View source for Mycelium (MYC)

Mycelium is a [[derivatives]] protocol built on [[Arbitrum]]. The “[[Uniswap (UNI)|Uniswap]] of derivatives,” Mycelium designs [[google:tracer+dao+docs&oq=tracer+dao+docs&aqs=chrome.0.69i59.2108j0j4&sourceid=chrome&ie=UTF-8|templates]] for different types of [[On Chain|on-chain]] derivatives [[contracts]], which anyone can [[Permissionless|permissionlessly]] utilize to create a [[derivative]] for any [[token]] with a price feed.

==Basics==

*Based in:
*Started in / Announced on: [https://docs.mycelium.xyz/introduction/readme 2019]
*[[Testnet]] release:
*[[Mainnet]] release: 

==History==

* Mycelium [https://forum.arbitrum.foundation/t/aip-1-arbitrum-improvement-proposal-framework/30 were] one of the first protocols deployed on Arbitrum in 2021 and support the Arbitrum ecosystem through running validators and [[Chainlink (LINK)|Chainlink]] nodes.
*Formerly known as Tracer DAO. TracerDAO [https://www.tracer.finance/radar/perpetual-swaps/ moved into] Mycelium and adding revenue sharing to MYC token holders (6-8-2022).
*Mycelium Perpetual Swaps is a [[fork]] of the [[GMX (GMX)|GMX]] codebase but [https://mycelium-xyz.medium.com/myceliums-response-to-gmx-exploit-bad353c86081 updated] the fees, revenue mechanisms, and markets for Mycelium Perpetual Swaps as a point of difference.
*[https://twitter.com/billybobbaghold/status/1555723945168568320 From] a Tracer [[Bullish|bull]] (6-8-2022):

''"Tracer was one of the first [[on-chain]] perps protocols on Arbitrum. The founders are $[[Chainlink (LINK)|LINK]] OGs who’ve run $[[LINK]] [[Node|nodes]] since close to inception."''

==Audits & Exploits==

*Tracer's [[bug bounty]] is an [https://immunefi.com/bounty/tracer/ active program] with a highest payout of $1M (14-10-2021).
*Has been [https://yieldfarmer.substack.com/p/-farm-100-apr-via-tracer-staking?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0NDk5MDIzNSwiXyI6IkN1L0RzIiwiaWF0IjoxNjM4NzY4ODQ0LCJleHAiOjE2Mzg3NzI0NDQsImlzcyI6InB1Yi0zODQ1MSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.xdA8iL6lrcv9SO audited] (5-12-2021).
*Scored [https://docs.defisafety.com/master/tracer-finance-process-quality-review#scoring-appendix 85%] on [[DeFi Safety]] (14-10-2021):

''"Tracer underwent an [https://ipfs.io/ipfs/QmTGAU4mF4P9TFPjSBw5gwUydzF3XX1BfRdX68RnsYjvDs audit] before deployment, and all suggestions were acted upon."''

With the [https://docs.defisafety.com/finished-reviews/tracer-finance-process-quality-review#scoring-appendix comment]: ''"Tracer's commitment to strong documentation is commendable given the relatively young age of this protocol. This is a protocol that is starting out on the right foot!"''

===Bugs/Exploits===

* On January 7, 2023 multiple arbitrage bots took advantage of [https://mycelium.xyz/blog/post-mortem-of-recent-mlp-impact bad price oracle data] on Mycelium platform, which resulted in $300K losses to LPs.

==Governance==
===Admin Keys===

* [https://docs.defisafety.com/master/tracer-finance-process-quality-review#scoring-appendix From] [[DeFi Safety]] (14-10-2021):

''"[https://docs.tracer.finance/tracer/governance#tracer-dao Governance] controls the protocol.'' 

''a) All contracts are clearly labelled as upgradeable (or not) -- 30% -- the Factory [[contract]]/ market templates are labelled as upgradeable.''
''b) The type of ownership is clearly indicated (OnlyOwner / [[MultiSig]] / Defined Roles) -- 30% -- [[the DAO]] is in full control'' 
''c) The capabilities for change in the contracts are described -- 30% -- they are changed via a vote and have total control over the contract.'' 

''Pause controls are mentioned on page 24 in the [https://ipfs.io/ipfs/QmTGAU4mF4P9TFPjSBw5gwUydzF3XX1BfRdX68RnsYjvDs audit], but there is no mention of them in the documentation."''

===DAO===
===Treasury===
==Token==
===Launch===
===Token Allocation===
===Utility===

* [[Governance]] and the protocol plans ([https://newsletter.banklesshq.com/p/top-5-tokens-to-watch?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo1MjIyMDY0NywiXyI6ImR6bWdYIiwiaWF0IjoxNjUwMjUxMzc5LCJleHAiOjE2NTAyNTQ5NzksImlzcyI6InB1Yi0xNjAxNSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.ziMb6q-W3JpSxqcjY5Y5oBuYBgWW19cU4z4UbBUgidY&s=r 14-4-2022]) to transition to a vote-escrowed model in which lockers can vote on emissions to different perpetual pools.

===Other Details===
==Coin Distribution==
==Technology==

* [[Whitepaper]] or docs can be found [https://docs.mycelium.xyz/introduction/readme here].\
* Code can be viewed [https://github.com/mycelium-ethereum here]. 820 commits and 10 branches as protocol's development history (14-10-2021).

===Implementations===

*Built on: [[Arbitrum]], [[Balancer (BAL)|Balancer]] ([https://medium.com/@BalancerGrants/tracerdao-is-building-on-balancer-again-31d5aadfcc02 5-2022])

===How it works===

* From their [https://mycelium-xyz.medium.com/myceliums-response-to-gmx-exploit-bad353c86081 blog] (19-9-2022):

''"Mycelium has always been aware that the risk that pricing according to [[Centralized Exchanges (CEX)|CEX]] [[liquidity]] creates. As such, we have already implemented preventative measures to avoid this market manipulation occurring on our platform. The largest two were:''

# ''Having a bid-ask spread which was inversely correlated to CEX liquidity depth;''
# ''Having tight maxgloballongsize and maxgloballongsize parameters which prevent toxic order flow, and/or significantly reducing the profit of traders who are manipulating CEX prices."''
* [https://yieldfarmer.substack.com/p/-farm-100-apr-via-tracer-staking?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0NDk5MDIzNSwiXyI6IkN1L0RzIiwiaWF0IjoxNjM4NzY4ODQ0LCJleHAiOjE2Mzg3NzI0NDQsImlzcyI6InB1Yi0zODQ1MSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.xdA8iL6lrcv9SO From] [[DeFi Pulse|Yield Farmer]] (5-12-2021):

''"At the heart of the protocol are its “Factories.” These specialized [[Decentralized Finance (DeFi)|DeFi]] mechanisms are financial [[Smart Contract (SC)|contract]] generators that store templates. These templates can then be deployed as “Tracers,” i.e. market instances.'' 

''Notably, the project’s first Factory is its Perpetual Pools architecture. The system lets users easily create x3 long or x3 short tokens, and more leverage [[Option contracts|options]] coming in the future. These leverage tokens are unique, in that they don’t expire and can’t be liquidated. Accordingly, these assets are ideal for traders who want to access leverage albeit in passive, straightforward fashion."''

===Fees===
===Upgrades===

* [https://www.tracer.finance/radar/perpetual-swaps/ Moving into] [[Mycelium (MYC)|Mycelium]] and adding revenue sharing to MYC token holders (6-8-2022).
*[https://newsletter.banklesshq.com/p/top-5-tokens-to-watch?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo1MjIyMDY0NywiXyI6ImR6bWdYIiwiaWF0IjoxNjUwMjUxMzc5LCJleHAiOjE2NTAyNTQ5NzksImlzcyI6InB1Yi0xNjAxNSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.ziMb6q-W3JpSxqcjY5Y5oBuYBgWW19cU4z4UbBUgidY&s=r From] [[Bankless DAO (BANK)|Bankless]] (15-4-2022):

''"There are several key upgrades brought about by the launch of V2. First, it will help to minimize the volatility decay of perpetual pools, i.e. increase the length of time in which it is safe to hold a position in one. In addition, V2 will allow for the creation of custom [[Oracle|oracles]] and pools that utilize any price feed, as currently the selection of tokens that are eligible to be used to create a perpetual pool are limited to those with a [[Chainlink (LINK)|Chainlink]] price feed."''

===Staking===

* From their [https://mycelium-xyz.medium.com/myceliums-response-to-gmx-exploit-bad353c86081 blog] (23-9-2022):

''"By depositing MYC into the vault at the beginning of each 14 day cycle, MYC holders will start earning rewards over the course of the fortnight. Staked MYC in the vault will earn an interest rate. This interest rate is sourced from 10% of Perpetual Swap fees generated in the previous fortnight of trading volume that goes to the Mycelium Treasury."''

====Validator Stats====
===Liquidity Mining===

* [https://yieldfarmer.substack.com/p/-farm-100-apr-via-tracer-staking?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0NDk5MDIzNSwiXyI6IkN1L0RzIiwiaWF0IjoxNjM4NzY4ODQ0LCJleHAiOjE2Mzg3NzI0NDQsImlzcyI6InB1Yi0zODQ1MSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.xdA8iL6lrcv9SO From] [[DeFi Pulse|Yield Farmer]] (5-12-2021):

''"Right now, the Tracer project is running a [[Liquidity Mining|liquidity mining]] campaign for its TCR token. To join this program and start farming TCR, you have to [[mint]] leveraged tokens from the Perpetual Pools system and then [[Proof-of-Stake (PoS)|stake]] these tokens through Tracer.'' "

===Scaling===
===Interoperability===
===Other Details===
==Oracle Method==

* Mycelium [https://forum.arbitrum.foundation/t/aip-1-arbitrum-improvement-proposal-framework/30 were] one of the first protocols deployed on Arbitrum in 2021 and support the Arbitrum ecosystem through running validators and [[Chainlink (LINK)|Chainlink]] nodes.
* [https://newsletter.banklesshq.com/p/top-5-tokens-to-watch?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo1MjIyMDY0NywiXyI6ImR6bWdYIiwiaWF0IjoxNjUwMjUxMzc5LCJleHAiOjE2NTAyNTQ5NzksImlzcyI6InB1Yi0xNjAxNSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.ziMb6q-W3JpSxqcjY5Y5oBuYBgWW19cU4z4UbBUgidY&s=r From] [[Bankless DAO (BANK)|Bankless]] (15-4-2022):

''"V2 will allow for the creation of custom [[Oracle|oracles]] and pools that utilize any price feed, as currently the selection of tokens that are eligible to be used to create a perpetual pool are limited to those with a [[Chainlink (LINK)|Chainlink]] price feed."''
==Their Other Projects==
==Roadmap==

*Can be found [Insert [[LINK|link]] here].
*From their [https://mycelium-xyz.medium.com/myceliums-response-to-gmx-exploit-bad353c86081 blog] (19-9-2022):
''"Mycelium will be introducing additional measures and parameters to maximise the health of our protocol liquidity, and the safety of our [[Liquidity Provider (LP)|LPs]] funds. They are:''

''In the short term, we are going to do the following things:''

# ''Increase the spread on some long-tail assets to reflect existing market conditions on CEX orderbooks;''
# ''Reduce the maximum notional value size for certain long-tail assets ([[FXS]], [[Curve Finance (CRV)|CRV]], and [[Balancer (BAL)|BAL]]) for the time being;''
# ''Update the bid-ask spread on these market more frequently so that it conservatively reflects CEX liquidity on said asset;''
# ''Decrease the [[Chainlink (LINK)|chainlink]] price-binding threshold to 1.5%;''
# ''Maintain a conservative maxgloballongsize and maxgloballongsize for long-tail assets.''

''In the medium-long term, the solutions we will look to implement are as follows:''

# ''Introduce the bid-ask spread dynamic, and a function of CEX orderbook depth and/or;''
# ''Make the oracle pricing more robust via pricing it from more CEX venues (and potentially some algorithmic average of sample of CEX prices);''
# ''Make the max position size a function of CEX liquidity."''

==Usage==

* From a Balancer Grants [https://medium.com/@BalancerGrants/tracerdao-is-building-on-balancer-again-31d5aadfcc02 blog] (25-4-2022):
''"Tracer previously built on top of [[Balancer]] for their V1 release of Perpetual Pools, driving over $100m worth of volume through Balancer pools containing Tracer’s leveraged derivative tokens."''
*[https://newsletter.banklesshq.com/p/top-5-tokens-to-watch?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo1MjIyMDY0NywiXyI6ImR6bWdYIiwiaWF0IjoxNjUwMjUxMzc5LCJleHAiOjE2NTAyNTQ5NzksImlzcyI6InB1Yi0xNjAxNSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.ziMb6q-W3JpSxqcjY5Y5oBuYBgWW19cU4z4UbBUgidY&s=r From] [[Bankless DAO (BANK)|Bankless]] (15-4-2022):

''"Tracer currently holds more than [https://defillama.com/protocol/tracer $12.26] million in [[Total Value Locked (TVL)|TVL]]."''

===Projects that use or built on it===
==Competition==
==Pros and Cons==
===Pros===
===Cons===
==Team, Funding and Partners==
===Team===

*Full team can be found [https://www.afr.com/companies/financial-services/meet-the-defi-developers-who-ve-raised-funds-for-a-derivatives-system-20210628-p5850t here].
*[[Patrick McNab]] is a Co-founder of Mycelium]
*[[Ryan Sean Adams]]; disclosed himself to be an advisor ([https://docs.google.com/spreadsheets/d/16XcKXcH5e4CDc-Qek4WN4FUBPpnViAhLGgvtXat7NBg/edit?ref=bankless.ghost.io#gid=0 28-4-2023])
*[https://twitter.com/billybobbaghold/status/1555723945168568320 From] a Tracer [[Bullish|bull]] (6-8-2022):

''"The founders are $[[Chainlink (LINK)|LINK]] OGs who’ve run $LINK [[Node|nodes]] since close to inception."''

===Funding===

* From a Balancer Grants [https://medium.com/@BalancerGrants/tracerdao-is-building-on-balancer-again-31d5aadfcc02 blog] (25-4-2022):

''"This overall grant will be split into two separate grants with important deliverables in each. The first grant will be for a total of $60K USD and will [[COVER|cover]] two tranches. 1) subsidising of developer resources for deploying V2 pools as highlighted above and 2) completion of the Aggregated [[Liquidity]] features (approximately mid / late May)."''

===Partners===

* [https://twitter.com/arbitrum/status/1592910829380579328 Became] a [[Whitelist|whitelisted]] validator on [[Arbitrum]] (16-11-2022).

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