate for MIR staking reward. Due to fluctuating nature of protocol fees, MIR staking APR calculation uses the average reward per day from the last 15 days.

If reward for MIR staker on day ii is rir_i, with total MIR staked amount is MM, annualized percentage rate for MIR staking (365 days) would be,

i=115miM×365\frac{\sum_{i=1}^{15}m_i}{M}\times365

where reward distribution information of the last 15 days is applied. This APR is calculated under the assumption that the users have voted on all on-going governance proposals.