Concept

A category of crypto tokens that, as a blockchain token, reacts like a “mirror” version of real-world assets (RWAs) by reflecting the exchange prices on-chain (via a blockchain as distributed ledger). Mirrored assets give the traders a price exposure to a real asset while enabling the digital asset (that will be created or duplicated) to reflect the value or characteristics of the real asset.

A mirrored asset describes an investment or position that reflects the performance of another asset, such as stock, commodity, or a portfolio/ index. Additionally, mirrored assets may also involve using derivative products, tradable vehicles (e.g., exchange-traded funds (ETFs)) or synthetic securities, aiming to imitate the price movement of the underlying real asset.

Furthermore, a mirrored asset, as a digital or blockchain-based asset, refers to a token or digital representation of an underlying asset/ a physical asset or a cryptocurrency that represents or captures the value or ownership of the original item. The connection enables easier transfer or trading in the digital space. For example, a mirrored version of Bitcoin might be created and operated on another blockchain (e.g., Ethereum) as a token that reflects the value of Bitcoin but operates within that blockchain’s ecosystem for decentralized finance (DeFi) applications.

Connection with mirror protocol

Mirrored assets reply on the so-called mirror protocol that allows for the minting of synthetic asset tokens on a blockchain. To mint a mirrored asset, a user must post a form of collateral (a real-world asset) to the protocol. This process is meant to create a kind of overcollateralized position.

The vision of mirror is to allow unrestricted access to markets, virtually anywhere in the globe, thanks to the decentralized nature of the protocol. Mirror investors can freely access the protocol by both web and mobile applications. Involvement with these assets allow users to take part in the value-creation process that is commonplace in real financial markets.

Synonyms

A mirrored asset is often abbreviated for an mAsset. It may also be referred to as a synthetic asset traded on mirror.