# Protocol Layer

Mirror protocol comprises multiple layers, ranging from proprietary algorithms to its own data model and diversified vaults integrated with our AI trading engine. These elements span the entire DeFi ecosystem, capturing snippets of every on-chain activity. The system continuously learns and adapts to market shifts and evolving trends, ensuring no opportunity is overlooked. By drawing on historical patterns and monitoring real-time on-chain events, we can predict upcoming moves with exceptional accuracy.

<figure><img src="/files/31sC2RDJh3r8uR0O8mTZ" alt=""><figcaption></figcaption></figure>

A portion of the profits generated by the treasury will be allocated toward buying back MFI tokens. The primary focus will be on decentralized perpetual trading, including farming funding fees and executing a range of strategies using proprietary algorithms across multiple time frames and trading styles.

The majority of trading activity is expected to be conducted through Hyperliquid vaults, allowing anyone to join and participate in the protocol. This enables users to benefit from Mirror’s technology and strategies, while contributing to the growth of the ecosystem through vault-level fees. These fees compound the treasury over time, increasing the capacity and frequency of MFI token buybacks as the system scales.<br>

We will also pursue additional strategies to grow the treasury, including yield farming, arbitrage, analyzing data from top traders across all EVM-compatible chains and mirroring their trades to generate profits, and participation in prediction markets. This approach drives sustained growth for the protocol by expanding its treasury, delivering tangible benefits to users and participants alike.


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