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.
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