Mycelium is a decentralized derivatives protocol, formerly known as Tracer DAO. It is deployed on the Arbitrum and Rinkeby networks. Mycelium primarily supports perpetual contract trading, which offers up to 50x leverage trading.
Since 2019, Mycelium has developed expertise and recognition in the industry as a trusted market leader leveraging blockchain technology to make financial markets more efficient. It aims to build a financial market infrastructure on public blockchains that are open, transparent, and accessible to all. It specializes in data provision via the Mycelium Node, and derivatives exchange infrastructure (formerly known as Tracer DAO).
Mycelium has two premier financial products. They are:
- Mycelium Perpetual Pools
- Mycelium Perpetual Swaps
Perpetual Pools
The initial product launched by Mycelium was the Perpetual Pool. Its core mechanism is the use of two pools (Long Pool and Short Pool) and the rebalancing rate to realize the "never-burst" perpetual contract trading.
In the Perpetual Pool, opening position means minting assets, where the user can mint 1L-ETH/USD (Long) or 1S-ETH/USD (Short) in either the long or short pool by collateral $USDC. On the contrary, closing position means burning assets. The difference between the asset price at the time of minting and burning is equal to the user's loss or gain. The ratio of assets in the long pool to the short pool reflects the user's choice of future price direction movements. For example, if there are more assets in the long pool, it means that more people are long and more assets are minted in the long pool, and vice versa. The rebalancing rate, on the other hand, is similar to the funding rate in Perpetual Protocol's vAMM mechanism. It is used to balance the ratio between the two pools (bringing the long-short ratio back to 1:1). In general, the Perpetual Pool is similar to Perpetual Protocol's vAMM mechanism, with a certain price discovery function and a rebalancing rate similar to the funding rate to balance the long-short ratio. The biggest difference is that the Perpetual Pool has real liquidity.
Perpetual Swaps
After changing its name to Mycelium, Mycelium launched a new product in August 2022, Perpetual Swaps, which has a similar mechanism to GMX. It introduces an MLP liquidity pool (like GMX's GLP pool) as a counterparty to traders and provides liquidity to trades.
In terms of trading fees, Mycelium charges 9 bps to open and close a position, and, similar to GMX, traders pay a Borrow fee of 0.5 bps per hour to the MLP pool. 70% of the trading fee is distributed to the MLP liquidity provider and 25% to Mycelium Treasury.
MYC will act as a governance and utility token for Mycelium’s range of on-chain offerings. MYC holders will have rights to:
- Discounts on trading using Mycelium;
- MYC rewards for participation in the exchange, protocol mechanisms (such as voting), and other community contributions;
- Access exclusive Mycelium products; and
- Govern the deployment of products and product parameters.
