Introduction

As we’re preparing to roll our public testnet in the coming days, we believe our users should understand what to expect

The rise of Web3 has introduced unprecedented levels of control, privacy, and ownership over digital assets and interactions. However, transitioning from Web2 to Web3 has brought forth challenges in accessibility, user experience, and cost structures. Primis Protocol aims to overcome these challenges with a unique approach to liquid staking, creating a self-sustaining and user-centric economy seamlessly integrated into virtual worlds and gaming servers.

Hyper Liquid Staking: The Core of Primis Protocol

Primis Protocol introduces the concept of Hyper Liquid Staking, leveraging a sophisticated bonding mechanism to create yield tokens with compressed, "metamorphic" yield from liquid staking. This innovative approach maximizes returns and provides a more stable and predictable income for users.

Key Components of Hyper Liquid Staking

• Liquid Staking Tokens (LSTs): Users deposit LSTs, such as stETH, into Primis Protocol. These tokens represent staked assets that are still liquid, allowing users to earn staking rewards while retaining the ability to move or trade their assets.

• Bond Yield and Principal Tokens: Upon depositing LSTs, users receive two types of tokens: a fixed-rate bond yield token (PRM) and a principal token (prmETH). The bond yield token represents the interest earned, while the principal token represents the initial deposit.

• Meta-LST Yield Token (YT): This token further encapsulates the yield, providing an additional layer of earning potential through a process called "yield compression."

Yield Splitting and Compression

Yield Splitting and Compression are core mechanisms in Primis Protocol designed to optimize yield generation and stability. These mechanisms involve a multi-step process to separate and manage yields more effectively, ensuring users receive the best possible returns.

Yield Stripping

The initial step in yield optimization is yield stripping. When users deposit LSTs, such as stETH, into Primis Protocol, the yield generated by these assets is stripped into two primary components: yield and principal. This separation allows for more precise management and optimization of returns. The principal remains accessible and liquid, while the yield is managed separately to maximize its potential.

Two-Step Yield Splitting

Primis Protocol employs a unique two-step yield splitting process. Unlike traditional yield tokens that represent the entire yield, Primis Protocol further splits the yield through bond yield and staking rebase yield. Here's how it works:

• Bond Yield: Users receive a fixed-rate bond yield token (PRM) representing the interest earned from their staked assets.

• Staking Rebase Yield: Additionally, users receive a floating rate yield derived from the rebasing process. This two-step process compresses the floating rate yield on top of the fixed rate from the bonds, creating a more stable and predictable return for users.

Yield Compression

Yield compression is a crucial aspect of Primis Protocol, enhancing the efficiency and effectiveness of yield generation. It involves consolidating yields into a concentrated form, represented by the Meta-LST Yield Token (YT). This token encapsulates multiple layers of yield, providing an additional layer of earning potential.

Vault Strategies

Primis Protocol deploys the deposited LSTs into various vault strategies to maximize yield. These strategies include:

• High-Yield Platforms: Assets are restaked into high-yield platforms like InstaDapp Lite's stETH V2 Vault, enhancing the overall return.

• Diverse Yield Protocols: Assets are also invested in other high-yield protocols, ensuring a diversified and robust approach to yield generation.

Rebasing Yield

The additional yield, considered the floating rate, is then rebased to the staked PRM token (sPRM). This rebasing process distributes the floating yield across all staked PRM tokens, providing users with enhanced returns and ensuring a continuous flow of rewards.

The combination of yield stripping, two-step yield splitting, yield compression, and strategic vault deployment creates a dynamic and robust liquid staking ecosystem. This multi-faceted approach, known as Hyper Liquid Staking, ensures maximum returns for users while maintaining stability and predictability.

Protocol Owned Liquidity

Protocol Owned Liquidity (POL) is a foundational element of Primis Protocol, enhancing liquidity, stability, and self-sustainability. POL is generated through user deposits and built-in mechanisms, ensuring a continuous and sustainable flow of liquidity.

Self-Determined Bond Fee

Users can set a self-determined bond fee when creating bonds. This fee is subtracted from the bond's principal amount upon its maturity and contributes to the protocol's treasury. The self-determined bond fee provides over-backing to the yield token, creating Protocol Owned Liquidity. The fee structure is designed to incentivize users to contribute to the protocol's liquidity, enhancing the overall stability and sustainability of the platform.

Minting Protocol Liquidity

In addition to user-contributed liquidity, Primis Protocol mints its own liquidity through the creation of prmETH. This native token represents the principal deposited in bonds and is minted when users deposit ETH or LSTs. The minted prmETH is used to earn further fees, maintaining a self-sustaining liquidity structure.

The integration of self-determined bond fees and protocol-minted liquidity enhances the stability and reliability of the platform, making it a robust and resilient ecosystem for users.

Enhancing Stability and Reliability

This self-sustaining liquidity model is crucial for maintaining the protocol's financial health and supporting its various functions, including yield generation and staking rewards.

Protocol Treasury Management

The protocol's treasury plays a pivotal role in managing and deploying liquidity. The treasury accumulates assets from bond fees, trading fees, and other sources of income. These assets are strategically managed and invested to maximize returns and support the protocol's operations. The treasury's management ensures that the protocol remains financially stable and capable of providing consistent rewards to users.

Governance and Community Involvement

The management and deployment of Protocol Owned Liquidity are governed by the PrimisDAO, a decentralized autonomous organization. Community members participate in governance by locking their $PRIMIS tokens to gain voting power. This voting power is used to make decisions on protocol operations, strategic investments, and other key aspects of the protocol's development.

Through active community involvement and decentralized governance, Primis Protocol ensures that the management of liquidity and other resources aligns with the collective interests of its users. This approach promotes transparency, accountability, and inclusivity, reinforcing the protocol's commitment to a user-centric and community-driven ecosystem.

(Other utilities for $PRIMIS will be announced soon)

Conclusion

Primis Protocol is redefining virtual world economies through its innovative approach to Hyper Liquid Staking and Protocol Owned Liquidity. By leveraging sophisticated yield generation mechanisms and strategic integrations, Primis Protocol creates a self-sustaining and user-centric economy within virtual worlds and gaming servers. Join us in this ambitious journey to build a robust and engaging virtual world, powered by the innovative solutions of Primis Protocol.