Mirror Enables Trust Wallet Users to Buy Synthetic Stocks on Binance Smart Chain
Discover how you can buy synthetic stocks on Binance Smart Chain using Trust Wallet.
The DeFi protocol Mirror has recently completed the integration of a cross-chain bridge to Binance Smart Chain (BSC) to enable investors to buy synthetic stocks on Binance’s new smart contract-enabled blockchain. Thanks to Mirror, Binance Smart Chain users can now gain access to a range of leading US stocks in the form of digital tokens.
Learn what Mirror is, how you can buy synthetic stocks on BSC, and why this announcement is a big deal for the Binance community.
Mirror, Mirror on the Wall, Who Brought Synthetic Stocks to BSC?
In a press release published on January 21, Mirror announced that it is bringing its synthetic “mAssets” to Binance Smart Chain, enabling investors to leverage Binance’s new high-throughput blockchain to invest in digital tokens representing leading stocks, such as Amazon, Apple, and Google.
Using the cross-chain bridge Terra Shuttle, Mirror is able to port assets from the Terra blockchain onto other blockchain networks, such as Ethereum and Binance Smart Chain.
Binance Smart Chain is a smart contract-enabled parallel chain to Binance Chain that was launched in September 2020 to bring DeFi and Web 3.0 to the Binance Community. With its EVM-compatibility, five-second block time, and minimal transaction fees, BSC has emerged as one of the leading alternatives to Ethereum for the burgeoning DeFi market.
“We’re thrilled to extend access to Mirror’s synthetic assets to the Binance Smart Chain community. The exposure to mAssets via a cross-chain bridge is a powerful avenue for increasing composability and liquidity across blockchain networks.“ – Terraform Labs Co-Founder & CEO, Do Kwon.
The new cross-chain bridge to Binance Smart Chain enables Mirror to port Terra’s stablecoin UST, its native token LUNA, the governance token MIR, and a range of mAssets to BSC.
Terra Shuttle, Terra’s cross-chain bridge, allows Mirror is able to port assets from the Terra blockchain onto other blockchain networks, such as Ethereum and Binance Smart Chain.
The first mAssets to list on PancakeSwap will be the major tech stocks Tesla, Amazon, Netflix, and Google. On StableXSwap, UST will be listed against BUSD using the platform, according to the company’s press release. Liquidity mining rewards will come in the form of Terra’s native token, LUNA, in the coming weeks.
“We welcome the BSC community to Mirror’s community-governed protocol as the next major step in Mirror’s mission to bring synthetic asset exposure to the world,” Kwon added.
What are Synthetic Stocks?
Synthetic stocks are digital tokens representing shares in a publicly-traded company but without providing any of the rights that come with share ownership.
Instead, synthetic stocks enable investors across the globe to gain exposure to the price movement of Apple’s stock without having to register with an online broker.
Synthetic stocks are one of the many ways that blockchain technology and digital assets are democratizing the investment process, providing access to the global stock market to anyone with an internet connection and a crypto wallet.
For example, a Binance Smart Chain user in the Philippines could gain investment exposure to leading US stocks Amazon, Tesla, and Google by purchasing mAMZN, mTSLA, and mGOOGL tokens on the automated market-making protocol, PancakeSwap.
Without synthetic assets, it would be incredibly difficult, if not impossible to gain exposure to US stocks in the Philippines.
Unlike the actual stock market, the market for synthetic stocks on the blockchain is decentralized, global, permissionless, accessible, and open for 24 hours, 7 days a week.
How Mirror Makes Synthetic Stocks Possible
When an issuer wants to mint an mAsset, they have to “lock up” 150% < of the asset’s value in Terra stablecoins or existing mAssets as collateral. If the value of the asset exceeds the collateralization threshold, the asset’s collateral is liquidated to ensure the solvency of the system
The prices of mAssets are provided by decentralized price oracles that update every 30 seconds. When an mAsset’s price drifts significantly from the primary market, investors are incentivized to purchase or sell the asset to then mint or burn it to claim the collateral.
To burn a synthetic mAsset, the issuer has to burn the equivalent amount of mAssets that was issued when the CDP was opened. Then, the collateral is returned to the issuer.
While this process may sound very technical (because it is), a retail investor looking to gain tokenized exposure to US stocks really only needs to focus on when to buy an mAsset and when to sell it.
Since mAssets track the stock price of their “underlying” asset, they can be seen as the same as holding the actual stock.
How to Buy Synthetic Stocks on Using Trust Wallet
Arguably the easiest way to buy synthetic stocks — in the form of mAssets on Binance Smart Chain — is using Trust Wallet. Using the Trust Wallet’s mobile DApp Browser, you can access the PancakeSwap protocol directly on your phone.
Once you have opened PancakeSwap in the DApp Browser, you need to click on “Trade” and then “Exchange” to see the listed set of mAssets. At the time of writing, Binance Smart Chain users can purchase synthetic stocks in Amazon, Google, Netflix, and Tesla.
To buy mGOOGL, for example, you choose the asset you want to sell to buy mGOOGL and then you confirm the transaction. In our example, we are selling 100 BUSD for 0.022047 mGOOGL.
Once you are happy with the terms of your trade, confirm the transaction by signing it using Trust Wallet.
You will then find your synthetic stocks securely stored in Trust Wallet.
And that’s it!
That’s how easy you can become an investor in US stocks regardless of where in the world you are located and how small your investable capital may be.
In addition to holding mAssets as investments, they can also be deployed to earn yield in Binance Smart Chain’s DeFi ecosystem by acting as collateral in lending protocols or used in liquidity pools on yield farming platforms.
For example, you could use your mGOOGL token to provide liquidity on PancakeSwap to the trading pool mGOOGL-UST to earn liquidity provider fees. Additionally, you can then deposit your mGOOGL-UST LP token into a Vault on the leading DeFi protocol Beefy.Finance to earn 500%+ yield, at the time of writing.