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Mirror Protocol Stock Price vs Crypto Arbitrage Potential

Mirror Protocol offer synthetic stocks to trade built on Terra Luna. The difference between the Oracle price and the Pool price presents what I feel is a potential setup for arbitrage. In this video, I walk you through the thoughts and process on this.

In short, the idea is that you could borrow a stock (synthetically) when the difference % between the Oracle and Pool is low, then when it is high, short the stock and low buy back. Your position would then be hedged always in the “real world” stock market so that you are not exposed to any price movement (also known as delta risk).