Mycelium LP

MLP

MLP is the liquidity provider token for the Mycelium protocol that allows traders to long or short crypto assets with leverage. It is composed of a basket of crypto assets including BTC, ETH and stablecoins. MLP floats freely based on the value of the underlying basket of assets and serves as the counterparty for traders' wins and losses.

Risk Rating
Best
$0.03
Summary
What we like
MLP offers a long-skewed bet on crypto with lower volatility and benefits from short-term trader losses.
What we like less
MLP holders are exposed to the price of the underlying assets which means users are impacted by volatile market movements.
What it means for you
Minting MLP allows you to earn 70% of all fees generated by the platform.
Information
Blockchain
  • Arbitrum
Key Metrics
  • Fully Diluted Valluation: $28.3K
  • Ranking inside Exponential (excluding stables): #144
  • Total Supply: 1,000,000
  • Total Supply: 1,000,000
  • Volume (24H): $31.3
  • ATH: $1.16 (10/27/2023)
  • ATL: $0.02 (02/03/2024)
Risk Assessment
Best
Asset Strength

MLP is a low-cap asset that represents the blockchain`s native currency or monetary fee used to execute transactions on the network. This asset is exposed to the underlying risks of Mycelium Perpetual Swaps and Arbitrum bridge, which are protocols rated as Watch out and Average, respectively.

Asset Tokenomics

MLP has an uncapped supply but has inflation control or burn mechanisms in place. MLP is the token received for providing liquidity to the Mycelium protocol and receives 70% of platform fees paid in ETH. MLP consists of a basket of crypto assets, including BTC, ETH and stablecoins. The price of MLP floats freely based on the value of its underlying assets. In addition, when traders on Mycelium earn a profit or loss, that amount is added to or removed from MLP as the pool represents the counterparty for those trades. MLP is essentially an index of major crypto assets, including BTC, ETH and stablecoins. Therefore, it is exposed to the price action of all the underlying assets.

Asset Volatility

MLP is moderately correlated to the overall market. MLP is essentially an index of major crypto assets, including BTC, ETH and stablecoins. Therefore, it is exposed to the price action of all the underlying assets.

Dependencies

Curve


Mycelium Perpetual Swaps


Arbitrum Bridge


Balancer


Uniswap V3


Frax


Maker

Things to know about MLP

What is MLP used for?

MLP is the Mycelium liquidity provider token that consists of a basket of crypto assets used for swaps and leverage trading. MLP can be minted with any index asset or burnt to redeem any index asset. MLP holders essentially rent out the upside of the underlying assets to traders. In exchange, MLP holders receive the majority of protocol revenue paid in ETH, as well as vested MYC rewards (esMYC).

MLP tokenomics

MLP does not have a supply cap as it can always be minted with any of the underlying assets. The basket of assets includes a mix of crypto assets (i.e. BTC, ETH) and stablecoins (i.e. USDC). Each asset has a target weight that is set by the protocol; as such, LPs are not equally exposed to all the crypto assets given the different asset weights and utilization for each asset can vary. MLP assets are those that liquidity providers (LPs) are interested in having price exposure to, and those that traders are interested in trading short-term. Therefore, the greater the asset mix, the higher the liquidity and utilization rate (trading volume) of MLP. Mycelium requires all assets to have Chainlink price feeds with high trading volume and liquidity across several exchanges. MLP rebalances passively once per week by updating asset prices to calculate new target weights. Minting and redemption fees for MLP and swap fees are dynamically adjusted to incentivize LPs and traders to push the actual asset weights towards the target weights.

How does MLP accrue value?

MLP holders earn 70% of all platform fees paid in ETH and esMYC. Mycelium charges a 0.09% fee for opening and closing positions plus a dynamic borrowing fee based on utilization rates and the underlying asset you choose to profit in. Swap fees are also dynamic and based on whether a swap improves the weights of assets in the MLP pool towards or away from the target allocations. Minting and redeeming of MLP similarly incurs a dynamic fee based on whether the selected asset is currently over or under-weight. As MLP effectively rents out crypto exposure to traders (by always taking the other side of the leverage trade), holders profit whenever traders lose money.