Mind Your Ps and Ys

PRISM is a defi 2.0 protocol that provides ultimate composability of tokens in Terra ecosystem. With its revolutionary protocol PRISM provides an opportunity for Defi users to maximize their principle and or yield without the risk of liquidations. The PRISM token enables swapping between any two tokens supported by Prism protocol in a maximum of two steps. Where as xPrism tokens are used for governance of PRIMS Protocol.

PRISM is a revolutionary derivatives protocol that introduces new asset classes in DeFi, allowing users to manage the risks associated with volatile prices and unstable yields in a simple and capital-efficient manner. PRISM achieves this by refracting digital assets into two distinct parts: a yield component and a principal component.

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Compared to traditional defi methods used to earn yield through staking and liquidity provider fees through AMM, PRIMS offers a more robust set of tools for investors to participate in DeFI in whole new way. Here are few benefits of

  1. One could borrow from PRISM without liquidation risk by monetizing yields from future similar to Alchemix
  2. Easily adjust exposure between yield bearing assets and principle bearing assets
  3. Claim all airdrops
  4. Switch between variable rate returns to fixed rate returns at any time with a single click

Now in this post, lets explore the two PRISM tokens – pLUNA and yLUNA. The pLUNA is a Principal Token aimed at maximizing the returns based on the growth of LUNA price. Where as yLUNA is a Yield Token which represents the right to all future yield, including all the juicy airdrops linked with protocols like Anchor, Mirror, Pylon protocols of Terra Blockchain.

The following chart shows the current market cap of pLUNA and yLUNA tokens in PRISM protocol. As you see the new DeFi users are interested in future yields and that resulted in total value locked in yLUNA token being 3 times of pLUNA tokens. As I write this post, around 390 millions USD is locked in yLUNA tokens where as 103 millions is locked in pLUNA tokens.

Now lets us check the daily price chart of pLUNA and yLUNA tokens. The following chart shows the token prices on PRISM starting March 1st 2022. The yLUNA token price is closely tracking LUNA token price where as pLUNA token is hovering around 20 USD with less volatility.

This chart shows the price movement of pLUNA and yLUNA to give a better picture of volatility associated with the token price.

The following chart shows the top 10 pLUNA depositors in PRISM starting 2022 January 1st

The following chart shows the top 10 depositors of yLUNA

Observations

The PRISM protocol opens up a new age Defi for Terra blockchain users with a great deal of benefits. With new derivatives, risk takers can explore new opportunities and earn a lot more yield efficiently for their assets. The yLUNA market cap is 3x of pLUNA market cap. While the protocol is in its infancy, we have to wait and see how it grows as it turns in to a toddler. We believe the protocol not only flourish itself but also scale Terra blockchain to new heights.

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