#17 @prism_protocol
#17 @prism_protocol
Splitting tokens into yield & principal, enabling fix yield & yield trading
#16 @prism_protocol
Splitting tokens into yield & principal, enabling fix yield & yield trading
In this thread
TLDR of what is Prism
History of Prism
How does it work
What does it enable, what strategies you can do
Prism #airdrop, #cosmos
Summary
TLDR
Prism is a Cosmo L1 blockchain that enables users to break their yield bearing assets and break it into Principal token (PT) & Yield Token (YT).
PT & YT can be redeemed at mature date & trade freely. Allowing speculation on yield price.
History of Prism
Prism was initially built on the @terra_money network with its PT & YT around Luna which hit 800m TVL at peak with 70m liquidity it’s native AMM.
Well then luna got rekt. The team didn’t stop there though, they decided to be a Layer 1 with #cosmos SDK + #IBC enabling the PT & YT design into the @cosmos ecosystem & plan to extend to NON IBC outpost.
How does it work
Yield bearing asset in liquid staking derivative ( CT )
Prism Hub will break them in Pricipal Token (PT) + Yield Token (YT)
Users can trade PT or YT or wait till maturity date & redeem.
Example
Assume Atom price is $10, Atom’s variable yield is 20%
Market price
ATOM PT = 0.85
ATOM YT = 0.15
Meaning
You can buy PT at 0.85 atom and hold for 1 year u can get 1 ATOM,
You can pay 0.15 atom for the right to receive the staking yield of 1 ATOM next year
Do note these numbers are number of atom not USD price, so
if atom price gone down more than 15% value in USD u still lose
If atom price go up, you will earn 0.15 * USD value of atom at the time
What does it enable
Higher capital efficiency.
Fix rate yield ( in number of tokens )
Yield trading
Interesting strategies u can look at
Bullish on token long term & if YT is in discount you can sell PT & buy YT.
Buy “discounted” PT & wait till it matures
Speculated on yield that are variable e.g. if X token’s yield is based on network usage or trading fee, events or growing activity can effect the true output of “varible yield”
AIRDROP
Delegated ur atoms to prism validator for airdrop
TLDR - redelegate your stake atoms to prism validator for airdrop
Summary
Respect to the PRISM team for sticking around & rebuilding. I like teams/ builders that just put in the work and constantly pivot, this shows resistance.
PT & YT is not the most innovative design, the key is what asset they enable & the liquidity of PT & YT tokens.
Off the top of my head I think they are the first yield trading protocol in the cosmo ecosystem, do correct me if i am wrong
it will be interesting the team’s ability in executing the idea.
P.S they are hinting OSMO pair, might be interesting.
Happy Chinese New Years Guys!
Thank you for reading!