Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned. DeFi Dad has disclosed he is an early DAO contributor to Prisma Finance.
Previously, we covered the launch of a new non-custodial, decentralized Ethereum LST-backed stablecoin called Prisma Finance.
Prisma is a CDP protocol where users collateralize popular ETH LSTs including wstETH, rETH, cbETH, and sfrxETH, with a minimum collateral ratio (MCR) of 120% and mint mkUSD at a borrowing interest rate of 1% (soon 2%). The mkUSD stablecoin has made quite a splash with Prisma attracting over $350M as of this week with debt caps continually raised during the last month.
The major catalyst for this growth has been the recent launch of the PRISMA governance token on November 2nd, with a 300M supply that shot up to a fully diluted valuation of $5.6B when PRISMA peaked at $18.64/token on its first day of trading. Since then, the price has settled to a more modest $0.93/token and FDV of $283M.
PRISMA’s initial rise in price has left many DeFi investors wondering if this is a sign of the bull market returning to crypto.
The 62% of supply (186,000,000 PRISMA) are allocated towards “emissions” directed by the Prisma DAO and will incentivize certain actions within the Prisma Protocol including liquidity on liquidity pools.
As a CDP (collateralized debt position) protocol forking Liquity’s code with some design updates, Prisma Finance now boasts $365M in ETH LST collateral including:
- $213M in stETH
- $69M in rETH
- $15M in cbETH
- $64M in sfrxETH
Two days after the token launch on November 4th, Prisma announced the anticipated Prisma Retroactive Airdrop for all veCRV voters who helped whitelist Prisma on Curve as well as all Prisma Point holders who opened vaults or provided liquidity to mkUSD LPs prior to November 2nd. The purpose of the PRISMA Retroactive Airdrop is to catalyze “participation in Prisma’s on-chain governance and to enable the wider community to act as responsible stewards of the protocol’s development.”
The airdrop for veCRV voters went live yesterday on November 6th at 9 am UTC. The airdrop for Prisma Point holders is scheduled for November 9th at 9 am UTC.
In order to claim PRISMA, users can go to the Prisma website. However, an interesting new option has been revealed for PRISMA airdrop recipients thanks to Convex Finance. Similar to cvxCRV, Convex is launching cvxPRISMA to swallow up a large amount of the circulating supply of PRISMA in order to have voting rights and boost earning power for LPs participating in future Prisma related LPs.
For those claiming their PRISMA airdrop on the Prisma website, veCRV voters who earned PRISMA receive vePRISMA locked for 52 weeks vs the Prisma Point holders who receive vePRISMA locked for 26 weeks. Instead, with the Convex PRISMA airdrop claim for both veCRV and PRISMA Points holders, recipients can inherit these benefits with cvxPRISMA:
- cvxPRISMA is a transferable token
- You receive CVX rewards
- Better boost fees
- Better Prisma fees
For some PRISMA recipients, this may present a better option with the promise of instant liquidity in cvxPRISMA. It should be noted the “instant liquidity” hinges on Convex directing CVX/CRV emissions to LPs in the Curve…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
