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.
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.
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.
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.
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 uses the veToken model which controls several aspects of the protocol:
The stability pool
Pool parameters for new collaterals
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.
Prisma will launch supporting the following assets:
rETH (Rocket Pool)
sfrxETH (Frax Ether)
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.