Mycelium (previously Tracer) is a decentralized perpetuals protocol that specializes in blockchain data and derivatives. Mycelium Perpetual Pools is a tool for making leveraged tokens.

Derivatives

Mycelium Perpetual Pools

Protocol Code Quality

Protocol Maturity

Protocol Design

Risk Rating

yellow

Average

* [Documentation](https://pools.docs.mycelium.xyz/perpetual-pools/readme) 
 * Auditors 
 	* [code4rena](https://docs.tracer.finance/security/audits-and-security) 
 	* [Audits](https://tracer.finance/radar/sigma-prime-audit-response) 
 * Please see our [FAQ on experienced auditors](https://help.exponential.fi/en/articles/6381015-what-are-experienced-auditors)

Exploit/Hacks

green

None

* [Website](https://pools.mycelium.xyz/)  
 * Token: MYC  
 * Tags: Derivatives

Info

* TVL: $589.1K (Rank #151)  
 * TVL Ranking by Derivatives: #8  
 * Blockchain: Arbitrum  
 * Chain TVL  
 	* Arbitrum: $589.07K

Key Metrics

Information


- Code reviewed by at least one experienced auditor; [code4rena](https://docs.tracer.finance/security/audits-and-security) audited in October 2021
- Public team promotes accountability
- No documented protocol hacks since launch
- Robust controls to mitigate oracle price manipulation


- Core protocol launched in 2022; maturity less than a year increases technical risk as smart contracts are less battle-tested
- Bottom 80% by total value locked increases risk
- Decentralized governance increases transparency
- At least one critical governance issue documented
- Low voting power concentration reduces risk


- No concerns identified
- Tracer tokenizes perpetual contracts to help investors access leverage without margin calls; each of Tracer's assets can be thought of as a share of a leveraged mutual fund, and the token is valued at Net Asset Value

Risk Assessment

Mycelium strives to democratize access to derivatives products so that risk management tools can be used by everyday people.

What we like

The team still has control with only a 3/5 multisig and the native protocol token has limited usage beyond governance.

What we like less

Offers you a simple way to buy and sell leveraged tokens that are non-liquidatable, fully collateralized, and fully fungible.

What it means for you

Summary

#### How Mycelium works
Mycelium (formerly known as Tracer) is building an ecosystem of derivatives products that is open-source and permissionless. The first product introduced is Perpetual Pools, a new derivative primitive developed by Myeclium on behalf of Tracer. Perpetual Pools enable anyone to take a short or long position on any underlying asset. They are smart contracts that facilitates the transfer of value between long and short sides of a collateral pool, based on an underlying price feed. The value transfer is determined by the sigmoid leverage function which acts as a rebalancing mechanism (similar to how a funding rate is used in perpetual swaps). These positions are non-liquidatable, fully collateralized, fully fungible, and can exist perpetually without any upkeep required. User can take a position by depositing collateral into either the long or short side of a pool to mint fungible ERC-20 tokens that represent ownership of the pool assets. The amount of leverage desired differs by pool and is also displayed in the minted token. The value of these leverage tokens is determined by the proportion of collateral held in each side of the pool. Tracer will periodically transfer value from one side to another to mimic leveraged exposure. Tracer recently merged its platform with Mycelium to further expand its exchange platform and develop new products like Perpetual Swaps, which is a fork of GMX.
#### How Mycelium makes money
The protocol charges several fees for its Perpetual Pools products. A mint fee is take from a user's balance at entry. The funds are added to the corresponding side of hte pool (e.g. long mint fees are added to the long pool and short mint fees are added to the short pool). This fee is determined by the creator of the pool and can be set to anywhere from 0-100%. The management fee is collected on the aggregate balance of the pools at rebalance, and is set to 0-10% per year. A burn fee is subtracted from the total withdrawal amount of the user and redistributed back to the pool the user is burning from, and is set by the pool creator between 0-10%. For Perpetual Swaps, Mycelium charges an entry and exit fee of 0.03% of the trader's notional value. The fees are swapped to ETH before being sent to the fee pool. The protocol receives 20% of this revenue as 10% is used to buyback MYC and 10% is distributed to the Mycelium treasury.
#### How you make money on Mycelium
You can make money by placing directionally levered bets on the crypto market. If you have a more long-term view, you can earn a portion of all protocol generated revenues from staking the Mycelium liquidity provider token (MLP). The fee split is currently 70% paid to MLP stakers. 10% to trader rewards pool, 10% to buyback MYC, and 10% to the Mycelium treasury. Top 50% of traders also receive 10% of the platform's generated fees as a rebate to incentivize more trading on the platform.