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3. Advanced Course

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  1. 1. What is Taproot?
  2. 2. Blockchain bridges – what are they?
  3. 3. What is Ethereum Plasma?
  4. 4. What is Ethereum Casper?
  5. 5. What is Zk-SNARK and Zk-STARK? 
  6. 6. What is Selfish Mining? 
  7. 7. What is spoofing in the cryptocurrency market? 
  8. 8. Schnorr signatures - what are they? 
  9. 9. MimbleWimble - what is it? 
  10. 10. What is digital property rights in NFT?
  11. 11. What are ETFs and what role do they play in the cryptocurrency market? 
  12. 12. How to verify a cryptocurrency project – cryptocurrency tokenomics 
  13. 13. What is the 51% attack on blockchain?
  14. 14. What is DAO, and how does it work?
  15. 15. Zero-knowledge proof – a protocol that respects privacy 
  16. 16. What is EOSREX?
  17. 17. What is Proof of Elapsed Time (PoET)?
  18. 18. Mirror Protocol – what it is? 
  19. 19. What are synthetic assets? 
  20. 20. How to create your own NFT? 
  21. 21. Definition of DeFi, and what are its liquidations?
  22. 22. New identity system - Polygon ID
  23. 23. Ethereum Foundation and the Scroll protocol - what is it?
  24. 24. What is Byzantine fault tolerance in blockchain technology?
  25. 25. Scalability of blockchain technology - what is it?
  26. 26. Interchain Security - new Cosmos (ATOM) protocol
  27. 27. Coin Mixing vs. Coin Join - definition, opportunities, and threats
  28. 28. What is Ethereum Virtual Machine (EVM) and how does it work?
  29. 29. Soulbound Tokens - what are they, and how do they work?
  30. 30. Definition of LIDO - what is it?
  31. 31. What are Threshold Signatures, and how do they work?
  32. 32. Blockchain technology and cyberattacks.
  33. 33. Bitcoin script - what it is, and what you should know about it.
  34. 34. What is zkEVM, and what are its basic features?
  35. 35. Do confidential transactions on blockchain exist? What is a Confidential Transaction?
  36. 36. Algorithmic stablecoins - everything you should know about them.
  37. 37. Polygon Zk Rollups ZKP - what should you know about it?
  38. 38. What is Web3 Infura?
  39. 39. Mantle - Ethereum L2 scalability - how does it work?
  40. 40. What is the NEAR Rainbow Bridge?
  41. 41. Liquid Staking Ethereum and LSD tokens. What do you need to know about it?
  42. 42. Top 10 blockchain oracles. How do they work? How do they differ?
  43. 43. What are Web3.js and Ether.js? What are the main differences between them?
  44. 44. What is StarkWare, and recursive validity proofs
  45. 45. Quant Network: scalability of the future
  46. 46. Polygon zkEVM - everything you need to know
  47. 47. What is Optimism (OP), and how do its roll-ups work?
  48. 48. What are RPC nodes, and how do they work?
  49. 49. SEI Network: everything you need to know about the Tier 1 solution for DeFi
  50. 50. Types of Proof-of-Stake Consensus Mechanisms: DPoS, LPoS and BPoS
  51. 51. Bedrock: the epileptic curve that ensures security!
  52. 52. What is Tendermint, and how does it work?
  53. 53. Pantos: how to solve the problem of token transfer between blockchains?
  54. 54. What is asymmetric encryption?
  55. 55. Base-58 Function in Cryptocurrencies
  56. 56. What Is the Nostr Protocol and How Does It Work?
  57. 57. What Is the XDAI Bridge and How Does It Work?
  58. 58. Solidity vs. Rust: What Are the Differences Between These Programming Languages?
  59. 59. What Is a Real-Time Operating System (RTOS)?
  60. 60. What Is the Ethereum Rinkeby Testnet and How Does It Work?
  61. 61. What Is Probabilistic Encryption?
  62. 62. What is a Pinata in Web 3? We explain!
  63. 63. What Is EIP-4337? Will Ethereum Account Abstraction Change Web3 Forever?
  64. 64. What are smart contract audits? Which companies are involved?
  65. 65. How does the AirGapped wallet work?
  66. 66. What is proto-danksharding (EIP-4844) on Ethereum?
  67. 67. What is decentralised storage and how does it work?
  68. 68. How to Recover Cryptocurrencies Sent to the Wrong Address or Network: A Practical Guide
  69. 69. MPC Wallet and Multilateral Computing: Innovative Technology for Privacy and Security
  70. 70. Threshold signature in cryptography: an advanced signing technique!
  71. 71. Vanity address in cryptocurrencies: what is it and what are its characteristics?
  72. 72. Reentrancy Attack on smart contracts: a threat to blockchain security!
  73. 73. Slither: a static analyser for smart contracts!
  74. 74. Sandwich Attack at DeFi: explanation and risks!
  75. 75. Blockchain RPC for Web3: A key technology in the world of decentralized finance!
  76. 76. Re-staking: the benefits of re-posting in staking!
  77. 77. Base: Evolving cryptocurrency transactions with a tier-2 solution from Coinbase
  78. 78. IPFS: A new era of decentralized data storage
Lesson 18 of 78
In Progress

18. Mirror Protocol – what it is? 

Mirror Protocol is a decentralized financial application. It allows us to create and trade synthetic assets. These are assets with which we can replicate the value of other assets without owning them. Mirror Protocol brings together the world of traditional assets and blockchain networks in one place that is accessible to all.

Mirror Protocol is focuses on creating synthetic assets, similar to Synthetix (SNX). Such assets are often called mAssets or Mirror Assets. They are a reference to any type of asset – from gold, oil, to cryptocurrencies. The whole thing is integrated into a large market and operates in one place. Trading such assets is completely decentralized and does not require KYC verification.

The possibilities of the mirror protocol are enormous. Many people use them and operate freely between the traditional financial world and the cryptocurrency world. Everything is done quickly and in complete security.

How do mirror protocols work?

Through Mirror Protocol, we operate assets that synthesize and reflect the value of another asset. Hence, you will come across the name “mirror protocol” in the crypto world. Users can trade tokens without owning current financial assets. This allows traders from every corner of the world to actively invest on the platform. All thanks to the use of smart contracts, through which synthetic assets are created. This issue is explained below with an example:

We assume that you want to buy shares of company X. For this action, we would like to use the Mirror Protocol platform. So, we go to the platform’s website and create a new mAsset named e.g., mX. The next step is to create the necessary liquidity to make our action successful. Creating mX is the answer to the Mirror Protocol’s Overcollateralized staking, which generates a certain amount of mX for us when completed. Our mAsset needs to be Overcollateralized as this helps to avoid its sudden drop due to the high volatility of the crypto used to create it. In this way, the smart contracts involved in creating the mX help to ensure that our mX reflects the current value of X on the Nasdaq exchange. All in a completely decentralized way, of course.

Cryptocurrency investor, should pay attention to investments such as the above. Company assets admittedly don’t have large upside, but unlike cryptocurrencies, they are very stable. They provide a good return and guarantee less risk. You can see from the example above that the possibilities of the Mirror Protocol platform are huge. You can multiply such examples and do so with any company or business. This is the door to entirely new investment markets, thus – new benefits and earnings.

In itself, the project is unique. In the cryptocurrency world, you will find the opinion that Mirror Protocol is a top DeFi network. Even users of the network can earn liquidity and rewards based on participation, and the entire management system is fully decentralized and democratized.

MIR – native protocol token

The Mirror Token (MIR) is the platform’s native token. It acts as a reward system for stakers and a decision token for its holders, within the decentralized management of the protocol. It is essential for the protocol, so the developers limited the number of tokens to 370,575,000, all to achieve its revaluation. Furthermore, it is worth noting that the technical value of the Mirror Protocol does not always correspond to the market price of the MIR token. The value of MIR is often susceptible to changes and trend reversals.

At the time of writing, there are 153,540,748 MIR in circulation. As we have already mentioned, the supply of coins is limited. This makes devaluation of MIR tokens almost impossible through inflation.

It is worth remembering that the prices of mAssets correspond to the real prices of the stocks and other assets they represent. Therefore, to achieve this, Mirror Protocols uses Oracle, powered by Band Protocol from 2021. The MIR token will find its way into any stock market or portfolio. It all depends on what you want to use it for and how much you will have.

Mirror Protocol – defined roles

Even with the native token example, we can see that in the mirror protocol, each user has a well-defined role. So let’s take a look at them:

Minter

They are the creators of synthetic assets (mAssets). They are responsible for providing the necessary liquidity when generating new mAssets. Therefore, to create our mX token (let’s assume its value in the range of $3,500 per token/share).

Traders

Anyone interested in buying a particular token/share. They can be bought freely as you do not need to register on Mirror Protocol. Everything works in real time.

Liquidity Providers

Mirror protocols are DEX of the AMM type. The concepts are familiar to you from our previous lessons. So, it needs liquidity providers to generate the so-called liquidity pools necessary to create exchanges made by traders. Everything works in the same way as in other AMM DEXs. Liquidity providers are paid a commission for every trade within the pool they participate in.

Stakers

We divide them into two groups. Those who are staking LP tokens and receiving MIR tokens in return. And those who stake MIR tokens and earn commissions on CDP payouts. What are CDPs? They are responsible for allowing minters to generate mAssets within the platform.

Tendermint Delegated Proof of Stake

Tendermint Delegated Proof of Stake is a consensus mechanism that secures the Mirror protocol. It is also used by the Terra network, on which it is hosted and developed. The network is fully decentralized and owned by MIR users. Mirror Protocol is also available on Ethereum and the Binance Smart Chain. There it is secured by smart contract audits, which are carried out fairly regularly. The value of mAsset is secured by collateralization, as it is the users who must deposit the collateral, before creating synthetic assets.

Mirror Protocol story

Mirror protocols launched in 2020. Entirely created and developed by Terraform Labs. Mirror Protocol is completely decentralized and managed by MIR token holders. These tokens are mined and fairly distributed among network participants according to their role in the protocol. The main idea of the project is to enable easy entry into financial markets, while facilitating liquidity to support the creation of synthetic assets.

Summary

Mirror Protocol is a very fascinating project. It offers many possibilities. It connects the world of asset finance with the world of blockchain. Not only that, but it will definitely bring us new opportunities and attract definitely more investors. Using Mirror Protocol as an example, it is worth noting that the power of DeFi is revealed once again.

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