Continuum vs Mirror Protocol: Learning from the Past
How Continuum improves on the Terra-era synthetic model
A comparison of Continuum's design with the now-defunct Mirror Protocol, explaining key improvements and lessons learned.
Continuum
SolanaPaired L/S Token Protocol
Pros
- Stablecoin collateral avoids death spiral risk
- 100% collateralization at all times
- No complex liquidation mechanics
- Battle-tested oracle infrastructure
Cons
- Stablecoins have some centralization risk
- Newer protocol, less proven
- Smaller initial ecosystem
Mirror Protocol (Defunct)
Terra (Defunct)CDP-based Synthetics
Pros
- Was innovative for its time
- Large asset selection
- Strong community initially
- Good UX for minting
Cons
- Collapsed with Terra ecosystem
- Algorithmic collateral failed
- Liquidation cascades amplified crash
Our Verdict
Continuum learned from Mirror's failure by using stable external collateral (stablecoins), eliminating liquidation mechanics, and deploying on a proven chain. The paired L/S model prevents imbalances that plagued Mirror.
Which Should You Use?
Risk-aware synthetic trading
ContinuumDesigned specifically to avoid Mirror's failure modes
Learning from DeFi history
Study Mirror's collapseUnderstanding what went wrong helps evaluate new protocols
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