Some questions I've been pondering this week...
1. What happens if no one is interested in the $PRISM token, but instead only want to refract $LUNA?
2. And what if everyone is interested in $PRISM but no one is refracting their $LUNA?
Let's figure it out together...
๐งต
1. What happens if no one is interested in the $PRISM token, but instead only want to refract $LUNA?
2. And what if everyone is interested in $PRISM but no one is refracting their $LUNA?
Let's figure it out together...
๐งต
Scenario 1: Bear Raise, Bull Utility
Let's say PRISM Forge has a small turn out and we only raise 10m $UST in exchange for 70m $PRISM tokens.
This means the market values $PRISM at $0.14 each.
Let's say PRISM Forge has a small turn out and we only raise 10m $UST in exchange for 70m $PRISM tokens.
This means the market values $PRISM at $0.14 each.
However, people are more interested in speculating on pLUNA and yLUNA such that 10% or 31m of all staked $LUNA is refracted...
That 31m $LUNA would equate to roughly $30m in revenue buy backs per year or an annual revenue for xPRISM stakers of over 400% APR!
That 31m $LUNA would equate to roughly $30m in revenue buy backs per year or an annual revenue for xPRISM stakers of over 400% APR!
This is purely from protocol revenues and not emissions!
Smart money at this point would buy up $PRISM off the open market and stake it for IL free xPRISM rewards.
Or you know... they could have bought it during PRISM Forge in the first place, just sayin...
Smart money at this point would buy up $PRISM off the open market and stake it for IL free xPRISM rewards.
Or you know... they could have bought it during PRISM Forge in the first place, just sayin...
Scenario 2: Bull Raise, Bear Utility
Ok, so what if the opposite happens?
In this scenario, PRISM Forge successfully raises 210m $UST in exchange for the same 70m $PRISM tokens.
This means the market values $PRISM at $3 each.
Ok, so what if the opposite happens?
In this scenario, PRISM Forge successfully raises 210m $UST in exchange for the same 70m $PRISM tokens.
This means the market values $PRISM at $3 each.
But for some reason, people aren't that interested in refracting their $LUNA and only 1% or 3m of all staked $LUNA is refracted.
A high price for $PRISM and low value capture would mean xPRISM stakers would receive less than 2% APR in protocol revenue.
A high price for $PRISM and low value capture would mean xPRISM stakers would receive less than 2% APR in protocol revenue.
In this scenario, smart money would look to the PRISM Farm for "lossless" $PRISM tokens.
They would buy yLUNA off of PRISM Swap or refract new $LUNA.
If yLUNA is priced at $25 and 90% of all yLUNA is in the PRISM Farm, the yLUNA Farm would be over 550% APR.
Formula attached:
They would buy yLUNA off of PRISM Swap or refract new $LUNA.
If yLUNA is priced at $25 and 90% of all yLUNA is in the PRISM Farm, the yLUNA Farm would be over 550% APR.
Formula attached:
After 30 days, the $PRISM tokens would vest and they could sell or stake them for xPRISM.
In this scenario, smart money has subsequently increased the amount of $LUNA staked and increased protocol revenues for the rest of the xPRISM stakers.
In this scenario, smart money has subsequently increased the amount of $LUNA staked and increased protocol revenues for the rest of the xPRISM stakers.
After diving into these potential scenarios, I've come to really appreciate the push and pull mechanism of how $PRISM captures value in relation to the amount of TVL the protocol controls.
To simplify things, in this example we only looked at the $LUNA vaults.
Let's not forget the protocol will also captures revenue through:
- $bETH, $bSOL, and other bAssets
- LP vaults
- AMM fees
- Cross dex limit orders
- Fixed maturity vaults
Let's not forget the protocol will also captures revenue through:
- $bETH, $bSOL, and other bAssets
- LP vaults
- AMM fees
- Cross dex limit orders
- Fixed maturity vaults
The first part of PRISM Forge starts in less than 12 hours!
There's no rush as the initial price deposit period lasts for 4 days!
More information here:
prism-protocol.medium.com
There's no rush as the initial price deposit period lasts for 4 days!
More information here:
prism-protocol.medium.com
Of course, the scenarios above are all speculative based on my own assumptions and shouldn't be taken as financial advice.
If you're curious and want to play around with your own assumptions, check out my valuation tool here:
share.streamlit.io
If you're curious and want to play around with your own assumptions, check out my valuation tool here:
share.streamlit.io
For all other resources about launch and educational resources, check out the notion below:
prismprotocol.notion.site
prismprotocol.notion.site
Loading suggestions...