This multi-collateral system was an advance on the codebase Prisma uses; later Prisma unveiled the ability to have multiple tranches for each collateral and launched PrismaLRT and the stablecoin $ULTRA for liquid restaking tokens.

As a latest piece, Prisma will soon be launching a tokenized stability deposit, enabling users to deposit mkUSD into the stability pool and mint smkUSD, thereby allowing them to enjoy the benefits (i.e. APR) of the stable pool while having the option to use their capital elsewhere in DeFi-land. But first, some updates:

Today we are announcing some important updates

• The original Vaults for all of the LSTs will be deprecated. The original Vaults had a 4% interest rate cap and the new Vaults will allow for higher interest rates.

• The current Vaults for all of the LRTs will be deprecated and replaced. This change will include some optimizations that will make redemptions more efficient.

• We have a migration tool that makes migrating your vault easy. No need to unwind your leverage or LP positions.

Who does this affect?

• The 4 original LST Vaults with the IR cap will be deprecated: wstETH-A, sfrxETH-A, rETH and cbETH.

• The 3 current LRT Vaults: weETH, ezETH and rsETH.

How will this happen?

• Prisma will provide a migration tool for users to move their positions to the new Vaults..

• New Vaults will have a 0% mint fee for a limited time, allowing users to migrate their positions from the old Vaults without paying a mint fee .

• In approximately 7 days, the old LRT Vaults will be set to a “Sunset” status, which will increase the interest rate on the Vaults to 50%. Users should migrate into the new Vaults using the migration tool in order to avoid paying this rate.

• In approximately 10 days, the old LST Vaults will be set to a “Sunset” status, which will increase the interest rate on the Vaults to 50%. Users should migrate into the new Vaults using the migration tool in order to avoid paying this rate.

When will this happen?

Prisma is a DAO, and these changes will follow the normal governance process:

1. A post in our governance forum.

2. A snapshot ‘temperature’ vote.

3. On-chain voting.

There will be three votes:

Vote 1

• Deploy new Vaults and add them as emission receivers.

• Disable old Vaults as emission receivers.

• Set max debt on old Vaults to zero.

Vote 2 (4 days after vote 1)

• Sunset LRT Vaults: interest rate rises to 50%.

Vote 3 (7 days after vote 1)

• Sunset LST Vaults: interest rate rises to 50%.

I have a Vault on Prisma and am affected, what do I have to do?

To avoid any issues with having to pay the Sunset IR rate of 50%, users with Vaults on Prisma should migrate their positions to the new Vaults as soon as possible, preferably during a period of low gas prices.

Mint fees will be 0% during this time, so no further costs will be incurred for opening a position in the new vault.

Migration tool

To help migrate your vault, Prisma’s based devs have built a tool to migrate your vault without having to buy back your stable coin, unwind any positions or remove your liquidity from Curve or other DEXes.

The tool will be available when the new vaults are live.

Questions and concerns

For questions and concerns, please head to our discord and the team will be happy to answer any questions.

Join the Prisma Community

To get involved and stay up to date:

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

• Follow @PrismaFi on Twitter

Given recent market developments, including Bitcoin reaching all-time highs, there is a significant potential for market euphoria. This led to increased demand for debt minting and subsequently put pressure on reserves and the peg for our stablecoins.

Observing actions taken by prominent actors in our space, such as Maker which recently raised their interest rates and adjusted other parameters to fight this new pressure, it's evident that other protocols have been charging high fees for weeks without observing a significant impact on their usage. The prevailing global sentiment in the current market still favours debt minting, with users demonstrating a willingness to pay more for access to a stable and resilient stablecoin that aligns with their strategies.

Given the relatively high volatility and interest rates in the crypto market at present, Prisma must adapt. With [PIP-031], the DAO is implementing necessary measures to address these challenges, focusing on restoring the peg and fortifying our position within the market.

Change of Vault parameters

Given the challenges facing the mkUSD peg, urgent measures by the DAO to bolster interest rates substantially and adjust mint fees on capped tranches to enhance Prisma's competitiveness within the broader ecosystem were necessary. Likewise, ULTRA's peg faces similar difficulties, prompting our action to elevate the interest rate to 20%.

Past experiences have demonstrated that adjusting these parameters significantly aids in restoring the peg and reducing redemptions. We have two levers at our disposal: the Interest Rate (IR) and the Mint Fee. By increasing one or both of these levers, we can influence the utilization of the vault and the borrowing amount of mkUSD/ULTRA, all while continuing to generate fees for the DAO.

Now that [PIP-031] has been enacted, here are the new vault parameters:

Impact for users

We acknowledge that these adjustments may appear drastic. However, we firmly believe they are justified given the current market dynamics and the potential benefits they offer to the peg and vault owners in the long run.

The substantial PRISMA emission helps offset the increased borrowing costs, granting users access to a more robust stablecoin, liquidity, and greater yield opportunities. Aligning Prisma with current market conditions is crucial to remain competitive with other CDPs.

Each iteration introduced to Vaults brings valuable insights, enabling us to improve the protocol and reinforce our position in the space. In the coming weeks, we will present significant proposals, all geared towards our shared objective: establishing a stronger and more widely adopted stablecoins issuer protocol.

Join the Prisma Community

To get involved and stay up to date:

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

• Follow @PrismaFi on Twitter

Market landscape

The total amount of ETH being restaked has grown significantly over the past months. Current data indicates that 1,140,162 ETH (source: https://dune.com/hashed_official/lrt) has been restaked in multiple LRT protocols, propelling this into the top 10 of highest TVL DeFi categories according to data from DefiLlama, with a current TVL of $3.33 Billion:

Let’s take a closer look at four major Liquid Restaking Token protocols that are gaining momentum:

EtherFi (eETH)

EtherFi was the first LRT on the market that enabled stakers to unlock the benefits of ETH staking, staking rewards and EtherFi/Eigenlayer points. It currently holds the lead position in TVL rankings, capturing ~35% of the Liquid Restaking Market, with roughly 413,000 ETH restaked.

Kelp DAO (rsETH)

Restakers in Kelp can stake their Liquid Staking Tokens (LSTs) to generate rsETH tokens, which represent the related ownership of a pool of the underlying restaked assets. These tokens are then allocated among different Node Operators collaborating with the Kelp DAO. The value of the rsETH token reflects the underlying value of the various reward and staked tokens. In simple terms, by staking their LST, users can earn rsETH tokens, which entitle them to a share of rewards from the restaked assets, reflecting the overall value of the staked and reward token.

Renzo (ezETH)

Renzo is a Liquid Restaking Token (LRT) and Strategy Manager for EigenLayer. It serves as the gateway to the EigenLayer system, which secures Actively Validated Services (AVSs) and provides a higher yield compared to ETH staking. Currently it holds a market share of ~9.5% of the total Restaking Token TVL.

Swell (rswETH)

rswETH is Swell’s ERC20 Liquid Restaking Token that provides liquidity for users who want to "restake" their ETH into restaking protocols such as EigenLayer without requiring a 32 ETH minimum, operating a node or having their restaked ETH locked.

What’s next?

By tapping into the ~$3 Billion Liquid Restaking Market, Prisma Finance will lay the groundwork for one of the first DeFi applications for LRT holders, providing access to the first stablecoin backed only by LRTs. Given the different risk profile associated with LRTs compared to LSTs, PrismaLRT provides the flexibility to finetune its parameters independently. PrismaLRT will introduce a new stablecoin $ULTRA backed by LRT. This product will be tailored to LRT holders seeking more yield while staying exposed to the point system in play with restaking. Prisma has already reviewed several LRT collaterals, assessing the corresponding risk levels and determining the appropriate parameters for each, in close collaboration with the respective teams. We are pleased to work in close relationship with them, and with RedStone Oracles, allowing for swift integration in the next weeks and more incentive for LRTs users on PrismaLRT.

Join the Prisma Community

To get involved and stay up to date:

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

• Follow @PrismaFi on Twitter

To date, liquid restaking boasts an impressive TVL that surpasses $3 billion with several notable protocols like Ether.fi, Renzo, KelpDAO, and Swell building on top of EigenLayer.

However, LRTs are facing the same problems LSTs experienced when Prisma was being built: what do you do with your LRT once you have it?

Introducing $ULTRA

$ULTRA is a new stablecoin issued by PrismaLRT, a new borrowing protocol developed by Prisma focused on unlocking liquidity for Liquid Restaking Tokens (LRTs).

PrismaLRT is purpose-built with parameters and features tailored specifically to realize the full potential of LRTs. A new protocol that will be integrated within the Prisma UI allowing users to seamlessly borrow using their LSTs or LRTs.

Given that LRTs are an exciting and new developing asset, the development of a new stablecoin that can adjust to changes quickly, and provide more room to scale without impacting native LST users and holders of mkUSD was needed.

By minting $ULTRA with their LRT, depositors can retain all of the rewards, points, and upside from owning an LRT, and unlock their capital as ULTRA, a stablecoin that can help them capture additional opportunities and yield on Prisma or throughout DeFi.

Launch Assets

We are proud to collaborate with some of the leading protocols in the LRT ecosystem. This close relationship allows us to design PrismaLRT to be as close as possible to the specificity and needs of this industry.

PrismaLRT will launch supporting initially one asset, weETH from ether.fi.

We have decided to initially start using weETH, with more assets to be added over time. Our strong collaboration with the respective LRTs teams and RedStone Oracles gives us confidence in the swift integration of these LRTs, providing Prisma users with more collateral options.

Governance

PrismaLRT will be governed by the PRISMA DAO, giving holders of locked PRISMA a say in the future of the protocol through voting. It is important to note that governance participants will be responsible for redirecting emissions towards PrismaLRT as well as voting on proposals made to the DAO.

What’s next?

PrismaLRT will be the cornerstone on which Prisma will expand within the LRT ecosystem, enabling more collateral options, while managing risk.

By unlocking liquidity for LRT holders and fostering collaboration with leading protocols in the field, PrismaLRT is set to open new market possibilities to benefit both PRISMA and LRT holders.

Join the Prisma Community

To get involved and stay up to date:

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

• Follow @PrismaFi on Twitter

Why introduce new vaults?

Each user has different needs and by offering two options you can pick whichever strategy caters more to your needs. The main differences are the costs of opening these vaults and the redemption risk. Depending on whether you want to borrow mkUSD or use Prisma to leverage your ETH position, each vault can serve a different purpose.

1. Consider the cost

   Not all vaults cost the same; some are better for short-term borrowers, and some for long-term borrowers.

   Short-term borrowers can benefit from the new vaults, which will be introduced with a 0% mint fee*, this new vault provides cheaper borrowing costs for users that don’t want to borrow for longer than ~3 months.

   Long-term borrowers benefit from the current vaults, which have a lower interest rate* of 4% compared to the new vaults 6%, the current vaults provide a cheaper borrowing cost for users that want to borrow for longer than 3 months.* Both the interest rate and mint fee are subject to change pending a DAO vote

2. Redemption risk

   Redemptions are an important mechanism for Prisma to help mkUSD stay at its peg of $1, they work by paying off the debt of Prisma’s riskiest users in return for their collateral. When someone redeems, they are charged a fee. This redemption fee** will be 1.5% for the current vaults and 1% for the new vaults.**Redemption fees are subject to change pending a DAO vote

   Current vaults will have lower redemption risk because of the higher redemption fee. The new vaults introduce a rebate system that gives the redemption fee to users whose vaults have been redeemed against.

   While the current vaults have less risk of getting redeemed against because of the higher redemption fee, the new vaults introduce a new mechanism that will pay the 1% redemption fee to the user vault that got redeemed against. What does this mean?

   Example: Alice opens a vault on Prisma using the new vault. Bob sees an arbitrage opportunity and redeems Alice her vault, paying the 1% redemption fee. In return for getting redeemed, Alice receives this 1% redemption fee. While getting redeemed, Alice does not incur losses but does reduce or lose her exposure to her collateral.

What are the benefits of this new update?

• Cheaper borrowing costs for short-term borrowers

• Redemption fee rebates for short-term borrowers

• Reduce redemption risk for long-term borrowers

• Allow for lower collateral ratios for long-term borrowers

• More fee revenue for the PRISMA DAO

Try it now at app.prismafinance.com/vaults

Getting in touch

If you have any questions regarding Prisma, contact us on Discord. WebsiteTwitterKnowledge Base

How to apply?

There are two types of grants with the common goal of encouraging and developing the Prisma ecosystem and empowering the community.

1. Rapid Grants (<20k mkUSD, fast process, smaller grants) Fill out this application. The application will only be shared with members of the grants committee. If it passes a round of review, the committee will approve it and send you confirmation within 2 weeks.

2. Community Grants (20k - 100k mkUSD, slower process, bigger grants) Fill out [this application](https://1b87s2mpyjg.typeform.com/to/WZCm3R3E). The committee will assess the proposal and guide you on how to share it on the Prisma governance forum. Positive feedback will lead to your grant being approved.

3. Large Grants (Grants over 100k mkUSD)Grants over 100k mkUSD are outside of the scope of this proposal and will be subject to an on-chain approval by the DAO. The committee is happy to provide feedback given that the application is filled out with your reasonings for applying.

Users or applications with questions may join our dedicated #grants-discussion channel on Discord:

Eligibility and criteria for grant funding

Grants aim to encourage and develop the Prisma ecosystem, they are for individuals and teams of all sizes looking to build products and initiatives. Focus areas for funding include:

• Application development: is a category for teams building an application on top of or integrating any aspect of the Prisma protocol in their project.

• Tooling: is a category for teams building tools or any related software infrastructure directly beneficial to individuals, institutions, or developers using or building on Prisma.

• Audits: is a category for applicants that have built an integration or application on top of or using Prisma protocol in some way and are looking for funds to help specifically with code audit costs.

• Hackathons: is a category for applications from hackathons organizers looking to partner with or be sponsored by PGP.

• Bounties: is a category for applicants that have found a meaningful vulnerability in the Prisma code base.

Success will be measured by:

• Increases TVL, LST adoption, or other protocol metrics

• Expand the capabilities and utility of Prisma

• Engage new users and enhance retention of current users

• Grow mkUSD and smkUSD by stimulating demand, expanding its utility, and boosting transactional velocity

Grants Committee

The committee to review those grants will be composed of the following members:

Committee lead: Frank Olson - Core contributor at Prisma Finance

Reviewers: Wavey(Yearn), Winthorpe(Convex), Nader Ghazvini(Frax), Tetranode, DeFi Dad(4RC)

Protocol Fees Redistribution to vePRISMA Holders

In response to the growing success and increasing TVL, reaching an all-time high of more than $400 million, Prisma has enacted a significant change in its structure and revenue sharing. Effective from the next epoch (Thursday 21st), protocol fees will be distributed to vePRISMA holders, aligning incentives and fostering greater community participation.

Motivation Behind the Decision

The decision to distribute protocol fees comes after a bit more than a month since the launch of Prisma's DAO and three months live on Ethereum. With an annualized fee estimate of $48 million, the true figure, excluding PRISMA penalty fees, is expected to be around $10 million. This includes $6 million in interest rate fees and $4 million in mint fees, translating to approximately $200,000 per week.

Prisma has emerged as the third-largest Collateralized Debt Position (CDP) protocol, trailing only MakerDAO and Liquity. The decision reflects the platform's commitment to sustainable growth and community involvement.

Key Features of the Protocol Fee Redistribution Proposal

1. 100k mkUSD weekly: Protocol fees from the FeeReceiver will be distributed weekly, up to 100k mkUSD.

2. LST Fees Distribution: Any LST fees will be sold for mkUSD, contributing to the overall distribution.

3. Liquidity Pool Enhancement: A portion of the fees, 25k mkUSD paired with $25k PRISMA, will be added to the mkUSD/PRISMA pool weekly, owned by the DAO in perpetuity.

4. Remaining PRISMA: PRISMA remaining in the FeeReceiver will be retained for the time being, serving as a potential backstop or a future mechanism for incentivization, subject to DAO approval.

5. Adjustable Cap: The weekly 100k mkUSD distribution cap is adjustable based on the protocol's growth and revenue performance. The DAO retains the flexibility to adapt to changing circumstances.

Benefits of the Protocol Fee Redistribution

• No Increase in PRISMA Emissions: The redistribution strategy avoids increasing emissions of PRISMA by excluding $PRSIMA penalty fees.

• VePRISMA Holder Incentivization: By distributing fees to vePRISMA holders, the protocol ensures that those who commit to locking PRISMA for a year are appropriately incentivized.

• Attractive Yield for Locked PRISMA: With PRISMA locked for a year yielding approximately 38% APR at current prices, vePRISMA holders can enjoy an attractive return on their commitment.

• Future Flexibility: The retained PRISMA in the FeeReceiver provides flexibility for future use.

We appreciate the active participation of our community members in shaping the future of Prisma, through proposals, discussion, and active communication.

As we continue to grow and evolve, the Prisma DAO remains committed to transparency, decentralization, and the empowerment of our community.

Thank you for being part of the Prisma journey, it’s only the beginning!

Liquid lockers accumulate and perpetually lock governance tokens like PRISMA every week, and in the case of Prisma this optimizes returns of depositors through Prisma’s boost mechanism.

Boosting on Prisma

Boosting is an exciting feature available to locked PRISMA holders. By locking PRISMA, users get access to boosted emissions - a bonus - earning up to 2x the rate of unboosted rewards. The more PRISMA a user locks and the longer the lock duration, the more lock weight they receive.Users that would like to automate their operations would benefit from depositing their PRISMA into liquid lockers, making it easier to earn yield on Prisma. Liquid lockers aggregate PRISMA from users and lock them perpetually in return for providing a 1:1 derivative of PRISMA that is transferable. Additionally Prisma vault users and LP’s can access boosted rewards.

Liquid lockers provide Prisma users with:

1. Instant liquidity: holders of vePRISMA derivatives like cvxPRISMA and yPRISMA are transferable.

2. Boosted rewards: Prisma LP’s enjoy added boosts through Convex while Prisma vault users can choose between Convex and Yearn to utilise their lock weight & enjoy boosted rewards.

3. Prisma protocol rewards: holders of cvxPRISMA and yPRISMA are eligible to receive native yields once implemented.

4. Incentives: cvxPRISMA holders receive additional CVX rewards, and Yearn has approved an incentive program rewarding yPRISMA holders with additional stETH rewards.

Liquid lockers enhance the Prisma protocol, and working with mature protocols like Convex, Yearn and their communities is a great opportunity to create more value within the Prisma ecosystem.

About Convex

Convex, a bluechip among DeFi protocols, has been the leading yield aggregator with its ever-expanding flywheel of veTKNS. As one of our earliest partners, Convex is thrilled to welcome cvxPRISMA into its family and expand its service to the Prisma community. With its major stake in Curve vote weight, Convex will be partnering with Prisma, enabling vePRISMA holders to enjoy a large boost and allowing them to claim their vePRISMA as liquid, all while optimizing their yield for maximum efficiency.

With other blue-chip protocols such as FXS and an expanding list of new innovative protocols under its belt, Convex has the potential to build unique synergies and yield opportunities for vePRISMA holders through their cvxPRISMA product.

About Yearn

Yearn, a long time DeFi bluechip, has established itself among DeFi's biggest yield aggregators and is a central player in the Curve wars. With the launch of the Prisma protocol, they are now excited to be joining as a partner to build the yPRISMA liquid locker. By continuing to build upon its large lock position (currently 2nd biggest behind Convex), Yearn will extend the benefits of its vePRISMA position to users, with the goal of optimizing passive yield for yPRISMA holders.

Just as Prisma itself has found great success by working closely with ecosystem partners, Yearn has plans to do the same. Using its relationships, other products, and veCRV position to bring unique advantages to the yPRISMA product.

The purpose of the PRISMA Retroactive Airdrop is to stimulate participation in Prisma’s on-chain governance and to enable the wider community to act as responsible stewards of the protocol’s development.

veCRV Airdrop

veCRV holders are among the top communities in DeFi, representing sophisticated users who will be valuable members of the Prisma ecosystem. In return for voting to whitelist Prisma, they will receive 1% of the total supply, distributed proportionally to all veCRV voters who voted on the proposal (https://gov.curve.fi/t/whitelist-the-prisma-dao-curveproxy-contract/9494).

Prisma Points Airdrop

To encourage and reward early users of the Prisma Protocol we introduced the Prisma Point system. The system was designed to track users’ contributions to the Prisma Protocol. Users would earn points by opening a vault and minting mkUSD, depositing mkUSD into the stability pool, and providing liquidity on Curve. To reward these early users we have allocated 2% of the total supply to Prisma Point holders, distributed proportionally based on the percentage of total points earned by each user.

Conditions

All tokens allocated towards the airdrop are locked as vePRISMA to stimulate participation in the Prisma DAO, enabling greater community ownership and decentralized decision-making. veCRV voters vePRISMA are locked for 52 weeks and Prisma Point holders vePRISMA are locked for 26 weeks.

How to claim PRISMA

The airdrop for veCRV voters is scheduled for November 6th, 9 a.m. UTC. The airdrop for Prisma Point holders is scheduled for November 9th, 9 a.m. UTC. In order to claim PRISMA, go to our website at www.prismafinance.com.

Neutrality and trust minimizations are among the tenets on which we have built the dedicated governance system for Prisma. Starting today, all changes to the Prisma Protocol originate from PRISMA token holders. The governance framework is limited to changing economic parameters and voting for collateral onboarding to maintain and protect the immutable and autonomous qualities of the Prisma Protocol. The creation of the Prisma DAO is the optimal approach for Prisma, allowing vePRISMA holders to serve as responsible stewards of the protocol.

A DAO open to all

Possessing PRISMA and participating in Prisma governance are not the same; Prisma uses a veToken model that gives voting authority to vote-escrowed PRISMA holders (vePRISMA).

DAO members gain voting power by locking their PRISMA, the longer these tokens are locked, the higher the voting power. The more voting power a user holds, the greater the decision-making power the voter receives.

vePRISMA will be used across all future DAO votes, giving every token holder a say in the direction and growth of the PRISMA DAO. The DAO can formally vote on the following:

• Directing PRISMA emissions

• Modifying fees

• Adding or removing collateral

• Pausing or unpausing protocol functionality

• Transfer protocol fees

• Adjusting the quorum on admin votes

We’re excited to see how Prisma evolves and invite anyone who would like to get involved to participate in governance and help improve the protocol.

Voting interface

Addresses that hold PRISMA can start locking their PRISMA on app.prismafinance.com. The longer the locking period, the more voting weight you will earn. Users who have locked their PRISMA can submit votes to determine how PRISMA emissions are distributed within the protocol.

To start discussing and creating governance proposals visit: gov.prismafinance.com. We’ve created a framework allowing anyone to create a Prisma governance proposal.

What’s Next

With the launch of the PRISMA token scheduled for November 2nd, the introduction of the Prisma DAO marks a significant milestone in the evolution of our decentralized ecosystem. The creation of this DAO not only reflects our commitment to community-led growth and trust minimization but also opens the doors to a more inclusive and democratic decision-making process. As we move forward, we eagerly anticipate the dynamic changes and improvements that will be driven by our vePRISMA holders, who will play a pivotal role in shaping the future of the PRISMA DAO. With an open invitation for all to engage in governance, we're excited to witness the collective efforts that will propel Prisma to new heights.

Starting next week on November 2nd, the future of Prisma belongs to the DAO community.

PRISMA Distribution

PRISMA will have a max supply of 300 million, and will be distributed as follows:

• 62% (186,000,000 PRISMA) are allocated towards emissions. These emissions are directed by the Prisma DAO and incentivise certain actions within the Prisma Protocol. Emissions can additionally be used to incentivise liquidity on liquidity pools.

• 20% (60,000,000 PRISMA) are allocated to the Core Contributors. These tokens will be unlocked linearly for 12 months starting at Genesis.

• 10% (30,000,000 PRISMA) is allocated to Early Supporters who assisted in bootstrapping costs associated with the initial development of the Prisma Protocol. These tokens will be unlocked linearly for 12 months starting at Genesis.

• 5% (15,000,000 PRISMA) will be held in the Prisma DAO Treasury.

• 3% (9,000,000 PRISMA) will be distributed towards veCRV voters and Prisma Point holders.

PRISMA Emissions Schedule

The 62% (186,000,000 PRISMA) allocated for emissions will be distributed as follows:

• Weeks 1-4: 2,250,000 tokens per week.

• Weeks 5-13: 1.2% of the remaining emission tokens per week.

• Weeks 14-26: 1% the remaining emission tokens per week.

• Weeks 27-39: 0.9% the remaining emission tokens per week.

• Weeks 40-52: 0.8% the remaining emission tokens per week.

• Year 1-2: 0.7% the remaining emission tokens per week.

• Year 2-3: 0.6% the remaining emission tokens per week.

• Year 3+: 0.5% the remaining emission tokens per week.

Note that because of how the Prisma boost system works, the numbers quoted above are the maximum amount claimable in that week; the actual claims will be somewhere between 50-100% of these numbers, and anything unclaimed due to this is returned to the unallocated supply.

What’s Next

The growth of the Ethereum ecosystem in the coming years represents a monumental opportunity for LSTs. Prisma is positioning itself to provide a bedrock financial infrastructure allowing LST protocols and users to expand the utility of their LSTs across DeFi.

Over the next few days, we’ll be releasing a series of posts and articles covering governance, incentives, and our ve-model, to introduce to you how the new Prisma DAO will work in detail.

Join the Prisma Community

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

• Follow @PrismaFi on Twitter

We’re excited to announce that mkUSD is listed on Stargate Finance, allowing users to fluidly and swiftly move assets across chains, powered by LayerZero. mkUSD stands as one of the pioneering omnistables, making full use of LayerZero's Omnichain Fungible Token (OFT) standard. Prisma Finance was born with the integration of LayerZero in mind, enabling us to transcend existing boundaries and redefine the possibilities for not only the Prisma protocol but also our very own stablecoin, mkUSD. LayerZero's OFT standard provides us with the essential infrastructure to push the boundaries of what's achievable and set new standards.

As of today, users can easily transfer their mkUSD across multiple chains with unparalleled ease.

Prisma Finance OFT Bridge | LayerZero

https://bridge.prismafinance.com/oft

Say goodbye to slippage, extended wait times, and excessive fees. This marks a monumental stride into the future of decentralized finance, where the constraints of the past have been rendered obsolete.The LayerZero protocol, at its core, offers a decentralized, cross-chain messaging solution that paves the way for seamless interoperability between different blockchain networks. It encompasses Ethereum, Arbitrum, Optimism, Base, BNB Chain, and all other future chains that Prisma is set to support. With Stargate and LayerZero, the future of DeFi is here, offering unprecedented freedom and flexibility in asset management.

What is an Omnichain Fungible Token (OFT)?

The Omnichain Fungible Token (OFT) represents a groundbreaking token standard designed to address several challenges related to bridging assets between different blockchain networks. Unlike conventional bridging methods that depend on wrapped assets, the OFT standard offers the capability to mint and burn any fungible token across a range of LayerZero-supported chains. This means that tokens like ERC-20s and native gas tokens, which embrace the OFT standard, can be seamlessly transferred in a single transaction on the source chain for the user.

About Prisma

Prisma is a new DeFi primitive focused on realizing the full potential of Ethereum liquid staking tokens (LSTs). Prisma enables users to mint a stablecoin, mkUSD, that is fully collateralized by liquid staking tokens. The stablecoin will be incentivized on Curve and Convex Finance to create a capital-efficient flywheel where users can receive trading fees, CRV, CVX, and PRISMA on top of their Ethereum staking rewards. The Prisma codebase is completely immutable, based on Liquity, creating a robust protocol and truly decentralized stablecoin with favorable and flexible collateral parameters. These features make it attractive for those wanting to get the best out of their LSTs without tail risks from other stablecoins. The Prisma DAO will be in charge of parameters, emissions, and protocol fees.

Starting Friday at 9am UTC, users can access the protocol at prismafinance.com and realize the full potential of their liquid staking tokens (LSTs).

To ensure a smooth and secure experience for all users, Prisma Finance is undergoing a guarded launch. We have set debt caps on each collateral, and will progressively increase them over time. Interest rates are set to 0% to encourage early participation. Token emissions are initially disabled.

At launch, Prisma supports the following assets as collateral: wstETH (Lido), rETH (Rocket Pool), sfrxETH (FRAX), and cbETH (Coinbase). The total amount of mkUSD mintable for each collateral is $6M for wstETH, rETH and sfrxETH, and $2M for cbETH. We will give a 24 hour notification prior to any increases in these caps.

The PRISMA Token

As we exit the guarded launch, Prisma will introduce the PRISMA token. Users will be able to lock PRISMA to receive vePRISMA, allowing them to participate in governance and boost their PRISMA emissions.

With vePRISMA, LST protocols can incentivize demand for their tokens, increasing yield opportunities by voting for PRISMA rewards on their own collaterals.

vePRISMA can be directed towards boosting PRISMA rewards:

• for stability pool staking

• for minting new mkUSD with a certain collateral

• to maintain an active borrow with a certain collateral

• for staking LP tokens that are relevant to Prisma

Details on the specific tokenomics will be released prior to the start of emissions. Read more on what sets Prisma apart here.

Protocol Security

The security of the Prisma protocol is our top priority:

1. Our smart contracts have been through multiple independent third-party audits. The results of the audits are available in the External Audits & Security section of the Prisma documentation.

2. The 3rd-party Prisma Risk Team has evaluated all of our initial collaterals for potential risk. These reports are available in our documentation.

3. We are actively monitoring the protocol at all times for any potential attack vectors. In the event of a threat, the emergency multisig can step in and quickly pause protocol operations. The emergency multisig cannot access or block withdrawal of user funds under any circumstances.

The Future of Liquid Staking Tokens

The launch of Prisma Finance on Ethereum mainnet marks a significant milestone in our mission to extend the utility and use of liquid staking tokens throughout the DeFi ecosystem. We aim to serve as a critical infrastructure, providing secure and efficient access to liquidity for all LSTs.

We look forward to the journey and hope you will be a part of it with us! 🌈

Join the Prisma Community

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

• Follow @PrismaFi on Twitter

To better understand the relationship between MEV and liquid staking we’ve decided to dive a bit deeper on how MEV can make liquid staking protocols more efficient.

Introduction to MEV

Maximal extractable value (MEV) refers to the phenomenon wherein operators find profitable opportunities across the blockchain by previewing pending transactions in the mempool. The mempool could be seen as a waiting area for yet-to-be-confirmed transactions. MEV operators would execute various strategies to extract value from users by reordering, inserting, and censoring transactions within blocks.
Additionally, they profit from more opportunistic MEV such as arbitrage and liquidations.
MEV rewards are split between various agents participating within the MEV ecosystem, these agents can generally be divided into these three categories: Searchers, builders, and validators.

Searchers: as their name would suggest, searchers are there to look for extractable value opportunities through different methods. So most of the arbitrage and liquidations that happen on-chain are performed by searchers. Searchers bundle transactions together and give them to builders, these bundles do not go through the mempool like normal transactions but go directly to the block builder. 

Builders: Searchers group transactions together and the builders put these transactions into blocks for proposers. These blocks may not only contain the transaction of the searcher but can additionally contain transactions from the mempool. The builders are selecting the best opportunities found by searchers. 

Validators: Sell blockspace to the searchers and builders and in return are rewarded with parts of the profits. The validator receives rewards for issuing new blocks and performing their consensus role to validate blocks.

MEV can also complement liquid staking protocols when their node operators run a MEV middleware.

MEV Boost

MEV-Boost is an open source middleware developed by the Flashbots team. It can be run by validators to access a competitive block-building market. MEV-Boost was developed to address the issue of centralized control in block creation responsibilities. Prior to the development of MEV-Boost and the Ethereum Merge, miners held centralized control over the selection, building, and proposing of blocks. This centralized control led to misaligned interests and an unfair marketplace for network participants. MEV-Boost aims to create a more transparent and secure MEV marketplace, by dividing block creation responsibilities among specialized agents. Builders are responsible for creating blocks that include transaction order flow and a fee designated for the validator proposing the block. Separating the roles of proposers and block builders fosters increased competition, decentralization, and censorship-resistance..

Validators that run MEV-Boost and connect to MEV Relays, have the ability to access the marketplace of builders and propose blocks that optimize the capture of MEV value. Instead of proposing blocks they constructed themselves, validators can source blocks from this marketplace, selecting the one that best captures MEV value in a highly efficient manner. The utilization of MEV middleware has gained significant adoption in the Ethereum ecosystem. At the time of writing, an impressive 95% of blocks proposed within the past two weeks were attributed to validators using MEV-Boost.

MEV serves as a valuable complement to the Ethereum staking architecture, as it enables the division of block creation responsibilities. This division, in turn, fosters greater decentralization and efficiency within the network.

The MEV rewards that validators can receive vary considerably and are influenced by several factors, such as the  level of competition for blockspace in the market, the volume and frequency of transactions, and the effectiveness of the MEV middleware utilized.

It is worth noting that even minor improvements in transaction sequencing can result in significant additional rewards. This is particularly noteworthy considering Ethereum's pivotal role as the foundation for the decentralized finance (DeFi) ecosystem, where users conduct daily transactions involving billions of dollars. An example that illustrates this is the 689 ETH MEV reward that a Lido validator received on May 9th 2023: link

MEV & Liquid Staking

In addition to node operators being able to complement their revenue with MEV captured value, they have the opportunity to re-stake the execution layer rewards they collect, thereby increasing the number of validators they manage. This, in turn, enhances the likelihood of one of their validators being chosen to propose new blocks and earn rewards accordingly. Such a strategy acts as a lever to boost staking efficiency among validators.

MEV extractors play a crucial role in improving the efficiency of the Ethereum network by capturing rewards from market inefficiencies and arbitrage opportunities. As a result, they contribute to reducing the overall cost associated with transaction execution. This efficiency enhancement has the potential to drive greater demand for the network's services, leading to increased workload for validators.

Liquid staking can also act as an effective mechanism in fostering a more democratic and decentralized MEV ecosystem. By allowing anyone to stake their tokens and actively participate in the consensus process, liquid staking enables the wider distribution of MEV rewards, consequently reducing the concentration of network rewards among a few large validators.

Looking Forward

We are excited to further complement the ecosystem by increasing a wider distribution of MEV rewards along with subsequent demand and utility for staked ETH variants. Stay tuned for how we’ll be working with RPC in the ecosystem to provide even more efficiency in the MEV ecosystem.

1. Lido:
   Lido allows users to stake their ETH and receive stETH tokens in return. These stETH tokens represent users staked ETH and can be freely traded and utilized across various DeFi applications. Users receive rewards for staking their ETH, we’ve covered staking rewards more in depth in a previous blog post, these rewards are pooled together and redistributed to stETH holders. In return for providing these services, a fee is charged by Lido on the staking rewards to cover operational costs. At the moment, Lido's fee for liquid staking rewards is 10% annually, with a 50:50 split between operators and the treasury.
   Current fee: 10%                         Current yield: 4.00%

2. Frax:
   Frax is an algorithmic stablecoin protocol that has expanded into liquid staking, providing its users access to liquid staked ethereum with its Frax Ether offering. Frax implements a two token model where users stake their ETH and receive frxETH tokens in return, representing the users stake in the protocol. sfrxETH is designed to accrue the staking yield of the Frax ETH validators. When validators generate staking yield, a corresponding quantity of frxETH is minted and sent to the sfrxETH contract. This means that after rewards are synced, sfrxETH can be redeemed for more frxETH than it took to mint.Frax charges a 10% fee on staking rewards, with a specific repartition of 8% to Frax Protocol treasury in the form of frxETH and 2% goes into a fund to cover potential slashing events/unforeseen penalties. This structure might changed once frxETH can support independently run validators in v2.
   Current fee: 10%                         Current yield: 4.94%

3. Coinbase:
   Coinbase, a prominent cryptocurrency exchange, has introduced liquid staking services to its users. Coinbase allows ETH holders to stake their assets directly on the platform to get cbETH and receive staking rewards. Users will be able to collect their accrued rewards upon redemption. A variable conversation rate takes  into consideration staking/unstaking activity, prizes, fines, and fees, the rate updating daily.Coinbase takes a commission based on the rewards you receive from your staked ETH, which is 25% at the moment.
   Current fee: 25%                         Current yield: 3.30%

4. Binance:
   Binance, the largest cryptocurrency exchanges, has recently launched its own liquid staking service providing its large user base access to staking on Ethereum through Binance Staking.ETH rewards are distributed daily based on a user's BETH holdings. The ETH redemption amount is based on a user's BETH holdings at time of redemption instead of their initial staked assets.To offset its operating cost, Binance's liquid staking services applies a 5% fee on staking rewards.
   Current fee: 5%                         Current yield: 4.45%

5. Rocket Pool:
   Rocket Pool is a decentralized staking platform that aims to provide a secure and decentralized infrastructure for Ethereum staking. It allows users to deposit their ETH into the Rocket Pool network, which then distributes the ETH to multiple validators. rETH represents both how much ETH is deposited, and when it is deposited. The ratio includes rewards that Rocket Pool node operators earn from: the Beacon Chain itself, priority fees from block proposals and MEV rewards from block proposals. As these rewards will constantly accumulate, the respective value of rETH will continue to increase relative to ETH.With the introduction of the new minipool, there is now a 14% commission on rewards.
   Current fee: 14%                         Current yield: 3.22%

6. Swell:
   Swell is a liquid staking solution that enables Ethereum holders to stake their ETH and receive swETH tokens. These tokens represent a user's stake in the Ethereum blockchain including any rewards and penalties accrued from the consensus layer, and MEV and ‘tips’ from the execution layer. Rewards from the Consensus layer stay locked and will continue to accumulate, and rewards from the Execution layer will be restaked to efficiently compound rewards back into the staking. The value accrual will be accurately represented as the value of swETH will contine to increase relative to ETH.During the temporary launch promotional campaign Swell has a 0% commission fee policy.
   Current fee: 0%                         Current yield: 5.00%

7. Ankr:
   Ankr, a blockchain infrastructure provider, is among the more established issuers of liquid staked ETH. ankrETH is issued as a “reward-bearing token”, meaning that the value of the asset remains constant from the time it is staked. Compared to other offerings, the value of ankrETH increases relative to ETH. During redemption the price of 1 ankrETH will increase over time as rewards accumulate. ankrETH rebases daily as rewards accumulate. Ankr's liquid staking serviceAnkr charges a 10% technical service fee for Liquid Staking, deducted from the staking rewards. Current fee: 10%                         Current yield: 3.84%

Liquid staking has opened new avenues for ETH holders to stake their assets while maintaining liquidity. These issuers are among the prominent platforms offering liquid staked ETH services, but not the only ones.Each platform has its fee structure, enabling users to make informed decisions based on their preferences. As fee structures may evolve over time, it's important to stay up-to-date on information regarding it.

In the PoS model, the network is secured by validators who have to stake ETH in order to validate the network.

The transition to PoS was done gradually with Ethereum first launching the Beacon Chain in December 2020. The Beacon Chain ran in parallel with the Ethereum mainnet and both chains were unified during the Merge, transforming the Ethereum mainnet into the Execution Layer (EL), and the Beacon chain into the Consensus layer (CL).

The PoW network ceased to exist after the Merge, transferring responsibilities of block proposing and consensus reaching from miners to validators.

The transition to PoS has lowered the barrier to secure the Ethereum network and partake as a Consensus participant. However, despite making it easier for people to partake in securing Ethereum, staking Ethereum can still be capital-intensive as stakers are required to stake 32 ETH. This has led to the emergence of a compelling and lasting concept known as liquid staking. Liquid staking allows users to stake ETH while maintaining accessibility and liquidity. In return for providing these services, liquid staking providers charge a commission for their services.

In this blog post, we aim to shed light on the reward structure in both the CL and EL layers of Ethereum. We will dive into the details to gain a better understanding of the underlying yield associated with staking ETH.

     A. Consensus Layer Rewards:

The CL is responsible for achieving agreement among network participants. On Ethereum, this means that at least 66% of participants must agree on the global state of the network. Rewards are distributed to validators for their participation in the Ethereum Proof-of-Stake consensus protocol, which involves proposing and validating blocks, voting for their view of the chain's head, and participating in sync committees.

Let's break down the types of rewards in the consensus layer:

1. Block Proposal Reward:Validators receive rewards for proposing a block. In each slot, a single validator is randomly selected as the "block proposer." Rewards can potentially include whistleblowing rewards.

2. Attestation Reward:Validators are rewarded for submitting attestations. The reward depends on the base reward and the inclusion delay. Attestations represent a validator's vote on the chain's state. Every epoch (approximately 6.4 minutes), a validator proposes an attestation that includes the most recent justified block and the first block of the current epoch. By compiling this information from participating validators, the network reaches consensus on the Ethereum blockchain's state.

3. Sync Committee Reward:A sync committee consists of 512 validators. Every 27 hours (256 epochs), the Ethereum network randomly assigns 512 validators to a sync committee. Validators in the committee receive significantly higher rewards for serving light clients.

An important characteristic of consensus layer rewards is that they decrease as more validators join and increase when validators exit. These rewards remain constant regardless of network traffic volume.

     B. Execution Layer Rewards:

Ethereum's EL handles transaction processing, smart contract execution, and the maintenance of the blockchain's state. Execution layer rewards are generated through transaction processing and smart contract execution. These rewards consist of transaction priority fees paid by users, who initiate transactions or interact with smart contracts, as well as Maximal Extractable Value (MEV) searchers.

Let's break down the types of execution layer rewards:

1. Transaction Priority Tips:These rewards are payments made by users to incentivize validators to process their transactions faster and include them in a block.

2. MEV (Maximal Extractable Value):Validators have the option to build blocks locally or utilize software known as MEV-Boost to sell block space to block builders. Block builders optimize rewards by including, excluding, and changing the order of transactions in a block.

Unlike consensus layer rewards, execution layer rewards fluctuate based on network traffic volume. During periods of high network activity, more priority tips are included, and additional MEV opportunities arise.

In the coming days we will have a look at how the fees are structured across the different LSTs issuer and the yield associated with each protocol.

Raising from amazing backers like Curve and Convex involved answering questions about how Prisma would set itself apart. Many newly joined community members are equally wondering how Prisma is different from the others: The answers are here

Multi-Collaterals

Rather than focusing solely on stETH and its market-leading position, Prisma will onboard five different LSTs from Rocket Pool, Coinbase, Binance and FRAX as well as Lido.

The goal is to level the playing field for LST providers and offer an excellent value proposition to those liquid staked tokens that may not be supported as well as others across the DeFi ecosystem.

Prisma has one shared stability pool but still allows its users to have independent borrows from different collaterals.In addition to our own due diligence, an independent team of researchers will assess each launch collateral, their level of decentralization, their fee structure and will suggest a cap for each of them. https://twitter.com/PrismaRisk

veTokenomics

PRISMA governance system allows its users to lock their token to receive vePRISMA voting weight which varies based on lock length (from a week up to a year). Users can operate multiple locks with different lengths in parallel as well as freeze a lock to prevent it from decaying linearly. This means vePRISMA holders can choose to freeze their lock and avoid having to continuously relock it. Governance will have control over the protocol fees.

LST Wars

One of DeFi’s most beloved mechanisms is Curve gauges that allow stablecoin issuers to incentivize liquidity to a certain pool, which is often referred to as the Curve wars. vePrisma holders will be allowed to go even further by having the ability to incentivize certain actions across the protocol. This means LST providers can incentivize minting mkUSD with their own LST. The voting, however, isn’t limited to this sole action.

Voters can direct emissions:

• towards minting with a certain collateral

• to keep an active borrow with a certain collateral

• to any LP tokens staker whether that may be on an mkUSD/3CRV Curve pool or any LP token from any other DEX that may be relevant to Prisma.

Governance

vePRISMA holders will have the ability to adjust parameters for each collateral from launch to best manage risk and incentives issued by the protocol. Governance can adjust mint and redemption fees, raise or lower interest rates on outstanding loans, maximum caps and add or remove collaterals.

Boost

vePRISMA holders will also benefit from a boost when completing actions that earn PRISMA (like minting mkUSD, maintaining an open loan, or providing liquidity on one of the incentivized pairs).Based on their voting weight (relative to the total voting weight), users will be granted a boost of up to 100% (or 2x) on their PRISMA rewards. It will be possible to delegate the boost to allow Convex and Convex-like protocols to aggregate it and sell it at a fee that they can set themselves.

As most LST issuers will have an interest in directing emissions towards actions such as minting with their own LST, a bribe layer will complement Prisma governance and its participants.

Security

DeFi security is paramount for us. To tackle this subject in the most thorough manner, Prisma will undergo three audits from top firms in the coming weeks.

There is so much more to reveal about Prisma so keep an eye out on our socials below and for the upcoming release of our docs.

Twitter: https://twitter.com/PrismaFi Discord: https://discord.gg/prismafinance Website: https://www.prismafinance.com

Market landscape

Following the successful implementation of the Merge, and despite rumors of massive unstaking surrounding the Shanghai update, there has been a significant increase in ETH being staked on the Beaconchain. Current data indicates that more than 22 million ETH has been staked, which represents approximately 19% of the total ETH supply.

According to data from DefiLlama, various liquid staking providers have close to 9.5 million ETH staked, with Lido holding the largest market share at ~74%. However, over the past year, Coinbase, Rocket Pool, and Frax have been steadily increasing their market share, especially in recent months. As a result, the liquid staking provider landscape is rapidly evolving into one of the most exciting new categories within DeFi, with fierce competition to attract the majority of stakers. New protocols like Prisma are an opportunity to further level the playing field for all LST providers.

Let’s dive into the Liquid Staking major actors by market share:

Lido DAO (wstETH)

Lido stands out as the largest liquid staking provider, capturing ~74% of the market for liquid staked ETH, with close to 7.1 million ETH staked.  Lido's prominent market position can be attributed to its first movers advantage, which allowed it to establish a strong position and gain a competitive edge in providing robust liquidity for wstETH.

Coinbase (cbETH)

In a relatively short period of time, Coinbase has emerged as a strong competitor, surpassing Rocket Pool to secure the position of the second-largest liquid staking provider. Coinbase’s centralized staking service issues cbETH, an ETH liquid staking token that represents its fair value in relation to ETH. This sets it apart from other ETH liquid staking tokens that are designed to track the price of ETH in a 1:1 ratio.

Rocket Pool (rETH)

Rocket Pool ranks third among liquid staking providers, with over 738k ETH staked and a market share of close to 8%.What distinguishes Rocket Pool is its emphasis on decentralization, boasting a network of over 2700 node operators. The entire process of creating, withdrawing, and delegating rewards is managed by Rocket Pool's smart contracts on the Execution layer.

Frax Finance (sfrxETH)

By utilizing the Frax Finance ecosystem to optimize yield, Frax has successfully secured the fourth position among liquid staking providers. Frax's distinct approach has enabled holders to enjoy a considerable yield, as reported by DefiLlama, reaching nearly 10% at some point. This attractive yield has contributed to the swift growth of Frax's liquid staking token, solidifying its position in the market.

Binance (WBETH)

WBETH, a recently introduced liquid staking token by Binance in late April, offers users the opportunity to participate in DeFi initiatives outside of Binance while retaining their eligibility for ETH staking benefits. As a new participant in the liquid staking market, Binance has undertaken strategic measures to secure liquidity for WBETH, including engaging with bribes on Curve. These efforts highlight Binance's active involvement in establishing a solid position for WBETH within the competitive landscape of liquid staking.

What’s next?

For liquid staking tokens to effectively be integrated into DeFi, it is crucial to establish substantial and lasting liquidity for these assets. The success and functionality of these tokens rely heavily on the presence of appropriate incentive structures. Liquid staking issuers recognize the significance of liquidity as they compete to attract the relatively limited number of ETH stakers and liquidity providers. The accumulation of deep liquidity becomes a key factor in driving the adoption and seamless integration of liquid staking tokens within the broader DeFi ecosystem.

Existing DeFi protocol primitives lack the necessary incentive structures required for liquid staking tokens to establish lasting deep liquidity. Many of the existing DeFi protocols often overlook the integration of emerging LSTs such as rETH and sfrxETH.

While DeFi protocols are beginning to integrate emerging LSTs into lending markets, their design is not optimally adapted to maximize capital efficiency for these LSTs.

Prisma addresses these challenges by leveraging the best of what DeFi has to offer, creating a specific flywheel incentive structure for LSTs and their providers. The Prisma protocol provides users access to the Prisma’s native overcollateralized stablecoin, acmkUSD, using any of the listed liquid staking tokens (LSTs) as collateral. This approach allows holders of liquid staked ETH tokens an access to unparalleled capital efficiency without undermining and exposing the protocol to weaker centralized assets. As Ethereum staking rewards accrue, loans secured by LSTs gradually see their collateral value increase, making it safer from liquidation.

The integration of a Curve pool further enhances the benefits for users. By staking their stablecoin, users can earn additional rewards in the form of CRV and CVX, which the protocol strongly incentivizes through participation in Curve wars. This particular structure encourages users to actively engage in the Curve ecosystem and maximize their returns.

Prisma's codebase has been designed to be completely immutable with flexible governance parameters to be managed by vePRISMA holders. Over the next weeks, Prisma will review its launch collaterals, assessing their level of decentralization and risks to find the most suitable parameters for each of them. If you wish to learn more about Prisma, please refer to our launch announcement or keep in touch with us using the links below:

Twitter: https://twitter.com/PrismaFi Discord: https://discord.gg/prismafinance Website: https://www.prismafinance.com/

Prisma is a new DeFi primitive focused on unlocking the full potential of Ethereum liquid staking tokens (LSTs).

Prisma allows users to mint a stablecoin (mkUSD) fully collateralized by liquid staking tokens. The stablecoin will be incentivized on Curve and Convex Finance to create a capital-efficient flywheel where users can receive trading fees, CRV, CVX, and PRISMA on top of their Ethereum staking rewards.

Prisma’s codebase is completely immutable, based on Liquity, in order to create a robust protocol and truly decentralized stablecoin with favorable and flexible collateral parameters to make it attractive for those wanting to get the best out of their LSTs without tail risks from other stablecoins. The Prisma DAO will be in charge of parameters, emissions, and protocol fees.

Backed by the best

Prisma is backed by Curve Finance founder, Convex Finance founders, FRAX Finance, Conic Finance, Tetranode, Llama Airforce, Michael B. of LlamaNodes, Coingecko Founders, Amplice and Ivan from GearBox, OKX Ventures, DeFiDad, MrBlock, Impossible Finance, 0xMaki, GBV, Agnostic Fund, Swell Network Founder, Magnus from Dialectic Fund, Carlos from BITKRAFT, Adam Cochran, Eden Director of research at The Block, Kinnif from Fisher8, Tascha from Stella, Ankr Founders, Sam from NodeGuardians, MCEG, Eric Chen and Mirza from Injective, and many more.

Current state

The market for Ethereum Liquid Staking Tokens (LSTs), which has grown significantly in recent years, is currently at $18 billion, or around 10% of the entire market value of Ethereum, and recently became the biggest DeFi category by TVL according to DeFiLlama making it the biggest addressable market in DeFi.

Utility

Prisma allows users to mint Prisma’s native overcollateralized stablecoin (mkUSD) against any of the below-listed LSTs, providing holders of liquid-staking ETH tokens with unrivaled capital efficiency. With the help of Ethereum staking rewards, loans secured by LSTs eventually pay themselves back.

With the addition of a Curve pool, users can then stake their stablecoins and receive further rewards in the form of CRV and CVX which the protocol will heavily incentivize by participating in the Curve wars.

Liquity & Prisma

Prisma’s codebase is based on Liquity. We have done our best to respect their ethos which we strongly believe embodies the best of DeFi: immutability, robustness, and decentralization. We also wanted Prisma to be unique and stand on its own so we’ve added flexibility at the governance level over collaterals, parameters, and much more. Using veTokenomics, Prisma holders will have more control over the protocol but more on that below.

PRISMA: Token & Governance

PRISMA uses the veToken model which controls several aspects of the protocol:

• The stability pool

• Pool parameters for new collaterals

• Protocol fees

• Emissions (and which collateral should receive them)

Governance participants, among other things, have the ability to incentivize the minting of mkUSD or change mint and borrow fees on their collateral of choice with the goal of incentivizing LST protocols to participate in Prisma’s governance. vePRISMA holders can also choose to incentivize any LP tokens with PRISMA emissions.

Assets

Prisma will launch supporting the following assets:

• wstETH (Lido)

• cbETH (Coinbase)

• rETH (Rocket Pool)

• sfrxETH (Frax Ether)

• WBETH (Binance)

Wen

In the coming weeks, we will reveal more about Prisma, its launch, its tokenomics, and its novel mechanisms while the protocol goes through multiple audits from the best auditors there are.

Links

Twitter: https://twitter.com/PrismaFi

App: https://www.prismafinance.com

Community: https://discord.gg/prismafinance