Conclusions

This examination of MIR airdrops has uncovered some information that will be useful in the design of future airdrops. The MIR airdrop was initially well subscribed - most of the genesis airdrop was claimed, and the claim rate was high for the couple of months of weekly airdrops. There was a significant step down in claim rate, however, which coincided with a sharp drop in the MIR/LUNA exchange rate. The claim rate has steadily decreased so a that only 2/3rds of available airdrops are claimed by eligible wallets. This appears to be correllated with the MIR/LUNA price, but it seems hard to believe that this is the only factor. With the relatively low transaction fees on the Terra network, even small claims will be cash positive. It is possible that there is a group of LUNA stakers who are simply unaware of the MIR airdrops and have not claimed as a consequence. There is currently around USD 15m of unclaimed MIR airdrops.

The analysis of the usage of MIR tokens supports the incentive design in the Mirror ecosystem. A small proportion of MIR is swapped for other assets (12-26%), which can be though of as profit-taking. The remaining MIR, however, is redeployed back into the Mirror protocol. This is done either as liquidity provision in the MIR-UST pool, or into the governance contracts. The proportions into each were similar, however for very large and very small LUNA stakers there was a significant preference towards staking in the governance contract.

Small LUNA Stakers

The graph below shows the behaviour of the smaller LUNA stakers. This group covers roughly 6000 wallets with staking balances of 100 LUNA or less. This group swaps a bit more than the large stakers (25%), and participates in governance staking at 45% - nearly as high as the large stakers.

Large LUNA Stakers

We'll now look at the same charts for large LUNA stakers. Around 160 wallets have at least 100,000 LUNA staked. The graph below shows what these users do with their MIR. We see that the swap percentage is not overly different to the cohorts shown previously (20%), but the Mirror governance staking is much larger. Around 50% of MIR from large LUNA stakers is staked back into the Mirror governance contract.

Irregular Airdrop Recipients

At the other end of the scale, we look at airdrop wallets who have received less than 5 airdrops, to see if there is a difference in behaviour. The swap behaviour is different - here only around 12% of MIR is swapped for other assets. The balance, however, is similar to the regular users with it split roughly evenly between staking and liquidity provision.

What do Aidrop Recipients do with their MIR?

Regular Airdrop Recipients

There was a small number (40) of wallets which had collected every airdrop on offer when this report was written. The chart below shows, in weekly increments, what these users do with their MIR tokens. This is shown as a percentage of the total MIR deployed, and does not include MIR held & not used. MIR tokens are either swapped for other assets, staked in the MIR-UST liquidity pool on Mirror, or staked in the Mirror governance contract. Please note that this is the usage MIR tokens from all sources by these users - it's impossible to track exact tokens as they are fungible. We see that, on aggregate, around 26% of MIR is swapped, with this percentage highly variable over time. There may be a correlation with MIR price (see chart above) but it is loose at best. The remaining MIR is split relatively evenly between staking and liquidity provision.

The next chart shows the relative pricing of MIR to LUNA. When APRs were high, 1 MIR was worth 2-3 LUNA. In Feb 2021, we saw the LUNA USD price take off from under 1 USD to over $20. The MIR price didn't perform nearly as well and now we have 1 MIR worth only 0.2 of a LUNA. The relative devaluation of the MIR token with respect to LUNA is the major factor behind the drop off in MIR Airdrop APRs for LUNA stakers, and is probably partially responsible for the low participation rate in the Airdrops at present.

Why have the APRs fallen?

As mentioned above, with constant weekly rewards (in MIR), the APR from the airdrop is driven by two factors:

• the amount of LUNA staked - higher staking dilutes the airdrop reward over more LUNA
• the relative pricing of MIR and LUNA

The first chart below shows the amount of staked LUNA by week since the airdrops began. The amount of staked LUNA has increased, but not enough to explain the dramatic change in APR we saw above. There has been a 28% increase in staked LUNA, and a >90% decrease in potential APR.

Speculation - Why aren't the Airdrops collected?

It is clear that something happened around Feb 2021 to make the collection of MIR airdrops less attractive to LUNA stakers. First for some background info - LUNA stakers either run Terra validator nodes (the proof-of-stake nodes responsible for blockchain consensus) or delegate their LUNA to someone who does. In doing this, they gain a return on this investment from the staking rewards, and from Airdrops such as the Mirror program we are investigating. The LUNA staking rewards represent a baseline return, and the MIR airdrop is additional yield on top of this. This additional yield can be calculated as the MIR airdrop value in USD divided by the amount of staked LUNA in USD. This weekly number is then annualised to give an APR (annualised percentage return). The additional APR from the MIR airdrops only for LUNA stakers has been plotted below - both the maximum theoretical APR and the achieved APR - aggregated for all of the LUNA stakers. For an individual wallet, the APR will either be the maximum (if claimed) or zero if not claimed.

The APRs started out very healthy - over 10% on offer and as high as 18%. This was the period where most MIR was claimed. In Feb 2021 however, the APR takes a dive - down to 5% then creeping ever lower to bounce around 3%. Here is where people have lost interest - perhaps these measly rewards aren't worth the time to claim? An alternative theory is that a large number of users simply don't know there are MIR rewards on offer when they stake LUNA.

How much is on the table?

The table below shows, for the Genesis and weekly airdrops, and in total:

• How much MIR can be claimed (max claim)
• How much has been claimed (airdrop claimed)
• How much has not been claimed (airdrop unclaimed)
• The percentage claimed
• The USD value of the unclaimed MIR, at current prices

There is USD 15m of unclaimed MIR airdrops waiting to be collected! Rough calculations indicate this is around 2.5% of the MIR supply on the Terra network.

Number of Stakers Claiming

The table below shows the number of wallets which had a positive balance of staked LUNA at some point since the Genesis airdrop, and how many of them have claimed at least one airdrop. It shows that less than half (45%) have claimed the airdrop. This is surprising - more than half of the wallets entitled to free MIR are choosing not to claim it.

Percentage of Airdrops Claimed

The graphs above suggest that the airdrops claimed are:

• Not the full amount which has been allocated and
• Are declining over time

This is curious - there is nothing more for users to do than to go to the claim page, pay a small transaction fee and collect their MIR tokens. Let's examine the proportion of MIR which has been claimed from each airdrop allocation. The graph below shows the percentage claimed & unclaimed for each weekly tranche, including the Genesis airdrop at the beginning. As can be seen, the uptake of the Genesis airdrop was very high - over 97% was claimed. The weekly airdrops were popular for a number of months, with over 90% participation in the program. There was a significant dropoff in Feb 2021 however, and this has led to an ongoing slide in airdrop claims. Most recently, barely one third of airdrops are being claimed by users.

Mirror Airdrops - How do they Work?

The two MIR token airdrops on the Terra network were:

• The Genesis Airdrop - 9.15m MIR tokens distributed LUNA stakers proportionately by the amount of LUNA staked. The snapshot for this airdrop was taken on 23rd November 2020, and the airdrop went live on the 3rd of December 2020 with the Mirror Protocol launch.
• The Weekly Airdrop - 18.3m MIR tokens were scheduled to be distributed to LUNA stakers in the first year of the Mirror Protocol. This commenced in the week after the Genesis Airdrop, with snapshots of LUNA stakers taken at every 100,000 blocks (approximately 1 week). The tokens are again distributed proportionately based on the staked amount. There are 345,283 distributed each week - 18.3m over 53 weeks.

Airdrops Claimed

LUNA stakers don't automatically get the airdrops - they have to claim them manually at https://terra.mirror.finance/airdrop. Let's examine the amount of MIR claimed by LUNA stakers since the Airdrops began in the chart below. The chart displays the amount of MIR claimed by date, where the date is when the snapshot for that airdrop was taken. Users can (and often do) claim at any time after they qualify for the airdrop. The obvious standout here is the Genesis Airdrop event - almost 9m MIR claimed from this event, out of a possible maximum of 9.15m. After this event, the amount claimed was steady at >300k MIR for a period, but recently has dropped away to just over 100k MIR. The next graph shows this in better detail - it's the same graph with the Genesis airdrop removed.

Mirror Airdrops

Mirror Protocol runs on the Terra blockchain and provides synthetic assets with price exposure to real-world assets. Mirror launched in December 2020, and with it debuted the MIR token. The MIR token was airdropped on Ethereum to UNI token holders, and to LUNA stakers on the Terra blockchain. MIR distribution continues with weekly airdrops to LUNA stakers, and as staking rewards to liquidity providers on the Mirror network. There was also a distribution to the Terra Community Pool.

This dashboard will explore the MIR airdrops, looking at:

• Airdrop claims history
• User claims behaviour, with potential reasons behind this
• Usage of MIR tokens by Airdrop Recipients