Mycelium (MYC)
Mycelium is a derivatives protocol built on Arbitrum. The “Uniswap of derivatives,” Mycelium designs templates for different types of on-chain derivatives contracts, which anyone can permissionlessly utilize to create a derivative for any token with a price feed.
Basics
History
- Mycelium were one of the first protocols deployed on Arbitrum in 2021 and support the Arbitrum ecosystem through running validators and Chainlink nodes.
- Formerly known as Tracer DAO. TracerDAO moved into Mycelium and adding revenue sharing to MYC token holders (6-8-2022).
- Mycelium Perpetual Swaps is a fork of the GMX codebase but updated the fees, revenue mechanisms, and markets for Mycelium Perpetual Swaps as a point of difference.
- From a Tracer bull (6-8-2022):
"Tracer was one of the first on-chain perps protocols on Arbitrum. The founders are $LINK OGs who’ve run $LINK nodes since close to inception."
Audits & Exploits
- Tracer's bug bounty is an active program with a highest payout of $1M (14-10-2021).
- Has been audited (5-12-2021).
- Scored 85% on DeFi Safety (14-10-2021):
"Tracer underwent an audit before deployment, and all suggestions were acted upon."
With the 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 bad price oracle data on Mycelium platform, which resulted in $300K losses to LPs.
Governance
Admin Keys
- From DeFi Safety (14-10-2021):
"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 audit, but there is no mention of them in the documentation."
DAO
Treasury
Token
Launch
Token Allocation
Utility
- Governance and the protocol plans (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 here.\
- Code can be viewed here. 820 commits and 10 branches as protocol's development history (14-10-2021).
Implementations
How it works
- From their blog (19-9-2022):
"Mycelium has always been aware that the risk that pricing according to 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."
- From Yield Farmer (5-12-2021):
"At the heart of the protocol are its “Factories.” These specialized DeFi mechanisms are financial 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 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
- Moving into Mycelium and adding revenue sharing to MYC token holders (6-8-2022).
- From 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 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 price feed."
Staking
- From their 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
- From Yield Farmer (5-12-2021):
"Right now, the Tracer project is running a 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 stake these tokens through Tracer. "
Scaling
Interoperability
Other Details
Oracle Method
- Mycelium were one of the first protocols deployed on Arbitrum in 2021 and support the Arbitrum ecosystem through running validators and Chainlink nodes.
- From Bankless (15-4-2022):
"V2 will allow for the creation of custom 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 price feed."
Their Other Projects
Roadmap
"Mycelium will be introducing additional measures and parameters to maximise the health of our protocol liquidity, and the safety of our 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, CRV, and 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 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 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."
"Tracer currently holds more than $12.26 million in TVL."
Projects that use or built on it
Competition
Pros and Cons
Pros
Cons
Team, Funding and Partners
Team
- Full team can be found here.
- Patrick McNab is a Co-founder of Mycelium]
- Ryan Sean Adams; disclosed himself to be an advisor (28-4-2023)
- From a Tracer bull (6-8-2022):
"The founders are $LINK OGs who’ve run $LINK nodes since close to inception."
Funding
- From a Balancer Grants 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 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
- Became a whitelisted validator on Arbitrum (16-11-2022).
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