Read time: 5 minutesApril 5, 2022

Minting and Burning Pool Tokens Guide

A step-by-step on minting and burning tokens using the Perpetual Pools V2 interface. Minting and Burning Pool Tokens Guide

EDITS: The following guide has been updated to reflect the changes live on the Perpetual Pools V2 interface.

Overview

Hello and welcome to our step-by-step on Mycelium's Perpetual Pools interface! We're going to walk you through the process of minting and burning pool tokens with this guide.

Gaining access to non-liquidatable, tokenised leverage is no longer a pain point for DeFi users thanks to Mycelium's Perpetual Pools: a product that allows you to trade fully-fungible positions, which means you can seamlessly interact with and sustain your leveraged exposure within the DeFi economy. It's simple, straightforward and we'll support you with every step.

Now let's get you started with minting your first token.

Minting Pool Tokens

Step 1: Browse

Head to Perpetual Pools and browse the tokens available. You'll be able to see long and short tokens for the BTC, ETH and LINK with leverages of 3, 5 and 7. Take note of the effective leverage as this will influence your returns.

Interface 1

*The Price and Effective Leverage displayed are indicative only. The values displayed are estimated values for the next rebalance period, based on existing information including queued mints and burns and the estimated value transfer. The actual Price and Effective Leverage will be calculated at the time of the next rebalance.

Step 2: Trade

Select 'Trade' to get started minting your pool tokens. The following window will appear:

Interface 2

Step 3: Select Token to Mint

The window will default to the Mint action, and the default displayed token will be reflective of which Mint Trade you selected. You can adjust which token you are going to mint using the drop down box. You will see a variety of options including a 5L-ETH/USD token.

This token ticker is used to represent a 5x Long Position on the ETH price denominated in USD.

The meaning behind each element of the token ticker is explained below:

Leverage

The number at the beginning of the token ticker represents the leverage ratio of that token. The leverage options available are 3, 5 and 7. For a price move of 2% in the underlying the 7 leverage market will experience a move of approximately 14%.

Long or Short

The ‘L’ or ‘S’ in the token ticker represents whether the token has Long or Short side exposure respectively. Long (L) tokens increase in value when the underlying price feed increases; short (S) tokens increase in value when the underlying price feed decreases. Pick wisely.

Price Feed

The final part of the token ticker refers to the underlying price feed which the token tracks. We have three different price feeds which a market may be based upon - ETH, BTC or LINK. All prices are in terms of USD. The price feed is the asset you will be taking long or short side exposure to.

Step 4: Collateral Amount

It's time to provide your PPUSD as collateral. There's no longer a minimum Trade size when interacting with Perpetual Pools V2 contracts.

For the “From” selection - simply pick Wallet initially. Escrowed collateral will only be an option if you have PPUSD from burning other positions which you have not yet claimed back to your wallet.

Step 5: Unlock PPUSD

Unlock your PPUSD to start investing with Mycelium by selecting the 'Unlock PPUSD' button. This is a one-time transaction for each pool. You will have to verify the transaction when your wallet prompts you.

Step 6: Mint!

Mint your tokens! Select, 'Mint' and follow the MetaMask prompts. Once accepted, your order will be put into the queue and you'll receive your tokens at the end of the front-running interval which is approximately 8 hours.

Please note: Your tokens will be minted ~8 hours after you mint. The price at which you will receive these tokens is calculated based on the average price of the asset over the following 8 hours.

Step 7: Check Pending Mints and Wait

Navigate to the ‘Portfolio’ window and under the Pending Mints tab you will see your order is queued.

Interface 3

Once the front-running interval has elapsed. The tokens will appear in your Escrow holdings. This means the positions are yours, you are exposed to the market you selected but the tokens are still sitting in the V2 contracts - not in your wallet. You can use the “Claim” function to move the tokens into your wallet - or monitor your position using the Mycelium Portfolio interface.

Step 8: Add Token Address to MetaMask

To add the token address to your MetaMask, view the tokens in the 'Pools' tab. Find the token you wish to add to your MetaMask and click the 3 dots next to 'Trade'. Select 'Add token to wallet' and follow the MetaMask prompts.

Congratulations, you've just successfully minted your very first pool tokens! These tokens a fully-fungible ERC20s to be used throughout the DeFi economy. Now let's look at some next steps.

Burning and Flipping Pool Tokens

Navigate to the "Pools" tab. Like you did when minting, use the drop-downs to choose a Pool to redeem tokens in. To burn your leveraged tokens, you need to exit the Pool. Click the Trade button at the right of the Pool module for the side of the Pool you're in:

Interface 4

Next, change the action at the top of the new modal to Burn or Flip. Now you'll be able to see where your tokens are held. You can choose to burn from your wallet or in escrow. If you want to do both, you'll have to make separate actions. Click the location you want to burn from:

Interface 5

Now you enter the amount of tokens you want to burn manually or click max. Before you sign off on the transaction, have a look at the count down timer. That's the time until your commit is entered. After that, you are committed to exiting the Pool and will have to wait 8 hours before you can claim the settlement funds. You'll then get a notification to tell you that your exit was successful. Don't wait around, it's going to take 8 hours before you can claim your funds. We'll hold them in escrow so you can get them any time after that.

To ‘Flip’ your position, you’re going from Long to Short, or Short to Long, instead of entering in and out of USDC. This allows you to bypass an additional 8 hour minting or burning period. You’ll follow the same steps as minting and burning to execute this trade.

Mycelium's Perpetual Pools interface was designed with ease of use and access in mind. It only takes a mere handful of steps to mint and burn tokens. If you have any questions, comments or would otherwise like to reach out to the team, join our conversation over on Discord and follow us on Twitter.

Note: This blog post was originally posted by Tracer DAO. The DAO voted to transition to Mycelium in August 2021. As a result, we have updated all of our documentation and content including this post to reflect the change to Mycelium.

This blog post was originally posted by Tracer DAO.

The DAO voted to transition to Mycelium in August 2022.
As a result, we have updated all of our documentation and content including this post to reflect the change to Mycelium.

Posted on Tracer
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FAQs


All of Mycelium’s products are hosted on Ethereum Layer 2, Arbitrum. Users will need to bridge their assets to Arbitrum in order to trade Perpetual Swaps, Perpetual Pools, or Lend via MYC Lending.

Arbitrum is a secure, low-cost scaling solution that ensures our users can access low-cost derivatives in a safe, simple, and speedy environment.

If you need assistance bridging your assets, our team has prepared a guide here.


Mycelium Perpetual Swaps is a decentralised derivative platform, which allows users to open leveraged long and/or short positions on crypto-assets.

Perpetual Swaps are similar to a Future where traders can take a position based on the future price of an asset, the key difference being Perpetual Swaps mechanisms allows traders to take this position at an unspecified point in the future, making it ‘perpetual’ or unable to expire. Mycelium Perpetual Swaps allows traders to take a position on digital assets such as Bitcoin and Ethereum.


Mycelium Perpetual Swaps doesn’t use an order book model for leveraged trading. Rather, all traders trade against the Mycelium Liquidity Pool (MLP). The MLP is a basket of blue-chip assets and stablecoins pooled together (ETH, BTC, LINK, UNI, BAL, CRV, FXS, FRAX, USDT, DAI, USDC) which acts as a global AMM for leveraged trading. Liquidity providers can deposit any whitelisted asset into the MLP pool in return for MLP tokens, which represent the LPs share in the diversified liquidity pool. By acting as a universal counterparty (AMM) to traders, meaning that it agrees to be the counterparty to any long or short trade at the given price, for an asset it holds, until it runs out of said asset.


In exchange for providing liquidity to the Mycelium Liquidity Pool (MLP), liquidity providers earn rewards. Primarily, MLP holders earn 70% of fees generated on the platform, which is distributed fortnightly in ETH and or esMYC.

  • ETH Rewards: The MLP pool earns 70% of fees generated from swaps and leveraged trading. These fees are converted to ETH, before being continuously distributed to MLP stakers.
  • Escrowed MYC Rewards: These are rewards in the form of a token which has the right to vest into $MYC when staked in the esMYC vesting vault.

The trading fees that make up this revenue are entry/exit fees, borrowing fees, and or a spot trading fees. For a full overview of the trading fees, visit this page.

Additionally, LPs earn rewards from a small bid/ask spread that is charged on long-tail assets (there is no spread on BTC or ETH). These rewards accrue as MLP, shown on our front-end as Market Making APR. These rewards can be redeemed at any time, in any asset form within the MLP basket of assets.


Yes. Perpetual Pools are a marketplace for leveraged tokens, while perpetual swaps simulate spot trading with margin. They are both derivatives, but Perpetual Pool tokens act most like a leveraged ETF, where positions are transferable.


Mycelium Staking is a program established by Mycelium to give utility to our governance token. MYC holders can stake their $MYC to earn ETH rewards. MYC Stakers effectively enter a loan agreement with the Mycelium Treasury to lend their MYC. The Loan Cycles occur fortnightly, meaning deposits and withdrawals are processed at the beginning/end of each cycle. Stakers can request withdrawals throughout the cycle, noting the withdrawal will be processed and distributed at the end of the cycle.


Don’t worry, you are earning rewards! The rewards only show at the end of the 14 day loan cycle.


The way the Perpetual Pool market calculates how much money to move from the losers to the winners prevents the loser from ever losing 100% of their money. The pool does this by, in extreme scenarios, sacrificing some of the gains of the winners in order to protect the losers from losing everything. This is why we say Perpetual Pool positions cannot be liquidated.

However; this does not mean you cannot lose money by trading with Perpetual Pools.


In August 2022, TracerDAO voted to transition and rebrand to core service provider Mycelium, and $MYC as the native token. All TCR holders are entitled to change their token 1:1 to MYC via this site: https://migrate.mycelium.xyz/

The majority of TCR holders have migrated to MYC, but the site will remain active for approx. 3 years to ensure all TCR holders have the opportunity to migrate.


When a trader enters a short position, the liquidity pool will fully collateralise the position with stablecoins. For short positions, the liquidity pool is essentially a market maker that takes the opposite side of the position, increasing the long exposure of the pool. If the price of the base asset depreciates, the trader receives stablecoins from the liquidity pool. If the price of the base asset appreciates, the liquidity pool receives a portion of the user’s margin as compensation.

At close, the trader will only have to return the USD value of the initial notional value to the liquidity pool. Thus, the trader is effectively entitled to the inverse of the future “PnL” (Profit and Loss) of an asset.


With Perpetual Pools v2, users can deposit any sort of collateral for maximal optionality. Additionally, there is no minimum-commit size.


On Mycelium Perpetual Swaps traders can access up to 30x Leverage. On Mycelium Perpetual Pools traders can access up to 10x Leverage.

Swaps logo

More Leverage. Less Overhead