Prisma Finance: Mint mkUSD, Earn LP Yields, and Farm A PRISMA Airdrop

Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned. DeFi Dad has disclosed he was an angel in the seed round for Prisma Finance.

This summer, LSTfi took off as a new sector of DeFi focused on optimizing for ETH LSTs (liquid staking tokens). As liquid staking is still in a nascent stage, given less than 10% of all circulating ETH is in LST protocols and only 21% of the total ETH supply is staked (worth $40.5B in ETH), there’s a huge opportunity to create DeFi that serves this large pool of capital. Previously, we’ve covered emerging CDP-borrowing protocols for ETH LSTs like Gravita, Raft, and Lybra Finance. Lybra has maintained the largest deposits of liquid staked ETH with just under $130M so with Raft at $35M and Gravita just over $30M, this space looks ripe for competition!

On September 1st, a new CDP-style LSTfi protocol launched called Prisma Finance. Prisma aims to support a non-custodial and decentralized Ethereum LST-backed stablecoin. In just 8 hours, the Prisma debt cap of $20M filled as users deposited LST collateral to mint their new flagship mkUSD. This Friday September 15 at 12 pm UTC, Prisma will raise the mkUSD debt cap another 10M which is why this tutorial should be timely to prepare! 

mkUSD is fully collateralized by 4 popular ETH LSTs: wstETH, rETH, cbETH, and sfrxETH, with a minimum collateral ratio (MCR) of 120%. The mkUSD stablecoin is already incentivized on Curve and Convex