Sushi as the new home for Mirror.finance liquidity?

Hey frens,

Today Uniswap announced that they are delisting mirror.fiance’s massets from uniswaps interface.

This is understandable but a bit unfriendly towards mirror.

Our community is wondering , would sushi embrace mirror protocol? Would sushi partner up with us in a push to move our 500m+ in liquidity over to sushiswap? Would you support us on the default token list?

Could be some good publicity for sushi, would love to get some general sentiment on this and i will make a governance proposal to our community.

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Seems like a high risk, low reward move when the Sushi team is looking to build legitimacy, scale the business and engage with the tradfi world.

Why?

Uniswap almost surely delisted the mirrored assets because the Chairman of the SEC recently stated that he considers “mirrored stocks” to be financial products that are regulated by the SEC (securities-based-swaps) – and this has a lot of implications for Uniswap (and Sushi).

For example:

  • Is Uniswap now a swap execution facility? Or is it a securities exchange?
  • What about anyone making a market in mirrored stocks? Are they regulated in anyway?
  • How about anyone financing the purchase of a mirrored stock? Or letting you lend a mirrored stock? Are they regulated in any way?

Because the answer to at least some of these questions is probably yes, Uniswap delisted the tokens.

Now what will happen if Sushi decides to list them?

  • Sushi will be taking a legal risk that Uniswap found unacceptable

  • Sushi will be actively choosing to START TAKING this risk AFTER Uniswap decided the risk was unacceptable

  • Sushi will be standing alone

This is not the sort of positioning a top tier project usually wants to have when facing a powerful regulator. Or when trying to scale its business. Or when looking to build credibility with tradfi partners.

Here’s the background on Uniswap’s action:

https://www.bloomberg.com/news/articles/2021-07-21/sec-s-gensler-issues-warning-as-fake-stocks-bloom-on-blockchains

https://www.sec.gov/news/speech/gensler-remarks-aba-derivatives-futures-law-committee-virtual-mid-year-program-072121

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“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.”

“synthetic exposure to underlying securities” seems to imply that these tokenized stocks are backed by underlying securities . Where as in the case of mirror , mirrored assets are minted using UST (stable coin) collateral. No securities are used to collateralize these assets.

The entity that runs uniswaps web interfaced is centralized and based in the US. This is a problem all of Defi needs to solve.

While i agree there is some risk based on the unclear nature of where regulations will go , if there isnt a target for regulations to go after i dont think they will be able to take much action. With your logic i would say the biggest risk to sushi right now is listing USDT as essentially USDT is a money market token where 1 USDT is equal to the value of tethers underlying assets .Mirror is completely decentralized with no real world assets backing it’s synths, only decentralized stable coins.

While i agree there is some risk based on the unclear nature of where regulations will go , if there isnt a target for regulations to go after i dont think they will be able to take much action.

^^^ Of course there’s are targets here! The most obvious is Joseph Delong, an American who potentially led some of the efforts to develop Sushi while in the US.

Likewise, good luck partnering with a gaming company, fintech or tradfi institution if you take this positioning. You will never pass their compliance checklist

With your logic i would say the biggest risk to sushi right now is listing USDT as essentially USDT is a money market token where 1 USDT is equal to the value of tethers underlying assets .Mirror is completely decentralized with no real world assets backing it’s synths, only decentralized stable coins.

Mirror is very clearly offers a 'virtual product that provides synthetic exposure to underlying securities" (stocks). This creates risk for Sushi. What collateral backs up the synthetic payments doesn’t matter.

define “underlying securities”, i think this is clear as mud. But im not here to argue with you. I am one of many community members that use mirror.

The protocol is trustless and exists on the blockchain what kind of ownership does Joseph Delong have over the protocol that would make him a target?

My point is USDT is much more of a concern from a regulatory perspective compared to mirrored assets which are not backed by real world securities.

welcome to sushiswap :sushi:, I think you gonna like masterchef v2 and ONSEN

Also with trident coming, it can be a good move for the mirror community.

win-win :handshake:

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Damn, when did the DeFi goals change from “decentralized, permissionless, trustless” to “SEC regulated, tradfi engaging, scaling the business”? Instead of trying to meet SEC or any other government regulations, shouldn’t we aim at making Sushiswap untouchable by those regulators? … May be I am too naive, may be I don’t see “the big picture” and where the “big money is”, but I believe that most of the Sushiswap community still value the initial DeFi principals and will welcome Mirror.finance.

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Doesn’t matter what you or I think or how we would like things to be.

Matters what the SEC and US courts thinks. And it matters what the partners Sushi needs to grow its business think.